It's hard to pick a winner in a sustainability faceoff between two oil companies--we've all seen in recent weeks what kind of havoc said companies can wreak--we haven't forgotten about the Exxon Valdez disaster, either. Nevertheless, author R. Paul Herman attempts to compare Chevron and ExxonMobil based on the factors of profit, management, and human impact (health, wealth, earth, equality, trust) in the new book The HIP Investor. So who comes out on top?
ExxonMobil has invested some resources in renewable energy as of late--the company recently ponied up $600 million for a partnership with Synthetic Genomics to develop algae-based biofuel. Exxon has also given Stanford's Global Climate and Energy project, which researches alternative fuels, $100 million over the past decade. And in an email to Herman, Exxon claimed that it has invested over $1.9 billion in activities that cut down on greenhouse gas emissions and improve energy efficiency since 2004 (out of hundreds of billions in yearly revenue). The company also noted that it contributed $235 million to communities worldwide last year.
We shouldn't give ExxonMobil too much credit, though. CEO Rex Tillerson has derided biofuels as "moonshine" and last May he proclaimed that oil production hasn't peaked and the world won't move beyond coal, natural gas, and crude oil for 100 years. That leads us to believe ExxonMobil will never give alternative fuels a truly significant amount of attention.
Chevron fares slightly better in the sustainability department. The company has spent $3.8 billion on renewables, energy efficiency, and emerging energy technologies since 2002. Chevron expects to reach $2.3 billion in capital investment and operating expenses in these sectors between 2010 and 2012. It also recently became the first oil company to track its carbon emissions. And Chevron Energy Solutions is the largest solar installer in the U.S. education sector.
The company's Gorgon Project is slightly questionable, however. Gorgon is set to become the world's largest CO2 injection project, with 120 million tons of reservoir CO2 from the Gorgon natural gas fields (off the coast of Australia) expected to be injected over 1.5 miles underground. But serious safety and environmental concerns remain--not to mention the fact that the Gorgon natural gas fields are offshore (a safety and environmental concern in and of itself).
Even though Chevron only invested $160 million in communities around the world in 2007 (less than Exxon's $235 million in 2009), we still have to declare Chevron the winner in the battle of the big oil companies. It has much more riding on alternative energy than ExxonMobil, and that's a big deal for our collective energy future.
Check out the full HIP Investor chart below.
|Overview||Chevron-branded products are sold in more than 8,800 retail locations in the United States; $273 billion revenue (2008); 67,000 employees||ExxonMobil products are sold in more than 32,000 retail service stations in the United States; $477.4 billion revenue (2008); 104,700 employees|
|Product||From 2004 to 2007, Chevron Energy Solutions helped clients reduce energy use at their facilities by nearly 30% on average; unit profitable and growing since 2003||Introduced Mobil 1 Advanced Fuel Economy, a lower viscosity motor oil that can improve fuel economy by 2% compared to average motor oil|
|15 of 25: Sustaining Environmental, Social, and Health Impact Assessment process across global operation; continue using Operational Excellence Management System self-assessment process||14 of 25: "In such turbulent times, successful companies are those that see business discipline and corporate citizenship as interlinked." Rex W. Tillerson, Chairman and CEO|
|0.36 TRIR (total recordable incident rate), a measure of safety||5%||TRIR = 0.42, slightly higher than Chevron||4%|
|Matches 401(k) one-to-one up to 6%; Chevron invested $160 million in communities around the world in 2008, an increase of $41 million over 2007;||13%||Matches 401(k) one-to-one up to 5%; In 2008, Exxon Mobil invested $189.1 million in communities around the world||14%|
|In 2008, total GHG emissions were 64.3 million metric tons; that is 236 metric tons per $1 million in revenue||11%||137 million metric tons of CO2e emissions in 2008; that is 287 metric tons per $1 million in revenue||9%|
|In 2008, 24.8% of senior executives were women or minorities; 2009 HRC Score = 100 (the highest score possible for gay-friendly work and management practices)||12%||In 2008, approximately 20% of officers and managers were women or minorities; 2009 HRC Score = 0 (zero, the lowest score possible for gay-friendly work practices)||9%|
|Nearly $12.8 million spent on lobbying in 2008; that is $47 per $1 million in revenue; accessible and responsive to investor and media interview||11%||$29 million spent on lobbying in 2008; that is $61 per $1 million in revenue; selectively responds to media channels, sometimes sowing confusion about the facts||8%|
|+29.2% return on equity (2008)
+10.5% annualized total return, including reinvested dividends (6/2004-6/2009)
+5.4% annualized total return, including reinvested dividends (6/2006-6/2009)
|+38.5% return on equity (2008)
+11.7% annualized total return, including reinvested dividends (6/2004-6/2009)
+6.4% annualized total return, including reinvested dividends (6/2006-6/2009)
Table excerpted from The HIP Investor: Make Bigger Profits by Building a Better World by R. Paul Herman Copyright (c) Published by John Wiley & Sons. Used with permission.