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Notice Of Exempt
Solicitation: (VOLUNTARY SUBMISSION)
NAME OF
REGISTRANT: Exxon Mobil
Corporation
NAME OF PERSON RELYING ON
EXEMPTION: Majority Action
ADDRESS OF PERSON RELYING ON
EXEMPTION: PO Box 4831, Silver Spring, MD 20914
Written
materials are submitted pursuant to Rule 14a-6(g)(1) promulgated
under the Securities Exchange Act of 1934. Submission is not
required of this filer under the terms of the Rule but is made
voluntarily.
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Exxon Mobil Corp [NYSE:
XOM]: Due to the
company’s FAILURE to:
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● |
Set a robust net
zero by 2050 target that includes its scope 3 greenhouse gas (GHG)
emissions |
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● |
Align its capital
allocation with limiting warming to 1.5°C, and |
|
● |
Commit to conduct
all of its lobbying in line with the goals of the Paris Agreement,
and its general opposition to U.S. federal and state climate
policy; |
Vote AGAINST:
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● |
Darren W.
Woods, CEO and Chairman (item 1.12), |
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● |
Joseph L.
Hooley, Lead Independent Director (item 1.07), and |
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● |
Susan K.
Avery, Chair of the Environment, Safety and Public Policy
Committee (item 1.02) |
The physical and financial risks posed by
climate change to long-term investors are systemic, portfolio-wide,
unhedgeable and undiversifiable. Therefore, the actions
of companies that fail to align to limiting warming to 1.5°C pose
risks to the financial system as a whole, and to investors’ entire
portfolios. See www.proxyvoting.majorityaction.us
for more information regarding Majority Action’s Proxy Voting for a
1.5°C World initiative and the transformation required in key
industries.
Exxon Mobil Corp (Exxon) is the largest oil
producer in the U.S.1 and among the top producers in the
world.2 Exxon is one of the 166 target
companies named by Climate Action 100+ as the largest global
emitters and “key to driving the global net zero emissions
transition.”
Petroleum and fossil gas products, including
those used in transportation, buildings, industrial processes, and
electricity production, account for nearly 80% of carbon emissions
from the U.S. energy system.3 In 2021, the
International Energy Agency (IEA) released its Net Zero Emissions
by 2050 Scenario (NZE), which sets out a pathway to reduce
emissions from the global energy system aligned with limiting
warming to 1.5°C. Under the NZE, fossil fuel use falls dramatically
in the next decade, and remaining fossil fuel demand can be met
through existing supplies and infrastructure. Approving new oil and
gas fields is incompatible with this pathway.
Failure to set ambitious
decarbonization targets in line with 1.5°C
pathways, and to
align companies’ business plans and policy influence to those
targets, is a failure of strategy and corporate governance, for
which long-term investors should hold directors
accountable. At companies
where the production, processing, sale, and/or consumption of
fossil fuels is central to their core business, GHG emissions
reductions have profound strategic implications. The board chair,
lead independent director where the position exists, and other
board members with climate-related oversight responsibilities
should be held accountable for oversight failures related to
decarbonization.
In 2023, we have updated our metrics to more
closely align with the Climate Action 100+ Net Zero Benchmark
Indicators for the oil and gas sector, while still
focusing on the three core pillars of target setting, capital
allocation, and policy influence. This allows for a more
standardized assessment across companies that is broadly accepted
by investors.
Target setting
|
Climate
Action 100+ Net Zero Benchmark Indicators |
|
|
Disclosure
Indicator 1.1 |
The
company has set an ambition to achieve net zero GHG emissions by
2050 or sooner. |
- |
|
|
Disclosure
Indicator 1.1A |
The
company has made a qualitative net zero GHG emissions ambition
statement that explicitly includes at least 95% of its scope 1 and
2 emissions. |
✓ |
|
|
Disclosure
Indicator 1.1B |
The
company’s net zero GHG emissions ambition covers the most relevant
scope 3 GHG emissions categories for the company’s sector, where
applicable. |
X |
|
Disclosure
Indicator 3.1 |
The
company has set a target for reducing its GHG emissions by between
2026 and 2035 on a clearly defined scope of emissions. |
X |
|
Disclosure
Indicator 3.2 |
The
medium-term (2026 to 2035) GHG reduction target covers at least 95%
of scope 1 & 2 emissions and the most relevant scope 3
emissions (where applicable). |
X |
|
|
Disclosure
Indicator 3.2A |
The
company has specified that this target covers at least 95% of its
total scope 1 and 2 emissions. |
X |
|
|
Disclosure
Indicator 3.2B |
If the
company has set a scope 3 GHG emissions target, it covers the most
relevant scope 3 emissions categories for the company’s sector (for
applicable sectors), and the company has published the methodology
used to establish any scope 3 target. |
X |
|
Disclosure
Indicator 3.3 |
The
target (or, in the absence of a target, the company’s latest
disclosed GHG emissions intensity) is aligned with the goal of
limiting global warming to 1.5°C. |
X |
Since setting its
net zero by 2050 ambition in 2022, Exxon has not expanded its goal
to include scope 3 emissions;4 this means the company
has excluded the emissions generated by the use of the products it
sells. Exxon reported at least 690 million tonnes of scope 3
emissions from petroleum product sales in 2021,5
compared with 113 million
tonnes of scope 1
and 2 (“operational”) net GHG emissions on an equity
basis,6
so scope 3 emissions accounted for approximately 86% of the
company’s total.7
Exxon has set
insufficient medium- and short-term emissions reductions targets:
By 2030, the company expects its plans to lower corporate-wide GHG
emissions intensity by 20-30 percent and absolute emissions by 20
percent and to reduce upstream GHG emissions intensity by 40-50
percent and absolute emissions by 30 percent, all from a 2016
baseline.8 Because
Exxon's 'expectations' are not considered commitments as defined by
the Climate Action 100+ Net-Zero Company Indicators, the company
does not satisfy the indicators related to medium- and short-term
targets. The medium-term target covers 95 percent of scope 1
and 2 emissions, but not the most relevant scope 3 emissions, and
the company’s short-term target (up to 2025)9 does not
specify if it covers 95 percent of only scope 1 and 2 emissions, or
most relevant scope 3 emissions as well.10 None of the
interim targets are aligned to the goal of limiting warming to
1.5°C.11
Capital allocation
|
Climate
Action 100+ Net Zero Benchmark Indicators |
|
Disclosure
Indicator 6.1 |
The
company is working to decarbonise its capital
expenditures. |
X |
|
Disclosure
Indicator 6.1A |
The
company explicitly commits to align its capital expenditure plans
with its long-term GHG reduction target OR to phase out planned
expenditure in unabated carbon intensive assets or
products. |
X |
|
Disclosure Indicator 6.1B
|
The
company explicitly commits to align its capital expenditure plans
with the Paris Agreement’s objective of limiting global warming to
1.5° C AND to phase out investment in unabated carbon intensive
assets or products. |
X |
|
Capital
Allocation Alignment Assessment (Carbon Tracker) 1: Company’s
Recent Actions |
In the
most recent full year (2021), were all the company’s upstream oil
and gas CAPEX projects consistent with the IEA’s Beyond 2°C
Scenario (B2DS)? |
X |
|
Capital
Allocation Alignment Assessment (Carbon Tracker) 2: Capex
Analysis |
What
percentage of the company's potential future (2022-2030)
unsanctioned oil and gas CAPEX is inconsistent with the IEA's
B2DS? |
73% |
|
Capital
Allocation Alignment Assessment (Carbon Tracker) 4: Net Zero
Analysis |
What is
the company’s oil and gas production level in the 2030s (against a
2022 baseline) assuming no new oil and gas projects are sanctioned
as stated by the IEA's NZE? |
-44% |
According to the
Climate Action 100+ Net Zero Company Benchmark, Exxon has met none
of the disclosure indicators for capital allocation.12
In order to fully meet the criteria of those indicators, the
company would need to commit to aligning future capital
expenditures with its long-term GHG reduction target(s) and the
Paris Agreement’s objective of limiting global warming to 1.5°C,
and disclose the methodology it uses for such
alignment.13
In a memo
released by the U.S. House Committee on Oversight and
Accountability, the committee states, “Exxon’s plans to invest in
lower carbon initiatives over the next six years represent only 10%
to 12.5% of its intended
capital
investments—meaning that the vast majority of the company’s planned
investments will be for the continued use of fossil
fuels.”14
According to
Carbon Tracker data provided through the Climate Action 100+ Net
Zero Benchmark, Exxon’s oil and gas production must fall by 44%
from its 2022 level to be aligned with the IEA NZE.15
Despite this, Carbon Tracker finds that 73% of Exxon’s future
potential capex between 2022 and 2030 is outside of the IEA’s B2DS
(limiting warming to 1.75°C, net zero by 2060), let alone the
NZE.16 Exxon ranked first among U.S oil and gas
producers and sixth among global producers for resources under
development in 2022 (with about 40 percent of that in
unconventional sources)17, and ranked eighth amongst
global oil and gas producers for exploration capital expenditure
between 2020 to 2022.18
Policy influence
|
Climate
Action 100+ Net Zero Benchmark Indicators |
|
Climate
Policy Engagement Alignment (InfluenceMap) 1: Organization
Score |
The
level of company support for (or opposition to) Paris
Agreement-aligned climate policy.19 |
47% |
|
Climate
Policy Engagement Alignment (InfluenceMap) 2: Relationship
Score |
The
level of a company’s industry associations’ support for (or
opposition to) Paris Agreement-aligned climate policy. |
44% |
According to
InfluenceMap, the company received a near-failing D grade for its
obstructive policy engagement.20
As of October
2022, the company had not met the requirements of the Climate
Action 100+ Net Zero Company Benchmark for climate policy
engagement: the company does not have a Paris Agreement- aligned
climate lobbying position and has neither Paris Agreement-aligned
lobbying expectations for its trade associations nor a commitment
to ensure that the trade associations to which it belongs lobby in
line with the goals of the Paris Agreement.21
In December 2022,
the U.S. House Committee on Oversight and Accountability concluded
its investigation on the role of the fossil fuel industry in
promoting decades of climate disinformation and preventing
meaningful action on climate change.22 The investigation
focused on “ExxonMobil’s role in contributing to climate change and
ExxonMobil’s role in supporting disinformation or misleading the
public to prevent action to address this global
crisis.”23
In addition to
highlighting how limited the company’s climate investment plans
are24, the investigation concluded the following:
|
● |
Fossil fuel
entities, including Exxon, have misled the public about their
practices by refusing to comply with the committee’s investigation
and targeting journalists who expose this noncompliance. Exxon, for
example, “inappropriately redacted responsive documents from its
Board of Directors”.25 |
|
● |
In
2015, Exxon falsely accused a journalism student and her instructor
of misrepresenting the company and ethical violations. The
student’s work used “historic documents and more recent interviews
and statements from current and former Exxon employees, [to show]
that Exxon’s work to prepare its facilities for climate change
belied its public statements downplaying or denying climate
science”.26 |
Shareholder Proposals Related to Climate
In addition to
voting against Directors Woods, Hooley and Avery, shareholders may
wish to support several climate-related shareholder proposals:
|
● |
Sisters of
St.Francis Charitable Trust filed a proposal (Item 8) requesting
Exxon issue a report analyzing the reliability of its methane
emission disclosures and summarize the outcome of efforts to
directly measure methane emissions, using recognized frameworks
such as OGMP; and whether those outcomes suggest a need to alter
the company’s actions to achieve its climate
targets.27 |
|
● |
Follow This filed
a proposal (Item 9) asking Exxon to set a medium-term reduction
target GHG emissions of the use of its energy products (scope 3)
consistent with the goal of the Paris Agreement: to limit global
warming to well below 2°C above pre-industrial levels and to pursue
efforts to limit the temperature increase to
1.5°C.28 |
|
● |
Mercy Investment
Services filed a proposal (item 10) seeking a report evaluating the
economic, human, and environmental impacts of a worst-case oil
spill from Exxon’s operations offshore of Guyana. The proposal
asked that the report clarify the extent of the company’s cleanup
response commitments given the potential for severe impact on
Caribbean economies.29 |
|
● |
Andrew Behar filed
a proposal (Item 11) requesting that Exxon disclose a recalculated
emissions baseline that excludes the aggregated GHG emissions from
material asset divestitures occurring since 2016, the year Exxon
uses to baseline its emissions.30 |
|
● |
United
Steelworkers filed a proposal (Item 16) asking Exxon to create a
report regarding the social impact on workers and communities from
closure or energy transition of the company’s facilities, and
alternatives that can be developed to help mitigate the social
impact of such closures or energy
transitions.31 |
Conclusion: Exxon has failed to set a robust net zero emissions
by 2050 target. The company also must align its future capital
allocation and policy influence to limit warming to 1.5°C.
Therefore, we recommend that shareholders vote AGAINST Darren W.
Woods, (CEO and Chairman), Joseph L. Hooley (Lead Independent
Director), Susan K. Avery, (Chair of the Environment, Safety and
Public Policy Committee), all facing re-election at the company’s
annual meeting on May 31, 2023.
1
Exxon, “Oil and gas supply” (website),
https://corporate.exxonmobil.com/what-we-do/energy-supply, accessed
May 5, 2023
2 Urgewald,
“Global Oil & Gas Exit List (GOGEL),” (analysis using GOGEL
data), https://gogel.org/ Note: Expenditure is a 3-year average
from 2020-2022.
3 U.S. Energy
Information Administration, “Total Energy,” (data browser),
https://www.eia.gov/totalenergy/data/browser/index.php?tbl=T11.01#/?f=A&start=1973&end=2019&charted=0-1-13,
accessed May 5, 2023
4 Climate Action
100+, “Exxon Mobil Corp.,” Company Assessment,
https://www.climateaction100.org/company/exxon-mobil-corporation,
accessed May 5, 2023
5 Exxon, 2023
Advancing Climate Solutions Progress Report, December 15, 2022,
https://corporate.exxonmobil.com/-/media/global/files/advancing-climate-solutions-progress-report/2023/2023-advancing-climate-solutions-progress-report.pdf,
p. 92
6 Exxon, 2023
Advancing Climate Solutions Progress Report, p. 90
7 Exxon, 2023
Advancing Climate Solutions Progress Report, p. 90
Note: This proportion was calculated by
dividing scope 3 emissions by the sum of the net GHG scope 1 and 2
emissions (equity basis) and scope 3 estimates from
petroleum sales.
8 Exxon, 2023
Advancing Climate Solutions Progress Report, p. 6, 12
9 Exxon, 2023
Advancing Climate Solutions Progress Report, p.88
10 Climate Action
100+, “Exxon Mobil Corp.”
11 Climate Action
100+, “Exxon Mobil Corp.”
12 Climate Action
100+, “Exxon Mobil Corp.”
13 Climate Action
100+, “Exxon Mobil Corp.”
14 Chairwoman
Carolyn B. Maloney and Chairman Ro Khanna, “Re: Investigation of
Fossil Fuel Industry Disinformation,” memo to the Committee on
Oversight and Accountability (formerly the “Committee on Oversight
and Reform”) December 9, 2022,
https://oversightdemocrats.house.gov/sites/democrats.oversight.house.gov/files/2022-12-09.COR_Supplemental_Memo-Fossil_Fuel_Industry_Disinformation.pdf,
p. 4
15 Climate Action
100+, Climate Action 100+ Net Zero Company Benchmark, Carbon
Tracker data, October 2022,
https://www.climateaction100.org/wp-content/uploads/2022/12/Downloadable-Excel_CA100-Benchmark_Dec-2022_CAAA-scores-v1.1.xlsx
16 Climate Action
100+, Climate Action 100+ Net Zero Company Benchmark, Carbon
Tracker data, October 2022,
https://www.climateaction100.org/wp-content/uploads/2022/12/Downloadable-Excel_CA100-Benchmark_Dec-2022_CAAA-scores-v1.1.xlsx
17 Urgewald,
“Global Oil & Gas Exit List (GOGEL)” Note: The exact figure is
39.9%, based on analysis using GOGEL. Expenditure is a 3-year
average from 2020-2022.
18 Urgewald,
“Global Oil & Gas Exit List (GOGEL)” Note: Expenditure is a
3-year average from 2020-2022.
19 InfluenceMap,
“About Our Scores,” LobbyMap,
https://lobbymap.org/page/About-our-Scores, accessed May 5, 2023
Note: According to InfluenceMap’s methodology “Organisation Score”
and “Relationship Score” (expressed as a percentage from 0 to 100)
is a measure of how supportive or obstructive the company’s or its
industry associations’ engagement is with climate policy aligned
with the Paris Agreement, with 0% being fully opposed and 100%
being fully supportive.
20 InfluenceMap,
“ExxonMobil,” LobbyMap,
https://lobbymap.org/company/Exxon-Mobil/projectlink/Exxon-Mobil-In-Climate-Change,
accessed May 4, 2023
21 Climate Action
100+, “Exxon Mobil Corp.”
22 U.S. House
Committee on Oversight and Accountability (formerly the “Committee
on Oversight and Reform), “Oversight Committee Releases New
Documents Showing Big Oil’s Greenwashing Campaign and Failure to
Reduce Emissions,” (press release), December 9, 2022,
https://oversightdemocrats.house.gov/news/press-releases/oversight-committee-releases-new-documents-showing-big-oil-s-greenwashing
23 U.S. House
Committee on Oversight and Accountability (formerly the “Committee
on Oversight and Reform), Letter to Mr. Darren Woods, September 16,
2021,
https://oversightdemocrats.house.gov/sites/democrats.oversight.house.gov/files/2021-09-16.CBM%20Khanna%20to%20Woods-ExxonMobil%20re%20Disinformation%20FINAL%20PDF%20v2.pdf
24 Chairwoman
Carolyn B. Maloney and Chairman Ro Khanna, “Re: Investigation of
Fossil Fuel Industry Disinformation,” memo to the Committee on
Oversight and Accountability, p. 4
25 Chairwoman
Carolyn B. Maloney and Chairman Ro Khanna, “Re: Investigation of
Fossil Fuel Industry Disinformation,” memo to the Committee on
Oversight and Accountability, p. 3
26 Chairwoman
Carolyn B. Maloney and Chairman Ro Khanna, “Re: Investigation of
Fossil Fuel Industry Disinformation,” memo to the Committee on
Oversight and Accountability, p. 24
27 Exxon Mobil
Corp., 2023 Proxy Statement, April 13, 2023,
https://ir.exxonmobil.com/static-files/602abfaf-40c8-4ffe-9fe9-84b208a06e01,
p. 82
28 Exxon Mobil
Corp., 2023 Proxy Statement, p. 87
29 Exxon Mobil
Corp., 2023 Proxy Statement, p. 87
30 Exxon Mobil
Corp., 2023 Proxy Statement, p. 89
31 Exxon Mobil
Corp., 2023 Proxy Statement, p. 100
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