ExxonMobil Gets Challenge from Shareholders to Reduce Carbon. Will Other Companies Get Pressure?
Some of ExxonMobil’s shareholders are taking aim at the oil giant. A group of activists is asking it to report its reserves as both equivalent barrels of oils and as an energy-neutral metric. What’s that mean? Will shareholders from various corporations take similar action as it relates to carbon footprints?
Okay, As You Sow says that oil reserves are primary assets that should be measured against all the other energy assets they own, including renewables. That would put greater value on such things as wind, solar and geothermal, it says.
“We have to get beyond a barrel-based standard,” said Danielle Fugere, president of the investor-activists group. “Replacing a barrel of oil with another barrel of oil doesn’t make business sense in a carbon-constrained economy that is moving away from fossil fuels.”
She goes on to say that oil companies will benefit from diversification — that doing so provides a hedge against fluctuating oil prices and that it provides them protection against the major oil producing countries like Saudi Arabia. Big Oil should become Big Energy, the group says.
The Energy Transitions Commission agrees, saying that the primary objective here is to keep global temperatures from rising more than 2 degrees Celsius by mid Century.
The aim is to provide reliable, clean and inexpensive power to all consumers and especially those in the developing world, which needs to electrify and to expand. Economics demand it. But public incentives encourage it. With modern technologies and good policies, entrepreneurs will smell opportunity.
“We would never get large scale infrastructure without serious public regulations and public finance,” says Jeremy Oppenheim, project director for the New Climate Economy Project, in an interview. “Private capital then comes in alongside that. What history tells us is that it will always be a combination of the two.”
Long criticized for its carbon emissions, Big Oil is diversiyfing its holdings because of sustained low oil prices. Oil giant Total S.A. is doing as much. So are the international utilities: Enel and Iberdrola S.A. All are scaling up and investing in clean energy.
And just recently, ExxonMobil Corp. said it would invest in FuelCell Energy Inc. to test a proprietary carbon capture technology. It says that the fuel cell could become affordable while capturing up to 90 percent of a power plant’s carbon emissions.
Meantime, some companies are getting out in front of their shareholders. Calvert Investments discusses Google, AT&T and Coca-Cola. Google, for instance, publicly lists its renewable energy holdings as well as its carbon footprint that it wants to reduce to zero. Meanwhile, AT&T also has a goal of increasing its green energy and decreasing its greenhouse gas emissions by 20 percent by 2020. Coca-Cola has said it was able to cut all of its emissions by 5 percent.
The goodwill can spread to all companies, says As You Sow, even companies: “Even oil companies can change—they must change. This shareholder resolution will help Exxon and Chevron decouple their financial performance from how much oil they can produce. It’s time for oil companies to think outside the barrel,” Fugere said.
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