Exxon Climate Disclosures: Big Oil Hides Carbon Forecasts From Investors

A giant oil company like Exxon Mobil Corp. will publicly disclose forward-looking numbers on production forecasts, earnings potential and capital expenditures. But the biggest fossil-fuel producers don’t provide short-term guidance to investors on the metric that’s become existentially important: carbon-dioxide emissions. There’s evidence oil majors do assess the climate consequences of their future plans. Exxon had internal projections, never made public, that showed a 17% rise in carbon-dioxide emissions over the next five years, according to company documents reviewed by Bloomberg. In a statement, Exxon said those projections were “a preliminary, internal assessment of estimated cumulative emission growth through 2025” and that its projections had since changed.

Yet the largest U.S. oil company, like other publicly traded oil producers, only releases backward-looking emissions totals. “We would like to see Exxon make its emission projections public,” said John Hoeppner, head of Legal & General’s U.S. stewardship and sustainable investment unit. The fund manager is a top 20 Exxon shareholder, according to Bloomberg data. “Ambitious targets for absolute emissions are a key part of our assessment.”

“It’s fascinating to me that Exxon puts so much effort into tracking these [future] emissions internally, yet chooses not to disclose them,” said Andrew Logan, senior director of oil and gas at Ceres, a nonprofit network of institutional investors who focus on climate risk and manage $29 trillion in assets.

Exxon has never made a commitment to lower either its oil and gas production or eliminate greenhouse gases, so perhaps it’s not surprising that the company doesn’t publicize expectations around emissions. But even oil giants with bold targets to neutralize emissions by mid-century, such as BP Plc and Royal Dutch Shell Plc, don’t allow investors to scrutinize their emissions forecasts for next year.

Incomplete disclosures across the industry make it harder to judge the feasibility of plans to adapt to climate change or to track progress on long-term emissions goals. Short-term emissions forecasts “could add credibility,” said Jonas Rooze, head of sustainability at BloombergNEF, as investors parse climate-driven scenarios that may be 10 or 20 years out.

A gap in information can also raise questions for investors. The fact that Exxon tracks emissions forecasts without updating its investors means “either the company sees this as a competitive advantage, which seems sort of absurd,” said Logan, who doesn’t own Exxon shares, “or the company feels like it has something to hide.” The internal projections reviewed by Bloomberg included emissions forecasts for 2021 and 2025.

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