Climate change is a global issue that requires the collaboration of governments, companies, consumers and other stakeholders. We engage with stakeholders directly and through trade associations around the world to encourage sound policy solutions for addressing climate change risks.
Effective climate change policy
Free markets, innovation and technology are essential in addressing the risks of climate change. Success in developing and deploying technologies will be highly dependent on governments creating a policy environment that enables innovation and competition. Policies should be clear and guard against duplicative, overlapping and conflicting regulations, which may distort markets and impose unnecessary costs on consumers. We believe that effective policies are those that:
- Promote global participation;
- Let market prices drive the selection of solutions;
- Ensure a uniform and predictable cost of greenhouse gas emissions across the economy;
- Minimize complexity and administrative costs;
- Maximize transparency; and
- Provide flexibility to react to developments in technology, climate science and policy.
Given the wide range of societal priorities and limited global resources, all policies should be as economically efficient as possible. ExxonMobil believes that market-based systems that place a uniform, predictable cost on greenhouse gas emissions are more effective policy options than mandates or standards. Market-based policies more effectively drive consumer behavior and technology innovation, while mandates and standards limit consumer choice and can perpetuate ineffective technologies.
We engage a variety of stakeholders on climate change issues — including policymakers, investors, consumers, nongovernmental organizations, academics and the public — to advocate for responsible policies that would be effective in addressing the risks of climate change. We offer data and policy analysis on proposals and engage in constructive debate. For example, we have had hundreds of meetings with policymakers around the world to share our views on carbon pricing policy. Learn more about ExxonMobil’s approach to political advocacy and contributions.
As issues related to climate change arise at the local, state, national and regional levels, our global team of experts evaluates and develops a company position consistent with our principles. ExxonMobil employees also hold key leadership positions, including board of director positions, with many trade associations that engage on climate change issues, including the American Petroleum Institute, the International Association of Oil and Gas Producers and IPIECA.
ExxonMobil understands that stakeholders seek a better understanding of the positions of the oil and gas industry, as well as how individual companies approach the management of climate change risks within their own businesses.
As an active member of IPIECA, ExxonMobil engaged with member companies in advance of the 2015 Conference of Parties (COP) 21 meeting in Paris to develop a common industry position on global efforts to address climate change risks. That work culminated in The Paris Puzzle — a publication on the challenges and responses the industry believes are needed to mitigate the risks of climate change.
We also took a key role collaborating with IPIECA and its member companies to create a voluntary reporting framework for oil and gas companies to publish their climate change risk management approach in a simple, straightforward and transparent manner. The resulting framework covers a wide range of climate-related issues and provides a consistent reporting methodology for the oil and gas industry. This framework enables interested stakeholders to understand an individual company’s views on the issues central to addressing climate change risks.
Climate risk oversight
ExxonMobil’s board of directors is responsible for risk oversight, including the risks of climate change. The board routinely reviews and considers these risks through briefings on public policy, scientific and technical research, as well as company and external positions and actions in this area. Climate-related matters are also considered by the board throughout the year in various other contexts, including reviews of the Outlook for Energy, the company’s safety, health and environmental performance, the annual corporate planning process, shareholder proposals and regulatory filings such as the 10-K.
The chairman and chief executive officer and other members of the management committee have responsibility for management of climate risk, including in business plans, performance and public policy. The long-term nature of ExxonMobil’s compensation program requires consideration of the risks of climate change and other sustainability matters.
The board’s public issues and contributions committee assists the board in providing oversight of the corporation’s safety, health and environmental performance, including issues associated with climate risks. This committee reviews the effectiveness of the corporation’s policies, programs and practices on safety, health and the environment, and social responsibility. The committee receives reports relating to operating units’ safety and environmental activities and visits operating sites to observe and comment on current operating practices. For example, in 2017 the committee and other board members visited ExxonMobil’s research and development facilities in Clinton, New Jersey, to review our research programs, including advanced biofuels and carbon capture and storage. All members of the committee are independent within the meaning of the New York Stock Exchange listing standards. The committee’s charter is available in the Corporate Governance section of our website.
We believe an effective policy response to climate change requires a thorough understanding of the climate system. Our scientists have been involved in climate change research and related policy analysis for more than 35 years, resulting in hundreds of publicly available documents on climate-related topics, including more than 50 peer-reviewed publications.
ExxonMobil experts have participated in the United Nations Intergovernmental Panel on Climate Change since its inception. Most recently, our scientists contributed to the Intergovernmental Panel on Climate Change Fifth Assessment Report in lead author, review editor and reviewer roles. Our scientists also participated in the work of the U.S. National Academy of Sciences, including its work to review the third U.S. National Climate Assessment Report and to provide advice to the U.S. Global Change Research Program.