The Paris Climate Agreement, agreed to by 195 countries, adopted a legally binding global climate deal. The agreement which is set to begin in 2020, seeks to limit the effects of climate change on the planet. The goal of the agreement was to, at a minimum, keep the increase of the global average temperature to below 2° Celsius, but ideally to limit the increase to 1.5° degrees. Countries, as well as local authorities, will be responsible for reducing their emissions .
As the US and other developed countries strive to reduce their emissions, regulations will need to be imposed to limit the amount of emissions that companies produce. Per the White House Office of the Press Secretary, The United States has pledged to reduce its global emissions by 26-28 percent by 2025. The U.S. target will roughly double the pace of carbon pollution reduction in the United States from 1.2 percent per year on average during the 2005-2020 period to 2.3-2.8 percent per year on average between 2020 and 2025 . The White House under the Obama administration has instructed the EPA and other agencies to cut emissions from oil and gas systems .
The climate crisis has been caused primarily by 90 companies – one of which is United States based Exxon. Of these leading companies, Exxon has caused 3.2% of global emissions to date; which ranks them second amongst all companies . It is clear Exxon cannot continue with business as usual, however, it is unclear exactly what steps Exxon will need to take. Exxon has said that the economics of climate change are too hard to predict for them to give investors hard numbers about the business of global warming and that global demand will create even more demand for resources . At the end of the 2015, Exxon had oil reserves of 24.8 billion . So, the question is: Will Exxon be permitted to burn their reserves when factoring in the Paris agreement and the global trend to clamp down on greenhouse gas emissions and if they cannot burn these reserves what does that mean for the company?
Exxon CEO, Rex Tillerson, has taken a defiant stance; he stated that “cutting oil production was “not acceptable for humanity . Exxon shareholders aimed to propose that the company publish an annual report about how public climate change policies could potentially impact the company’s profits. Exxon management actively tried to block the proposal from even being heard and the SEC had to step in and force the vote. In May of 2016, against Exxon management’s wishes, 38 percent of Exxon shareholders voted in favor of publishing the report. While a substantial percentage of shareholders, the request did not receive enough backing to be implemented .
Exxon management is either in denial about the effects of climate change, hopeful that the Paris agreement will fall apart, hopeful that a climate change denier is elected President or perhaps being deceitful to prevent the erosion of company value. However, Exxon taking this short-term view is not to the benefit of its shareholders, this country or this planet. Exxon is actively fighting efforts to combat Climate Change. Exxon is currently being investigated for funding the publicity that doubted climate change, all the while its own scientists were writing about the seriousness of climate change . Unfortunately, Exxon does not seem to be taking any steps to seriously address the effects of climate change. However, that will not change the fact that extensive and most likely profit damaging changes are going to be implemented in the oil and gas markets. Regulators may need to step in and force Exxon’s hand – whether that maybe further curtailing of emissions or forcing the Exxon management to account for and publish future potential losses from the inability to burn of their reserves. Exxon has been a tremendously profitable company, but it very unclear if it will be save place to invest over the next 25 years.
 EC.Europa. 2016. Paris Agreement. [ONLINE] Available at: https://ec.europa.eu/clima/policies/international/negotiations/paris/index_en.htm. [Accessed 3 November 2016
 The White House. 2015. FACT SHEET: U.S. Reports its 2025 Emissions Target to the UNFCCC. [ONLINE] Available at: https://www.whitehouse.gov/the-press-office/2015/03/31/fact-sheet-us-reports-its-2025-emissions-target-unfccc. [Accessed 3 November 2016]
 The Guardian. 2013. Just 90 companies caused two-thirds of man-made global warming emissions. [ONLINE] Available at: https://www.theguardian.com/environment/2013/nov/20/90-companies-man-made-global-warming-emissions-climate-change. [Accessed 3 November 2016]
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 Exxonmobil. 2016. ExxonMobil Announces 2015 Reserves Additions. [ONLINE] Available at: http://news.exxonmobil.com/press-release/exxonmobil-announces-2015-reserves-additions. [Accessed 3 November 2016]
 NYTimes. 2016. Exxon Investors Seek Assurance as Climate Shifts, Along With Attitudes. [ONLINE] Available at: http://www.nytimes.com/2016/05/24/science/exxon-investors-seek-assurance-as-climate-shifts-along-with-attitudes.html. [Accessed 3 November 2016]