Exxon Mobil, the largest oil and gas business in the US, is considering making a vow to achieve net carbon neutrality by 2050, a significant step for a company that has previously derided attempts by its European counterparts.
Shell, BP, and TotalEnergies, formerly known as Total, have all pledged to decarbonize their operations by 2050, in line with the global acceptance of the Paris Agreement targets. The Paris Agreement sets a limit of 1.5°C (34.7°F) or 2°C above pre-industrial levels for global temperature rises.
According to reports, Exxon Mobil CEO Mr. Darren Woods and the company’s board of directors, which includes three members of the activist investment firm Engine No.1, is now seriously considering carbon neutrality.
The change in stance towards climate change among European Big Oil firms comes amid a broader reckoning of emissions, which plummeted during the COVID-19 outbreak. The crunch in demand weakened the profits of the industry, leading executives to question the long-term viability of continued investment in fossil fuels.
Shell and BP wrote out billions of dollars in hydrocarbon investments and rushed to incorporate newer, cleaner energy sources into their portfolios.
The attitude in Exxon’s coincides with a shakeup in its board of directors following activist hedge fund Engine No.1’s activities. Exxon faced “existential commercial risk” in April, owing to its vast portfolio of fossil fuels and delayed progress in the energy transition.
It demanded that Exxon’s board of directors be restructured for the western biggest oil explorer to follow the global agenda on fossil fuel emissions.
According to Mr. Chris James, who founded the hedge fund last year, Exxon Mobil’s attempts to increase carbon capture and produce biofuels have “produced more advertising than results.”
Exxon absorbed fewer than 1 percent of its pollutants, according to Engine No.1, which owns a $50 million investment in the corporation. By 2025, the company’s overall emissions, including those from its goods, will continue to climb.
Oil companies in the United States, the world’s largest producer of oil and gas, are coming under more scrutiny as President Mr. Joe Biden’s administration pushes for a shift to greener energy sources to reduce emissions. It has halted new exploration on federal lands and brought The country back into compliance with the Paris Agreement.