(Bloomberg) — Exxon Mobil Corp. announced several new emissions targets and will start publishing pollution related to customer use of its products, days after activist investors criticized the oil giant for its environmental record.
The Irving, Texas-based company said Monday it will reduce the intensity of upstream emissions by as much as 20% by 2025 as well as cutting flaring and methane leaks. It added that the plan is consistent with the goals of the Paris Agreement.
Like Chevron Corp., Exxon’s climate goals are linked to reducing emissions intensity, meaning less pollution per barrel of oil produced, as opposed to absolute emissions. That leaves the company wiggle room to increase overall emissions in the future if crude output grows.
Exxon’s targets also appear weaker than many of those made by European oil companies, which have set reduction goals linked not only to their own operations but also to customers’ use of their petroleum products — so-called Scope 3 emissions.
All major European oil companies have set net-zero goals. BP Plc, Repsol SA and Eni SpA aim to deliver absolute reductions in the short term, whereas Royal Dutch Shell Plc, Total SE and Equinor ASA have set emissions intensity goals. Exxon’s goals are “specific, actionable plans that we can hold our organization accountable” for, Pete Trelenberg, Exxon’s director of greenhouse gas and climate change, said on a call with reporters. They will be updated over time, he said.
Activist investors Engine No. 1 and D.E. Shaw & Co. went public last week with their criticism of Exxon for not acting quickly enough on emissions as well as for years of poor shareholder returns. Engine No. 1, which is backed by the California State Teachers’ Retirement System in its campaign, called for “more significant investment in net-zero emissions energy sources,” in its letter to Exxon’s board.
Exxon said Monday its emissions pledge was made as part of its annual business planning process, a “result of of several months of detailed analysis and includes input from shareholders.” The new targets include:
- Upstream emissions intensity to drop 15% to 20% by 2025 compared with 2016 levels
- Methane intensity to decline by 40% to 50%
- Flaring intensity to fall by 35% to 45%
- Routine flaring will be eliminated by 2030
- Exxon also plans to provide Scope 3 emissions each year.
Exxon chose to target emissions intensity rather than absolute emissions because “we want to try and achieve first-quartile performance” relative to peers, Exxon’s Trelenberg said.
“To achieve the intensity targets we do need absolute emissions reductions as well, and those will be particularly focused in the methane and the flaring areas,” he said.
–With assistance from Akshat Rathi.
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