“For the first time, in my memory, we are actually seeing oil and gas majors talk about climate change as an existential threat. Today for example the minister for oil and gas for Saudi Arabia, Ali Al-Naimi, actually got up on stage in front of this entire group and said that climate change is more of an existential threat to the industry than any down cycle.”
This is what Shannon Cleveland, head of Ceres’ Carbon Asset Risk Initiative, told DeSmog from Houston where she is attending the premier annual oil industry gathering known as CERAweek.
“That is just a message — that even with things as bad as they were in 2015 — no one was talking about here at CERAweek last year,” Cleveland continued. “I think there is actually an opportunity for this industry to start shifting.”
Ceres is a group that, according to its website, works with investors “to weave sustainable strategies and practices into the fabric and decision-making of companies, investors and other key economic players.”
Another sign of the shift was Al-Naimi saying that, “Solar is definitely going to be the answer to energy’s future.” This hasn’t been the typical messaging at past CERAweek events. However, the question that is critical for addressing climate change is — how far in the future?
Because Al-Naimi also noted that Saudi Arabia is exploring fracking technology to produce oil and gas and promised that, “We will produce it one of these days.” It’s unlikely Al-Naimi will join the “keep it in the ground” movement any time soon.
ExxonMobil Still Fighting Climate Change Action
One of the requests investors are making of oil companies is the testing of portfolios against a scenario where global temperature rise is limited to no more than 2 degrees.
“I was just in a session where Total announced that they are now stress testing their portfolio against two degree scenarios consistent with the climate agreement in the Paris agreement,” Cleveland told DeSmog. “That is something I can’t imagine having happened last year.”
Of course, not everyone appreciates these efforts and ExxonMobil is denying this is necessary.
Which is why a group led by New York State Comptroller Thomas DiNapoli and the Church of England’s investment fund just asked the Securities and Exchange Commission to reject ExxonMobil’s plan to block a shareholder proposal for information on how the company will be impacted by climate policies that would necessarily involve curbing emissions from fossil fuels.
“ExxonMobil risks becoming an outlier among its peers who have publicly supported reining in climate change,” DiNapoli said. “As investors, we need to know how ExxonMobil’s bottom line will be impacted by the global effort to reduce emissions and what the company plans to do about it.”
DiNapoli isn’t just any investor as he controls the $178 billion state pension fund.
ExxonMobil isn’t overly popular with New York elected officials these days as New York Attorney General Eric Schneiderman is investigating ExxonMobil to determine “whether the country’s largest oil and gas company lied to investors about how global warming could hurt its balance sheets and also hid the risks posed by climate change from the public.”
This week, building on Schneiderman’s efforts, 350.org along with other environmental groups delivered a petition with 81,000 signatures demanding other Attorneys General join with Scheiderman. The petitions were delivered to the the National Association of Attorneys General annual meeting in New York City this week.
Despite this pressure, ExxonMobil has maintained that it doesn’t believe any of its assets will ever be stranded or left in the ground — because apparently what ExxonMobil really wants to do is help poor people around the world raise their living standards as explained on the corporate website:
We believe producing these assets is essential to meeting growing energy demand worldwide, and in preventing consumers – especially those in the least developed and most vulnerable economies – from themselves becoming stranded in the global pursuit of higher living standards and greater economic opportunity.
However, once again ExxonMobil is denying reality as climate change is clearly having a growing negative impact on living standards in many poor communities around the world. The Syrian conflict — which even England’s Prince Charles has attributed to climate change and drought — is one current example.
So as opposed to ExxonMobil’s proposed goal of turning poor people into fossil fuel consumers in the pursuit of higher living standards, the reality is that failure to achieve a two degree scenario means a vast increase in the world’s climate refugee crisis and increased conflict.
“The Paris agreement has fundamentally altered the way nations and businesses think about the financial risks of climate change, yet Exxon is standing still as the world changes around it,” said Shanna Cleveland. “The window is closing for Exxon to adapt for the energy transition that is now underway.”
While it is clear ExxonMobil won’t change willingly, with large investors like New York’s pension system and the Church of England now asking for answers, perhaps ExxonMobil will be forced to join the rest of the world in addressing climate change.
Image credits: Liz Gorman for 350.org
