Shareholder Resolution Filed with ExxonMobil on Sustainable Energy Access
The Tri-State CRI supported member the Dominican Sisters of Caldwell in filing a shareholder resolution with ExxonMobil on Sustainable Development Goal (SDG) 7, which calls for universal access to reliable, affordable, sustainable, and modern energy. Roughly 3 billion people worldwide rely on wood, coal, charcoal or animal waste for cooking and heating, and nearly 1 billion people have no access to electricity at all. Lack of access to modern energy stands in the way of meeting most of the other SDGs.
Though oil and gas companies play a role in expanding access to reliable and affordable energy, this must be done with climate climate change mitigation as a simultaneous goal. Progress in integrating renewable energy and climate regulations is essential for realizing SDG 7. The entire oil and gas industry produced about 40 percent of the world’s carbon emissions in 2017, exacerbating climate change effects like severe droughts, food scarcity, and natural disasters. Over 95% of people who lack access to electricity live in Sub-Saharan Africa and Asia, where billions of dollars in oil and gas revenues have not trickled down to communities lacking energy access.
In light of the recent IPCC report that outlines severe climate impacts of warming of 2°C as opposed to 1.5°C, the Tri-State CRI is reinforcing the need for more urgent and aggressive action by companies in its shareholder engagement. ExxonMobil has long spoken of the “dual challenge” of increasing energy access while mitigating climate change, at times referencing expansion of energy supplies as a moral imperative. In their 2017 Sustainability Report, CEO Darren Woods stated that he is “proud of the role we play in raising living standards. Millions of people have escaped extreme poverty in the last two decades due in part to increased access to energy.” ExxonMobil has profited greatly from exploration and production in countries like Mozambique, Papua New Guinea, Guyana, and Malaysia, without amply contributing to the financial or infrastructure development essential for energy access. The company is actively exploring in Mauritania, where only 41% of the population has access to energy, and offshore oil and gas developments threaten the fishing industry which comprises 50% of Mauritania’s exports. In Guyana, Exxon has struck $200 billion in offshore oil reserves, yet their contract with the country extorts over $900 million in pre-contract costs, and offers only a two percent royalty and 50 percent of profits. Guyanese communities are expressing increasing alarm over the low compensation deal, as well as mounting environmental concerns.
Though ExxonMobil has long spoken of the importance of alleviating energy poverty, its efforts have focused disproportionately on carbon-intensive energy development as opposed to increasing access to clean energy. The company’s Energy Outlook proposes that oil and gas will remain the primary energy sources through 2040, contradictory to the rapid decarbonization necessary to meet Paris Agreement goals and limit warming to less than 1.5°C. Companies like Total and Enel are partnering with Sustainable Energy for All (SE4All), a multi-stakeholder initiative working to achieve quantifiable results in energy access, renewable energy, and energy efficiency. Total set a goal to expand access to portable solar units to 25 million people in Africa by 2020, and Enel committed to accelerate sustainable energy access through power grid efficiency and electrification initiatives. Shell has also invested in decentralized solar.
The “Sustainable Energy Access” shareholder resolution was filed for consideration at the Annual General Meeting of the company in May 2019 to be voted on by all shareholders. It states that both prongs of the “dual challenge”- ensuring energy access and mitigating climate impacts, can and must be addressed simultaneously by integrating SDG 7 into business activities. The resolution requests that ExxonMobil issue a report on how its business activities to the provision of affordable, reliable, sustainable, and modern energy to alleviate energy poverty in alignment with international climate goals. We encourage investors to support this proposal with ExxonMobil this proxy season.