In November 2015, ExxonMobil, the world’s largest publicly traded oil company, received a subpoena from the Attorney General of New York. The subpoena sought to determine whether ExxonMobil misled the public on climate change research and failed to make adequate disclosures to investors about the potential risks related to fossil fuel use. ExxonMobil denied the allegations. However, a representative for ExxonMobil stated that “[the company] recognises climate risks are real and responsible action is warranted”.  The world’s changing climate shows responding to a subpoena is not enough, considering the future impact to ExxonMobil operations amidst geopolitical uncertainty
Impact to Operations
At least two major climate trends are relevant to ExxonMobil’s supply chain: (1) increasing intensity and frequency of storm events, flooding and rising sea levels, and (2) decreasing water availability. As hurricanes, storm surges and flooding increases, both the Company’s onshore and offshore physical assets, and therefore their reliability and profitability, are at risk. ExxonMobil utilizes water throughout its end-to-end value chain of conventional oil and gas exploration, shale gas production, transportation of crude and oil and gas refining, and delivering finished products to consumers. 
With 195 countries signing The Paris Agreement in 2016, the world is pushing toward air carbon concentrations below 450 ppm. Some studies estimate that if burned, the reserves on the world’s balance sheets would be double that which is allowed by such a mandate. This would have a significant impact on ExxonMobil, who manages a substantial reserve of fossil fuels. Many experts fear that current valuations of major energy companies do not consider assets and reserves that may be “stranded” by such geopolitical moves. One study estimated that this impact may be 40-60% of current market value. With this shift, Exxon would have to substantially rethink its value chain and reserve allocation across the world. Based on a recent vote, ExxonMobil shareholders agree that this is a significant risk to the company. Shareholders historically voted (62% voting “yes”) for ExxonMobil to analyze a “2-degree scenario,” or an emissions plan that limits the global temperature limit to two degrees per year. This analysis would seek to understand the risk to projects and reserves that would be unfeasible or unrecoverable if the 2016 Paris Agreement were implemented. 
At an organizational level, ExxonMobil has recently appointed a leading atmospheric scientist to its board as it seeks to understand climate change’s impact on its business and supply chain. This is a bold move for a company that has shown a consistent resistance to recognizing the impacts of climate change.  One of the most direct ways that Exxon is limiting its carbon footprint is by expanding cogeneration within its operations. In traditional steam plants, efficiency is typically held at 50%. In cogeneration, heat that is generated from the production of electricity is used in processing operations, and efficiency is increased to around 75%. ExxonMobil currently has interests in 5,500 megawatts of cogeneration capacity internationally, an increase of 25% in the last decade. Through the Global Energy Management System in their Downstream business and Production Operations Energy Management system in Upstream, ExxonMobil is using technology to identify and eliminate excess energy. According to ExxonMobil, their energy efficiency has grown two to three times faster than the industry average. 
ExxonMobil should continue to make strategic strides to reduce its carbon output, but additional pragmatic measures are required to mitigate climate change impacts and to ensure that Exxon drives the conversation on carbon. ExxonMobil should take immediate action to assess the exposure of its assets to more frequent severe weather, most notably its refineries along the Gulf of Mexico and its offshore assets. Future assets should be designed and tested based on these studies. ExxonMobil should also take a cue from other partners such as Shell and Statoil who more openly recognize the impacts of climate change. These partners are more actively uniting with renewable energy partners. ExxonMobil could benefit from lessons learned along the way. If not, they risk being left behind.
- Geopolitical uncertainty aside, what is ExxonMobil’s responsibility to its consumers and the environment, and
- What (if anything) can ExxonMobil sacrifice in its climate change response in the name of profit?
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 Crooks, Ed. FT.com; London (Jan 26, 2017).
 “Combined Heat and Power Basics” https://www.energy.gov/eere/amo/combined-heat-and-power-basics.
 Skjærseth, Jon Birger. International Environmental Agreements : Politics, Law and Economics; Dordrecht Vol. 13, Iss. 1, (2013): 31-48.