Oil giants pressured to adapt business models to low-carbon pathway
ExxonMobil and Chevron have been urged to adapt there business models to account for the 2C climate target established in Paris, after the world's largest shareholder action platform called on millions of civilians to support a change in operations.
Vote Your Pension is using its online platform to call for a shift in the way that pension funds are used by the oil giants, in an attempt to get them to switch to a low-carbon pathway. The platform, which is made up of The Asset Owners Disclosure Project (AODP), ShareAction and SumofUs, will call for asset owners to use voting rights to drive this change.
SumofUs campaign director Liz McDowell said: “SumOfUs members around the world are fed up with their retirement savings being used to support risky and irresponsible decisions by fossil fuel companies.
“More than 15,000 members have contacted their pension funds, superannuation funds and other investment vehicles to demand that Exxon and Chevron diversify away from fossil fuels. Through the Vote Your Pension platform, ordinary people are exercising their shareholder power to hold corporations to account.”
Through the platform, shareholders can vote for resolutions at the companies’ AGMs – the first since the Paris Climate Summit – on 25 May, to make ExxonMobil and Chevron aware of climate risks and diversify and disclose lobbying activities. So far 1,010 funds across 46 countries have declared their voting plans.
ExxonMobil and Chevron could be swayed by a recent report from London-based green finance specialist the Carbon Tracker, which revealed that big oil companies could raise market values by almost £100bn if they embed “carbon-sensitive” initiatives.
With investors beginning to recognise the need to protect portfolios from climate risk, ExxonMobil is attempting to distance itself from the ongoing climate risk furore, after announcing a new collaborative partnership aimed at pursuing novel technologies in Carbon Capture and Storage (CCS) techniques.
The oil giant, which is under increased shareholder pressure from the likes of Aviva to analyse and acknowledge the climate risk of its assets, has announced the new CCS partnership with utilities company Fuel Cell Energy.
As part of the CCS partnership, ExxonMobil will research the effectiveness of carbonate fuel cells, which the fgirm says could “substantially reduce” production costs for the company and create an economic pathway towards large-scale CCS applications across the globe.
“Advancing economic and sustainable technologies to capture carbon dioxide from large emitters such as power plants is an important part of ExxonMobil’s suite of research into lower-emissions solutions to mitigate the risk of climate change,” ExxonMobil’s vice president for research and development Vijay Swarup said.
“Our scientists saw the potential for this exciting technology for use at natural gas power plants to enhance the viability of carbon capture and sequestration while at the same time generating additional electricity. We sought the industry leaders in carbonate fuel-cell technology to test its application in pilot stages to help confirm what our researchers saw in the lab over the last two years.”
The announcement – which did not mention of the total cost of the investment – follows two years of lab tests, with ExxonMobil stating that carbonate fuel cells can be more efficient as a CCS system than traditional models. The research will now spend the next 12 months focusing on separating CO2 from natural gas-fuelled power turbines.
ExxonMobil’s exploration follows on from last week’s news of a 'breakthrough' CCS technology which could pave the way for a sustainable construction industry – which is currently in 'urgent' need of CCS technologies, according to researchers at Chalmers University of Technology in Sweden.
While ExxonMobil is attempting to account for a new low-carbon economy, the firm could still face legal charges from the Philippines, after lawyers recently met with the Commission on Human Rights of the Philippines (CHR) to discuss a hearing into the liability of 50 of the biggest fossil fuel companies for apparently violating human rights in the country as a direct result of climate change.
The Philippine’s case is another example of the growing legal pressure that companies and governments are faced with. Last year, the world’s first “climate refugee” was sent back to his home country of Kiribati, which was facing a crisis over rising sea levels.