The Energy Daily, 14 May 2003 - ExxonMobil Corp. is now alone among its "supermajor" peers in the private oil industry in refusing to take meaningful action against the risks posed by global warming, according to a study commissioned by dissident ExxonMobil shareholders and a coalition of groups aimed at improving corporate environmental responsibility.

The report, done by a London economic consulting company called Claros Consulting, comes as ExxonMobil shareholders ready three shareholder resolutions aimed at pressuring the company to disclose why it hasn't followed the lead of other giant private oil companies in taking steps to address the risks of climate change.

Activist shareholders plan to offer all three of the resolutions at the Irving, Texas-based company's May 28 annual meeting.

According to the Claros Consulting report, three of the four "supermajor" oil and natural gas companies - Shell, BP and ChevronTexaco - are exploring and using a wide array of energy and risk-management options to deal with such factors as emerging national and international carbon constraints, greenhouse gas emissions trading and new energy mandates.

These strategies, the report said, include incorporating carbon pricing into future planning scenarios and decision-making, setting emissions-reduction targets, developing emission-trading experience and investing in renewable energy.

"Rather than wasting time and resources on attacking the science of climate change, these three are moving aggressively to deal with the reality of related market changes," the report said.

In contrast, the report noted, ExxonMobil "is sitting idly on the sidelines," thereby jeopardizing its own future and the wealth of its shareholders.

The study also found that the risk posed by climate change has grown significantly since ExxonMobil's 2002 annual meeting.

"The regulatory risks associated with climate change have become reality," the report said. "Carbon caps and fines in Europe begin in 2005. The Kyoto Protocol has 106 signatories, and Russia's statement of intent to ratify means the treaty is likely to come into force soon. Renewable energy production mandates are now in force in 15 countries and 13 [U.S.] states, and more appear to be on the way."

In addition, climate change-related litigation is now a real threat, the report said. The New York attorney general's office announced last year that it is studying the issue of climate change and may sue polluters along the lines of the successful tobacco litigation by states in the 1990s.

A spokesman for ExxonMobil denied the company had put its head in the sand on climate change.

"The allegation that ExxonMobil is not taking a constructive approach to the issue of climate change is completely unfounded and full of supposition and rhetoric," ExxonMobil spokesman Tom Cirigliano said. "We would agree with Claros that climate change is an important issue, but contrary to their report, it's certainly one that we are taking very seriously."

Among other measures, Cirigliano said ExxonMobil has cut energy use at its refineries and chemical plants by 37 percent over the last 25 years-saving 200 million metric tons of carbon-equivalent in that period.

The Claros report agreed that ExxonMobil had taken some actions over the last year on climate change. It is funding a research project at Stanford University, investing in fuel cells and energy efficiency and supports mandatory emissions reporting.

Still, the report said: "While these are laudable efforts, they do not address the need to evaluate all the potential financial risks from climate change or describe to shareholders how the company will mitigate those risks. They also do not explain the company's strategy for renewable energy."

At last year's meeting, shareholders representing more than $55 billion in ExxonMobil stock backed a resolution calling for disclosure of the company's plans for renewable energy. The resolution was supported by 20.3 percent of the shares voting.

This year, the shareholders will offer the renewable energy resolution and two new ones. The first of these calls for ExxonMobil to prepare a report on the risks posed by climate change and how the company plans to mitigate those risks.

The second new resolution calls for the ExxonMobil board to separate the roles of chairman and chief executive officer "to create greater balance" on that body.

Claros and Campaign ExxonMobil, a group of ExxonMobil shareholders pressing the company to address climate change, also recommend that shareholders oppose a resolution calling for the re-appointment of Philip Lippincott to the chair of ExxonMobil's public issues committee, saying Lippincott has failed to manage the climate change issue effectively.

"It doesn't matter if you 'believe in climate change' if policies are emerging around the world that affect your industry," said Mindy Lubber, executive director of CERES, a coalition of 85 investor and public interest groups working with companies to increase corporate environmental responsibility worldwide. CERES also sponsored the report.

Author Chris Holly Publication Date 14.05.2003 Document Type News articles Issue/Topic Corporate Social Responsibility Energy & Climate Risk Company BP p.l.c. ChevronTexaco Corporation Royal Dutch/Shell Group of Companies Source The Energy Daily