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By Jennifer Hiller
Dec 14 (Reuters) - Oil major Exxon Mobil Corp, under
increasing pressure from investors and climate change
campaigners, said on Monday it planned to reduce its greenhouse
gas emissions over the next five years.
Last Thursday, the Church Commissioners for England joined
growing investor campaigns to demand changes at Exxon and backed
calls for a board refresh and development of a strategy for the
largest U.S. oil company's transition to cleaner
fuels.
Several of Exxon's rivals this year have set longer-term
climate ambitions, including Royal Dutch Shell and BP
Plc, which aim to reduce greenhouse gas emissions to net
zero by 2050.
Exxon said it would start reporting so-called Scope 3
emissions in 2021, a large category of greenhouse gases emitted
from fuels and products it sells to customers, such as jet fuel
and gasoline.
By 2025, Exxon would reduce the intensity of its oilfield
greenhouse gas emissions by 15% to 20% from 2016 levels. It did
not set an overall emissions target, however, and reducing
intensity means that emissions still could rise if oil and gas
output grows.
The reduction would be supported by a 40%-50% decrease in
methane intensity and a 35%-45% decrease in flaring intensity
across Exxon's global operations, with routine natural gas
flaring eliminated within a decade, the company said.
Since the 2015 Paris climate accord set a goal of keeping
global warming to well below 2 degrees Celsius (3.6 F), pressure
from investors has increased and some of Exxon's peers have
agreed on more ambitious targets. Exxon said its goals were in
line with the Paris accord, which the United States exited under
President Donald Trump but that President-elect Joe Biden has
pledged to rejoin.
"We certainly recognize the direction of travel that Paris
sets out and the ambitions for society to get to net zero as
early as possible before the end of the century," Peter
Trelenberg, ExxonMobil director of greenhouse gas and climate
change, told a news conference on Monday.
"What we have tried to do is to develop specific actionable
plans that we can hold our organization accountable to drive
continuous improvement in emissions."
Further goals would be set as the 2025 targets are met,
Trelenberg said.
'NOTABLE TURN'
The targets are "encouraging news and doubtless a response
in part to expanding shareholder pressure," said Timothy Smith,
director of ESG (Environmental, Social and Governance)
shareowner engagement at Boston Trust Walden Co, which has
backed several shareholder proposals seeking improved disclosure
at Exxon and other companies.
"They had long opposed detailing Scope 3 emissions, so this
is a notable turn for them. And Exxon is known for its strength
in managing policy pledges it makes."
The new targets do not address product emissions, a "main
source of risk," said Andrew Logan, senior director of oil and
gas at sustainability nonprofit Ceres. "At a time when even U.S.
peers like Occidental and ConocoPhillips have
set net-zero targets for their operational emissions and
committed to addressing their product emissions, this effort
from Exxon falls short."
Exxon said it would meet goals it set in 2018 by the end of
this year to cut methane emissions by 15% and flaring by 25%
compared with 2016 levels.
Last week, Engine No. 1, a $250 million California-based
firm, called for expanded spending and pay cuts at Exxon, a
board shake-up and a shift to cleaner fuels. Its views were
supported at least in part by the California State Teachers'
Retirement System (CalSTRS) and hedge fund D.E. Shaw, which has
$50 billion under management.
In May, Exxon’s second-largest shareholder, BlackRock Inc,
voted in favor of an independent chairman and against the
re-election of two directors over Exxon's approach to climate
risks.
(Reporting by Jennifer Hiller in Houton and Arunima Kumar and
Shariq Khan in Bengaluru; Editing by David Gregorio and Peter
Cooney)