Exxon Mobil Corp. entered 2020 with a multiyear growth plan projected to significantly increase its greenhouse-gas emissions. Then came Covid-19 and criticism from activist investors over its record on climate and financial returns.

Now the year will end with Exxon setting new, more ambitious targets to reduce emissions per barrel of oil and disclose, for the first time, data on pollution related to customers’ use of its fuels.

Like Chevron Corp., Exxon’s climate goals are linked to reducing emissions intensity, meaning less pollution per barrel of oil produced, as opposed to cutting absolute emissions. That leaves the company wiggle room to increase its overall contribution to climate change in the future if crude output grows.

“This was a company that was way behind the industry in terms of how they were thinking about a low-carbon world,” Aeisha Mastagni, a fund manager at California State Teachers’ Retirement System, the second-largest U.S. public pension fund, said in an interview. “The fact that they’re just now getting on board to announce some of those reduction plans tells us a lot about their long-term strategy.”

Rising Intensity

Exxon’s upstream emissions intensity climbed in the decade through 2018

Source: Exxon Mobil

Exxon’s targets appear weaker than many of those made by European oil companies that have set reduction goals linked not only to internal operations but to customers’ use of products like gasoline. These so-called Scope 3 emissions had not previously been disclosed by Exxon, even as many other oil majors have published such figures.

All major European oil companies have set net-zero goals. BP Plc, Repsol SA and Eni SpA aim to deliver absolute reductions in the short term, whereas Royal Dutch Shell Plc, Total SE and Equinor ASA have set emissions intensity goals. Exxon’s goals are “specific, actionable plans that we can hold our organization accountable” for, said Pete Trelenberg, Exxon’s director of greenhouse gas and climate change, during a call with reporters. The targets will be updated over time, he said.

Will Exxon’s Emissions Targets Satisfy Larry Fink?: Bloomberg Opinion’s Liam Denning