Oil and Gas Giant Exxon Agrees to Its First Carbon Risk Disclosure
Shareholders of the nation's largest oil and gas company are beginning to have concerns about the long-term environmental impact of the corporation's operations.
As a result, Exxon has agreed to disclose carbon emissions estimates and details on how it plans on operating under the risk of potential climate regulations. Social responsibility investment firm Arjuna Capital filed the request through a partnership with shareholder responsibility advocacy group As You Sow. It marks the first time Exxon has ever agreed to such disclosure or received such a request.
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"That the largest American oil and gas company is the first to come to the table on this issue says a lot about the direction that energy markets are taking," said Danielle Fugere, president of As You Sow, said in a statement. “Companies need to acknowledge that preparing for a low-carbon future is a necessity, not a choice. Companies that prepare early for a future with reduced carbon emissions will likely perform better than those who delay—and investors need transparency and disclosure about these company choices.”
Arjuna Capital believes Exxon's upcoming report could signal more corporate recognition of emission levels and the dangers of not adapting to a warming world.
“More and more unconventional ‘frontier’ assets are being booked on the balance sheet, such as deep-water and tar sands," said Natasha Lamb, director of equity research and shareholder engagement at Arjuna. "These reserves are not only the most carbon intensive, risky, and expensive to extract, but the most vulnerable to devaluation. As investors, we want to ensure our companies’ capital will yield strong returns, and we are not throwing good money after bad."
The proposal is part of a larger initiative coordinated by Ceres under which shareholders who represent $3 trillion in assets under management asked 45 companies for increased disclosure about their carbon risks. According to As You Sow, the entities have filed 10 Carbon Asset Risk proposals for 10 fossil-fuel companies this year.
According to the Wall Street Journal, Exxon has 25.2 billion barrels of oil and about the same amount of natural gas that it counts as reserves. About one-third are in the U.S. or Europe. That doesn't include 3.6 billion barrels of bitumen oil in Canada and South America.
An Exxon spokesman declined to speak with the publication about the upcoming report.
“Investors are the canary in the coal mine and will move their money to avoid material risk,” Lamb said. “Forward-thinking companies need to reassess how they allocate shareholder capital and act strategically to shift their business models.
"If Big Oil can’t redirect capital to low carbon energy alternatives, investors will."
In February, ExxonMobil CEO Rex Tillerson joined a lawsuit that cites the consequences of fracking operations as reason to block the construction of a 160-foot water tower next to his Texas home.
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A summary infographic showing hurricane season probability and numbers of named storms predicted from NOAA's 2020 Atlantic Hurricane Season Outlook. NOAA
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An unprecedented climate lawsuit brought by six Portuguese youths is to be fast-tracked at Europe's highest court, it was announced today.
The European Court of Human Rights said the case, which accuses 33 European nations of violating the applicants' right to life by disregarding the climate emergency, would be granted priority status due to the "importance and urgency of the issues raised."
‘Protect Our Future’<p>Cláudia Agostinho (21), Catarina Mota (20), Martim Agostinho (17), Sofia Oliveira (15), André Oliveira (12) and Mariana Agostinho (8) are <a href="https://www.desmogblog.com/2020/09/03/youth-climate-lawsuit-portugal-33-european-countries" target="_blank">bringing the case</a> with nonprofit law firm Global Legal Action Network (<span style="background-color: initial;">GLAN</span>), arguing that none of the countries have sufficiently ambitious targets to cut their emissions.</p><p>Portugal recently sweltered through its <a href="https://www.ipma.pt/pt/media/noticias/news.detail.jsp?f=/pt/media/noticias/textos/resumo-clima-julho-20.html" target="_blank">hottest July in 90 years</a> and has seen a rise in devastating heatwaves and wildfires over recent years due to rising temperatures. Four of the applicants live in Leiria, one of the regions worst-hit by the forest fires that killed more than 120 people in 2017. </p><p>Responding to the development, André Oliveira, 12, said: "It gives me lots of hope to know that the judges in the European Court of Human Rights recognise the urgency of our case." </p><p>"But what I'd like the most would be for European governments to immediately do what the scientists say is necessary to protect our future. Until they do this, we will keep on fighting with more determination than ever."</p>
‘Highly Significant'<p>The decision represents a "highly significant" step, <a href="https://www.glanlaw.org/about-us" target="_blank">GLAN</a> Director Dr. Gearóid Ó Cuinn said in a <a href="https://youth4climatejustice.org/" target="_blank">press release</a>.</p><p>"This is an appropriate response from the Court given the scale and imminence of the threat these young people face from the climate emergency," he added. </p><p>By suing the 33 countries all together, the youths aim to compel these national governments to act more aggressively on climate through a single court order, which would potentially be more effective than pursuing separate lawsuits or lobbying policymakers in each country.</p><p>If successful, the defendant countries would be legally bound not only to ramp up emissions cuts, but also to tackle overseas contributions to climate change including those of their multinational enterprises.</p>
‘Major Hurdle’<p>The <a href="https://youth4climatejustice.org/the-case/" target="_blank" rel="noopener noreferrer">countries targeted</a> include all of the European Union member states as well as Norway, Russia, Switzerland, Turkey, Ukraine and the United Kingdom, none of which are currently aligned with <a href="https://www.ecowatch.com/tag/paris-agreement">Paris agreement</a> target to limit global temperature rise to well below 2 degrees C (3.6 degrees F) and pursue a limit of 1.5 degrees C (2.7 degrees F).<a href="https://climateactiontracker.org/countries/" target="_blank" rel="noopener noreferrer"> </a></p><p><a href="https://climateactiontracker.org/countries/" target="_blank" rel="noopener noreferrer">Climate Action Tracker rates</a> most of Europe as "insufficient" in terms of its emissions reduction policies based on the Paris target, while Ukraine, Turkey and Russia are assessed as "critically insufficient" – meaning they are on track for a warming of 4 degrees C or higher.</p><p>The European Union has pledged to slash its emissions by <a href="https://ec.europa.eu/clima/policies/eu-climate-action/2030_ctp_en" target="_blank" rel="noopener noreferrer">at least 55 percent by 2030</a>. But the Portuguese youth plaintiffs are calling for cuts of at least 65 percent by 2030, a level that <a href="http://www.caneurope.org/energy/climate-energy-targets" target="_blank" rel="noopener noreferrer">European climate campaigners say</a> is necessary to meet the 1.5 degrees warming limit.</p><p> The 33 countries must each respond to the youths' complaint by the end of February, before lawyers representing the plaintiffs will respond to the points of defense. </p><p>"Nothing less than a 65 percent reduction by 2030 will be enough for the EU member states to comply with their obligations to the youth-applicants and indeed countless others," Gerry Liston, legal officer with GLAN, said in a press release.</p><p>"These brave young people have cleared a major hurdle in their pursuit of a judgment which compels European governments to accelerate their climate mitigation efforts."</p><p><span></span><em>Reposted with permission from <a href="https://www.desmogblog.com/2020/11/29/court-advances-landmark-youth-climate-lawsuit-against-33-european-nations" target="_blank">DeSmog</a>. </em></p>
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