Introduction
Today’s lead Operator/Contractor for Guyana’s oil and gas operations, ExxonMobil, has an unenviable history as both a 1] exemplar zombie corporation and 2] strong proponent of corporate information warfare against climate policies and programmes targeted at a 2050s transition. Over this and the next column I shall review both verdicts and Guyana’s entanglement, starting with the latter listed item and the World Benchmarking Alliance, WBA’s verdicts.
ExxonMobil
The WBA has selected ExxonMobil for benchmarking because it is one of the 2000 most influential private businesses shaping and determining whether there is going to be a successful global climate transition. The corporation’s primary businesses – Upstream, Product Solutions and Low Carbon Solutions – provide products that are essential to modern life, including energy, chemicals, lubricants. Further, it holds industry-leading resources as an integrated fuels, lubricants and chemical company.
Its Website boasts of three divisions; namely, 1] Low Carbon Solutions, which is focused on commercializing lower-emission business opportunities i2] The Product Solutions Company focused on products for modern society at an industry-leading scale 3 The Upstream Company is where it all begins.as in Guyana.
.The WBA 2023 Climate and Energy Benchmark of the oil and gas sector is the second iteration of this benchmark. This second iteration brings together the assessment of companies’ climate strategy and performance together with social performance in the same benchmark and ranking. The climate performance is examined through an Assessing Low-Carbon (ACT) assessment. Social Performance is examined through the Just Transition Indicators (JTI), and Core Social Indicators (CSI).
Of the 100 assessed companies, a large majority of them (83) operate across more than one of the three segments [upstream, midstream and downstream]; 64 are fully integrated (covering all three segments of the value chain); and, 19 are semi-integrated (covering two segments of the value chain). Among the other 16 companies, 12 are pure upstream players, four are pure midstream players, and not a single one is a pure downstream player.
Approach to scoring and ranking
A score is given per indicator which is used to calculate the performance element of the ACT score. The narrative assessment is then produced by analysing the company against the four narrative criteria. Data from the performance assessment as well as other verifiable public data on the company such as annual and sustainability reports and news from reliable sources is considered. Finally, the trend score is produced synthesising the forward-looking aspects of the assessment to consider whether the company’s performance would improve, stay the same or worsen if assessed again in the near future.
To create the ACT rating score, a weighting is applied to each of the performance, narrative, and trend scores.’
The WBA Verdict 2023
I’ll avoid further methodological details and reproduce in this section the nine leading benchmarking verdicts on ExxonMobil for 2023 reached by the WBA. These verdicts are reproduced here in the order given in the WBA report, which means no order of ranking is intended. The nine verdicts are
1] With a 2022 revenue of US$398.68 billion and 63,000 employees, along with being the US’ largest publicly traded energy provider, chemicals manufacturer, and explorer for crude oil and natural gas, ExxonMobil easily qualifies as a SDG 2000 influential global business leader in the pursuit of global sustainable development goals.
2] In its Assessing Low-Carbon Transition, ACT, rating ExxonMobil ranks 39 with a rating of 2.6, or D- on an ABCDE scale. Of note ACT accounts for 60 percent of the ranking scale
3 ] Its Just Transition, JT, rating, is 1.3 out of 20. This counts for 20 percent of the overall ranking Score. It is assessed from performance in areas like communities, worker rights, and vulnerabilities in 450 of the most influential high carbon emitting sectors.
4] WBA’s core social score of 4.5/20 also counts for 20 percent of its overall benchmarking of ExxonMobil in 2023. Together with the JT addressed above 40 percent of the benchmarking depends on wider developmental and societal considerations
5] The WBA urges that ExxonMobil’s transition plan aims to achieve zero Scope 1 and 2 emissions by the 2050 target date, with the caveat that it is unclear whether the company will be relying on purchasing offsets.
6] For Scope 3 emissions WBA notes that there is no commitment from ExxonMobil in its transition plan. And, worse. Scope 3 emissions account for 87 percent of ExxonMobil’s emissions! These Scopes are determined by where the emissions originate from. Thus, Scope 1 covers direct emissions that a company generates while performing its business activities, whereas Scope 2 covers indirect emissions from purchased energy. And, Scope 3 emissions covers indirect emissions in ExxonMobil’s value chain.
7] The WBA reports that in its most recent reporting year, 2022, ExxonMobil plans expenditure of US$17 billion on low-carbon intensive solutions between 2022 and 2027. This amount is only 15 percent of its 2022 capex.
8] The WBA further notes that ExxonMobil does not report its spending on R&D for low-carbon technologies.
9] Further, the WBA highlights that ExxonMobil is a strong supporter of trade associations leading lobbies against climate transition policies and has been reputationally damaged
Conclusion
The issue of great concern to us is whether ExxonMobil, the lead Contractor/Operator’s loss of credibility is terminally damaging to Guyana’s, the Americas newest Petrostate. I explore this topic next week and also report on the zombification of ExxonMobil.
