ExxonMobil announced yesterday a brand new “ambition” to hit net-zero carbon emissions by 2050, becoming the last of the world’s oil giants to offer some commitment to the idea of a carbon-neutral future.
On the surface, that’s a significant about-face for a company that has historically downplayed the devastating and accelerating effect fossil fuel production has on climate change.
Only last year, the oil major suffered a bruising defeat in its battle to squash activist shareholders who wanted to hold the company to a higher standard of environmentalism. But campaigners are unconvinced that Exxon’s pledge will make a meaningful difference.
For starters, the pledge only covers Exxon’s Scope 1 and 2 emissions, which is the pollution caused by Exxon’s direct operations—such as running the electricity in its offices, or letting methane leak from its oil fields. But, like all oil companies, the overwhelming majority of Exxon’s carbon emissions fall under the Scope 3 category: emissions produced by its customers.
According to Exxon’s own data, 80% of carbon emissions that can be traced back to the company come from Scope 3 sources. That’s a no brainer: oil produces carbon when it’s burned. Without pledging to tackle Scope 3 emissions, Exxon’s 2050 “ambition” is not nearly ambitious enough.
Admittedly, some might argue it’s unreasonable to hold a producer accountable for how its consumers use its product. After all, if all of Exxon’s customers mind their own Scope 1 and Scope 2 emissions, that would naturally resolve the issue of Exxon’s Scope 3 emissions.
The debate over whether consequence of use is the responsibility of a product’s supply side or demand side is hashed and rehashed in the regulation surrounding gun, drug, and cigarette manufacturers. Yet, last year, a Dutch court ruled that Shell was legally responsible for its Scope 3 emissions, setting a precedent for holding oil companies accountable for the consequences of oil production. Shell is appealing the ruling. But, for my own two cents, companies absolutely should be held accountable for Scope 3 emissions.
Forcing oil majors to consider their Scope 3 emissions increases the number of industries pouring resources into a shared problem, where Company A’s Scope 3 emissions overlap with Company B’s Scope 1 and 2 emissions. The issue of pollution is then no longer solely a supply or demand side problem: it’s both.
Plant-based protein giant Beyond Meat has become one of the most shorted companies on the U.S. stock markets as skepticism overtakes hunger for fake meat. Short positions on the California-based company have increased 40% since late October, after the group posted a revenue warning and then missed its third quarter revenue targets. Despite gaining widespread popularity in 2020, muscling into fast-food franchises like KFC and McDonalds, fake meat sales plateaued in 2021. FT
Wind picks up
Scotland completed its first auction of offshore wind farm rights on Monday, awarding lots to oil giants BP and Shell, as well as Spain’s utility operator, Iberdrola. If built, the proposed wind projects could triple Britain’s wind power capacity and help petroleum companies, like BP, transition to a role as green energy providers. The Scottish government—which has devolved powers from the sovereign U.K. parliament—leveraged the auction to pressure BP and Shell into maintaining jobs in the country, as investment in oil and gas plummet. NYT
EVs race ahead
Electric vehicles sales trumped diesel engines in Europe for December, marking the first time EVs have surged ahead of polluting combustion engines. More than 20% of new cars sold in Europe last month were full electric vehicles—so excluding hybrids—while diesel vehicles slipped to below 19% of sales. In 2015, diesel cars occupied over half of the market. NYT
BlackRock CEO Larry Fink used his annual letter to corporate leaders this year to defend stakeholder capitalism—even though the U.S.-based industry group Business Roundtable adopted “stakeholder capitalism” as the guiding principle for business in 2019. Fink might have been trying to convince political pundits more than business leaders, as some U.S. political elements have attacked corporate America’s “woke capitalism.” But Fink’s letter also drew fire from climate advocates, who accused the BlackRock CEO of shirking his own pledge to divest from polluting industries. Fortune
Fortune is opening its education platform, Fortune Connect, to a wider audience—including you, dear reader. Fortune Connect is a member-driven community designed to inspire and educate future corporate leaders, through live discussions and interviews with executives from top-tier companies. You can learn more about the platform, and sign up, here. Fortune Connect
IN CASE YOU MISSED IT
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India’s states woo Tesla after Elon Musk complains about difficulty launching in the country by Biman Mukherji
20 million acres
The U.S. Forest Service plans to thin 20 million acres of wood and grassland over the next ten years—clearing an area about the size of South Carolina—and will “support treatment” of a further 30 million acres across land outside its jurisdiction to defend against increasingly fierce wildfires. In 2020, wildfires burned over 10 million acres of land in the U.S., destroying over 12,000 buildings. The Forest Service’s new plan to prevent forest fires will be financed with $3 billion from the Biden administration’s new infrastructure plan.
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