We don’t cover climate change news all that much here on RenewableEnergyWorld.com. The reason for that is that we view climate change as just one bullet point in a list of reasons why renewable energy make sense: energy independence, grid stability through decentralized generation and resource depletion are also on that list.
But yesterday we received an announcement that we felt RenewableEnergyWorld.com readers would be very interested to hear. See, in response to shareholder pressure, ExxonMobil, the largest oil and gas company in the U.S., has agreed to release a Carbon Asset Risk report by the end of the month. The Carbon Asset Risk report would purportedly describe how ExxonMobil assesses the risk of stranded assets from climate change.
It’s a look toward the future because today, with no carbon tax or real meaningful carbon regulations, ExxonMobil can continue the work that is doing exploiting oil reserves in deep, deep waters and through tar sands at great expense because it knows it will be able to sell that oil at a very high price. However, if stricter carbon regulations were in place, some of ExxonMobil’s activities might not be economical, forcing the company to leave some of that oil and gas in the ground. Shareholders deserve to understand that risk.
ExxonMobil's agreement to release the Carbon Asset Risk report is in response to pressure from Arjuna Capital, the sustainable wealth management platform of Baldwin Brothers Inc., and As You Sow, a non-profit promoting environmental corporate responsibility. As You Sow had proposed a shareholder resolution last year that requested information “on the Company’s strategy to address the risk of stranded assets presented by global climate change, including analysis of long and short term financial and operational risks to the company.”
According to a release by Arjuna and As You Sow:
World governments agree that if catastrophic warming over 2°C is to be avoided, no more than one-third of current proven carbon reserves can be burned. These reserves, currently on the balance sheets of the 200 largest coal, oil, and gas companies are valued at $20 trillion. Yet, a recent Unburnable Carbon report calculates that in 2012 alone, the 200 largest publicly traded fossil fuel companies collectively spent an estimated $674 billion on finding and developing new reserves – reserves that cannot be utilized without breaking the world’s carbon budget.
The shareholder resolution, which was supported by almost 20 percent of voting shares representing over $1 billion in assets, according to As You Sow, will be withdrawn as a result of ExxonMobil’s announcement.
In early 2014, RenewableEnergyWorld.com reported that financial optimism was a key theme for the year and ExxonMobil’s announcement is another clear indication that large corporations are taking notice of climate change and preparing for a low-carbon future. If ExxonMobil is ready to acknowledge that its oil and gas profits will be much less in the future, perhaps it will start to look more seriously at investing in renewable energy today.
“The largest companies in the world are taking a more active, aggressive role than ever in wanting to profit from clean energy,” said Dallas Kachan in an interview earlier this year. Maybe sometime not too far away, we will all be taking our EVs to the ExxonMobil solar-powered electric vehicle charging stations.
Wouldn’t that be a shift?
Lead image: Storm Clouds Over Oil Rig via Shutterstock
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