The biggest of Big Oil by revenue and profit, ExxonMobil has consistently improved safety and staff diversity and has invested in improving energy efficiency in its refineries. ExxonMobil does not base planning for projects on any assumptions about the future price of oil, which has helped it achieve consistently high profitability in a cyclical industry. The flip side of its size: ExxonMobil has the largest exposure to environmental risks. It avoids alternative-energy projects that could be less profitable (or money losing) if oil prices decline. And it’s appealing to the Supreme Court for over $2.5 billion in punitive damages related to the 1989 Valdez oil spill of 11 million gallons into Alaska’s waters. (That case is expected to be decided this year.)
MANAGEMENT SCORE 10 out of 25
ExxonMobil’s near-term sustainability focus is energy efficiency inside the company, according to comments on its Web site from Sherri K. Stuewer, vice president of safety, health, and environment. It now has an environmental business planning process to come up with ways to increase energy efficiency and reduce emissions. Longer term, ExxonMobil has committed $100 million to researchers at Stanford University who are looking into carbon sequestration at underground aquifers; the use of genetically engineered bacteria to capture solar energy and produce hydrogen; and new materials capable of storing hydrogen in carbon nanotubes. Despite these efforts, ExxonMobil’s overall transparency for sustainability remains low, and executives declined to be interviewed.
IMPACT SCORE: 39 out of 100
ExxonMobil produced 1.5 billion barrels of oil or equivalents in 2006, and released 160 million tons of greenhouse gases into the environment, significantly more than any of its peers. If a carbon tax of $20 per ton were in place, the cost to ExxonMobil would be $3.2 billion, which would lower its record 2006 profitability by 8%. ExxonMobil spilled 40,000 barrels of oil in 2006, more than any other reporting company.
Alternatives It reported spending $1 billion on cogeneration and has committed $100 million to other climate-change research out of an overall capital budget of $20 million. Refinery improvements ExxonMobil claims to have cut up to 20% of energy usage at its refineries with new technology. It also reports that it has committed $3 billion to reduce gas flaring (which releases heavily polluting methane). Diversity Of ExxonMobil’s12 board members, two are women, one of whom is African-American. Women make up 32% of all employees. Equal Opportunity Publications ranked ExxonMobil among the top 50 U.S. companies for its diversity recruitment, but it’s the only company to be rated zero on the Human Rights Campaign’s Corporate Equality Index, which focuses on gay and lesbian issues. Safety In 2006, three employees and seven contractors died in workplace accidents, bottom-quartile result for staff, but top-quartile for contractors. The rate of accidents per man-hours worked has been improving.
Money for malaria The company has spent more than $40 million over the past seven years fighting malaria, a big killer in oil-rich Africa. Overseas operations ExxonMobil has the best record among the top 10 for its oil sourcing. Only 9 of 22 countries in which it operates, or 41%, are considered low transparency by Transparency International.
Lobbying ExxonMobil’s political contributions nearly doubled between 2004 and 2006, to almost $15 million, the highest lobbying-per-revenue rate in the industry. It has spent an additional $16 million seeking to dispel climate-change science through various think tanks and nonprofits. However, CEO Rex Tillerson made news in early 2007 by stating, “We know our climate is changing, the average temperature of the earth is rising, and greenhouse-gas emissions are increasing.”