Exxon Warns Assets at Risk From Climate Change

Exxon Mobil has indicated for the very first time that it may possibly have to write down the worth of assets because of to the consequences of climate change threats on demand from customers for fossil fuels.

The nation’s largest oil business stated that as component of its annual organization scheduling approach, it now evaluates climate change as a organization chance, very similar to other operational, strategic, and fiscal threats.

If that approach “results in any major alterations to the corporation’s recent growth designs for its portfolio, sure assets could be at chance for impairment,” Exxon stated in a regulatory submitting.

Right until asset recoverability assessments “are full, it is not practicable to fairly estimate the existence or vary of potential future impairments,” it included.

In accordance to the Houston Chronicle, the warning is “a amazing admission of climate change threats from one of the most recalcitrant oil giants, which has prolonged told investors that the world’s increasing inhabitants will gas an insatiable thirst for fossil fuels and dismissing increasing problems about climate change.”

A lot of of the world’s largest organizations and industries that rely on petroleum have pledged to come to be web-zero emission businesses throughout the coming a long time. In contrast to European rivals these types of as BP and Royal Dutch Shell, Exxon has been reluctant to embrace renewable power but in May well, a climate-minded activist trader received a quarter of the seats on its board.

“It’s a welcome change that ExxonMobil’s new board is forcing the business to face the fact that the climate disaster it aided induce and the changeover to a cleanse power economy will have big fiscal impacts on its assets and base line,” Ben Cushing, marketing campaign supervisor for the Sierra Club’s Fossil-Free of charge Finance marketing campaign, told Reuters.

Exxon stated in its submitting that it “continues to make progress on its greenhouse fuel emission reduction designs and initiatives to situation the business for success in a reduced-carbon emissions future.”

“Exxon appears to be getting climate threats a lot more very seriously as the oil business faces mounting pressure from governments, organizations, and the public to change system to keep away from the worst penalties of climate change,” the Chronicle stated.

asset impairment, climate change, power business, Exxon Mobil