On May 17, 2023, ExxonMobil submitted an SEC filing disclosing information on shareholder proposals in its 2023 Proxy Statement. The company encouraged shareholders to vote against several proposals that would require any additional direct methane measurement.
In the filing, ExxonMobil emphasized its commitment to monitoring and addressing fugitive methane emissions (emissions caused by leaks rather than those which are vented or captured) by utilizing technologies such as satellites, drones, fixed cameras, and sensors. The company stated that they plan to expand their continuous monitoring program and deploy detection technologies in multiple countries over the coming years. While acknowledging that there are currently no standard protocols for direct measurement of methane emissions, ExxonMobil stated that their current disclosures align with industry peers.
The company stated its goal of achieving zero environmental incidents and highlighted its comprehensive disclosures regarding operations in Guyana; opposing the proposal for an additional report on worst-case spill and response plans, stating that it would not provide new, decision-useful information or incremental value for investors.
The corporation reiterated that divestment decisions are aimed at maximizing value and improving competitiveness rather than managing emissions, arguing that the requested disclosures would not be meaningful as it could facilitate reaching the company’s GHG emission reduction plans more easily.
Regarding asset retirement obligations (AROs), ExxonMobil noted that proxy advisor Glass Lewis’ conclusion that additional reporting, as proposed, is not required by U.S. GAAP or current industry practice, going on to state that their Advancing Climate Solutions progress report already addressed the potential impact of the IEA NZE scenario on AROs.
The company disagreed with Glass Lewis’ assertion that AROs represent a material financial risk and suggests that GAAP does not incorporate risks as remote as the IEA NZE path.
In a 2021 report, The International Energy Agency released a roadmap for policy makers and energy companies to achieve net-zero emissions by 2050. In the report, they highlighted the urgency to drastically reduce the rate of global temperature increases to 1.5 °C by the middle of the century.
ExxonMobil made clear to shareholders that they should vote against the additional reporting measures at the upcoming Annual Meeting of Shareholders on May 31., claiming that “It is highly unlikely that society would accept the degradation in global standard of living required to permanently achieve a scenario like the IEA NZE [Net Zero Emissions by 2050]”