Page 16 - NorthAmOil Week 50 2020

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ExxonMobil unveils

new emissions

reduction targets

GLOBAL TEXAS-HEADQUARTERED ExxonMobil
has unveiled new targets for further reduc-
ing its greenhouse gas (GHG) emissions. The
super-major announced on December 14 that it
had set a deadline of 2025 for reducing the inten-
sity of upstream emissions by 15-20% compared
with 2016 levels, methane intensity by 40-50%
and flaring intensity by 35-45%. It also said that
it was on track to meet its 2020 methane intensity
and flaring reduction targets.
ExxonMobil said that the emission reduction
plans cover Scope 1 and Scope 2 emissions from
operated assets. Scope 1 covers direct emissions
from owned assets, while Scope 2 refers to indi-
rect emissions produced from the generation of
purchased electricity, steam, heating and cooling
consumed by a company.
The targets are projected to be consistent with
the goals of the Paris Agreement, ExxonMobil
said, adding that it was also planning to align
with the World Bank’s initiative to eliminate
routine flaring by 2030.
The super-major said it would start disclos-
ing its annual Scope 3 emissions – other indirect
emissions generated in a company’s value chain,
including those from products it sells to its cus-
tomers – on an annual basis from 2021. How-
ever, it warned that reporting of these emissions
“does not ultimately incentivise reductions by clean energy to justify a shift of capital expendi-
the actual emitters”. ture away from oil and gas.
The new targets were set after investors put “I think it’s difficult for them to see the returns
The new targets pressure on ExxonMobil to do more to reduce on the renewable side able to replace the histori-
its environmental impact. However, environ-
cal returns. Although frankly, the recent returns
were set after mental groups criticised the targets as not going have not been good,” LeBlanc said.
investors put far enough, especially when compared with the Once again, this is in contrast with what
decarbonisation goals of European super-majors European super-majors are doing, with firms
pressure on that have set net-zero GHG targets that include such as BP and Equinor stepping up their renew-
able investments. And it has led to concerns that
Scope 3 emissions.
“While reducing emissions intensity is ExxonMobil’s new emissions targets represent
ExxonMobil to do important, nothing in ExxonMobil’s stated the status quo more than any meaningful kind
more to reduce plans better positions it for long-term success in of change.
“A 15-20% reduction in greenhouse gas emis-
its environmental a world seeking to reduce total greenhouse gas sions intensity over nine years is not an ambi-
emissions,” stated Engine No 1, one of the share-
impact. holder groups engaged in an activist campaign tious target – essentially business as usual,” said a
to spur ExxonMobil into stepping up its environ-
Raymond James analyst, Pavel Molchanov.
mental efforts. Others, however, praised ExxonMobil’s move
Analysts agreed that the steps being taken by to start reporting Scope 3 emissions.
ExxonMobil fell short of what is being pursued “They had long opposed detailing Scope 3
by its European rivals. emissions, so this is a notable turn for them,”
“They haven’t made the sort of strategic leap Boston Trust Walden Co.’s director of environ-
that the European majors have,” an IHS Markit mental, social and governance (ESG) share-
vice-president, Raoul LeBlanc, was quoted by owner engagement, Timothy Smith, was quoted
the Financial Times as saying. He added that by Reuters as saying. “And Exxon is known for its
ExxonMobil does not see sufficient returns from strength in managing policy pledges it makes.”™

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