The Latest Exxon Report is Another Reason to Divest
Late last year, under pressure from its shareholders, ExxonMobil* agreed to release a report on the business impact of a “two-degree scenario” world, in line with the global commitment of the 2016 Paris Agreement to limit global average temperature rise and avoid the most catastrophic effects of climate change. Investors hoped that the report would inform shareholders about business risks that the fossil fuel giant will face in an emissions-constrained future.
Instead, ExxonMobil’s Outlook for Energy is insistent that operations can largely continue unimpeded. ‘Business-as-usual’ is the theme as the Company expects the proportion of oil and natural gas in the global energy mix to increase by 2040, and it fully intends on producing 90% of the Company’s current proved oil and gas preserves.
How does ExxonMobil reconcile a two-degree scenario with ‘business-as-usual’? In the short term, the Company plans to expand the supply of natural gas, transition manufacturing facilities to produce higher value petroleum products, mitigate emissions from its own facilities, and to help develop consumer products to reduce emissions such as “special tire liners.” ExxonMobil’s only stated long-term plan is just as underwhelming: conducting and supporting technological research.
Although the report gave ExxonMobil an opportunity to meaningfully address its energy production mix and reduce risk for investors in a two-degree future, the company instead doubled down on fossil fuels. As investors, we should not be surprised. Engagement with the fossil fuel industry has proven to be a lost cause, and in the case of ExxonMobil, can provide ample opportunity for greenwashing and downplaying a company’s role in contributing to climate change.
The ExxonMobil report is just another example of the fossil fuel industry’s refusal to take responsibility for its role in causing climate change, participate in transitioning to a clean energy economy and underscores the importance of divesting from fossil fuels. Whereas engagement gives the fossil fuel industry a seat at the table, divestment pulls the chair out from under. Institutions around the world are increasingly shrinking their tables, highlighted most recently by New York City’s announcement to divest its $189 billion pension fund within five years while simultaneously suing five of the largest fossil fuel companies in the world for damages caused by climate change.
MIDANA CAPITAL, the first family of responsible and diversified fossil fuel free funds by prospectus, believes in an investment strategy that helps investors save for the future without supporting fossil fuel companies like ExxonMobil that refuse to participate in a low-carbon world.
How prevalent are fossil fuels in your portfolio? MIDANA CAPITAL Capital Management has a number of resources on the importance of fossil fuel free investing, including our Fossil Fuel Free page and Make a Clean Break: An UPDATED guide to Personal Divestment and Reinvestment.
*No securities mentioned were held in the portfolios of the MIDANA CAPITAL Funds as of December 31, 2017. References to specific securities, which will change due to the ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor.
Stocks will fluctuate in response to factors that may affect a single company, industry, sector, or the market as a whole and may perform worse than the market. Bonds are subject to risks including interest rate, credit, and inflation. The Funds’ environmental criteria limit the investments available to the Funds compared to mutual funds that do not use environmental criteria.
You should carefully consider the Funds’ investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information, please visit click here, or call 1-800-93-GREEN. Please read the Prospectus before investing.
This information has been prepared from sources believed to be reliable. The views expressed are as of the date of this writing and are those of the Advisor to the MIDANA CAPITAL Funds.
The MIDANA CAPITAL Funds are distributed by UMB Distribution Services, LLC. 2/18
