Global NGOs challenge finance sector to say no to new fossil fuels

Global NGOs challenge finance sector to say no to new fossil fuels

Tuesday May 26, 2020

Shareholders of ExxonMobil urged to divest from company whose expansion plans violate climate limits

DALLAS, TEXAS –  The day before this year’s ExxonMobil shareholder meeting, 160 climate, human rights, faith and indigenous groups released the Finance Climate Challenge, establishing a clear climate-safe boundary for any financing to the fossil fuel industry: Coal, oil, and gas companies are eligible for investment only if they commit to stop expansion and tender a plan for phase out. 

“Investor groups committed to climate action are increasingly sending mixed signals to fossil fuel companies. Some screen out companies that derive more than a certain threshold of profits from fossil fuels. Others demand companies commit to ‘net-zero’ emissions by 2050. To impact company behavior, clear standards are needed. We need a line in the sand that starts now: No new expansion.” -Clara Vondrich, Director of Climate Finance at Stand.earth

Research by Oil Change International is clear that meeting the Paris Agreement’s goals to limit global warming to 1.5°C would require the oil and gas industry to choose one of two paths: Wind down its fossil and petrochemical business and return value to shareholders, or transform its core business to the production of renewable energy at scale.  

“Maintaining a safe climate requires an ambitious just transition away from fossil fuel production starting now. There is more carbon than we can afford to burn in already operating oil, gas, and coal fields and mines. New production is not Paris-compatible and investors should plan a fast exit from any company that says otherwise.” -Hannah McKinnon, Energy Transitions and Futures Program Director, Oil Change International

Groups released the Finance Climate Challenge the day before ExxonMobil’s annual general meeting (AGM), which is taking place virtually at 9:30 CT on May 27, to underscore that Exxon has the most radical expansion plan of any oil major, despite a longstanding campaign of investor groups to bring the company in line with climate goals.  

“Shareholder engagement with the oil industry has failed. Nowhere is it more clear than with Exxon. The architect of climate denial and delay is now pushing us to the brink with a reckless expansion agenda prioritizing growth of its oil and petrochemical business. Exxon’s investors must divest, with any reinvestment conditional on the company’s pledge to stop expanding and wind down.” -Clara Vondrich, Director of Climate Finance at Stand.earth

The fossil fuel industry maintains that further expansion can be reconciled with climate targets because Carbon Dioxide Removal (CDR) technologies, such as direct air capture and carbon capture and sequestration, will be available to offset new emissions. Both the Intergovernmental Panel on Climate Change and the United Nations Environment Program have warned that reliance on such unproven technologies is a major risk in our ability to limit warming to 1.5°C.

“The writing is on the wall: fossil fuels are a bad investment, not only from an environmental and human rights perspective, but also from a financial one. Financing new oil and gas developments is throwing money down a hole and, ultimately, bankrolling disaster. Investors should not allow CDR or other industry-backed technological quick-fixes to distract from the only reliable solution to climate change: shifting away from fossil fuels.” -Nikki Reisch, Director, Climate & Energy Program, Center for International Environmental Law 

Many of Exxon’s peers have scaled back in response to COVID-19, slashing capital expenditures and dividends in 2020. But Exxon CEO Darren Woods stressed that the pandemic is just a temporary setback: “ExxonMobil’s capital allocation priorities remain unchanged. The company’s objective is to continue investing in industry-advantaged projects to create value," he said on May 1.

“It is an affront to all of our moral teachings that even in the midst of a global pandemic and a climate crisis, the world's richest and most powerful energy companies and banks are actually still increasing their investments in new fossil fuel infrastructure. These are the same fossil fuel and bank CEOs whose industries cause climate-induced disasters that force innocent people around the world to become climate refugees.  The injustice and immorality of this is staggering.  Hundreds of millions of people of faith around the world demand better.” -Reverend Fletcher Harper, GreenFaith

Exxon is now pushing forward with the Gulf Coast Ventures petrochemical facility in Corpus Christi and the Wink-to-Webster pipeline in the Permian Basin that would pump up to 1.5 million barrels of crude a day from west Texas to the Gulf Coast for export.  

“Deciding to finance the self-destruction of human beings and millions of other species isn’t a business decision, it’s a life decision. Expansion of fossil fuels while simultaneously blocking the just transition to renewables defies science, morality, and the realities of a struggling extractive industry. End Exxon’s gross violations of human rights, indigenous rights, and the rights of future generations.” -Tara Houska, Giniw Collective 

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MEDIA CONTACT: Gary Cook, Global Climate Campaigns Director, gary@stand.earth, +1 202 297 2370 (PST)