ExxonMobil has announced it will publish a Carbon Asset Risk report describing how it will account for the risk of stranded assets from climate change.
The move follows increased pressure from the fossil fuel giant’s shareholders.
The announcement is perhaps the strongest signal yet of the growing concern among investors about the future value of fossil fuel assets in a world that faces catastrophic implications if those fuels are taken out of the ground and burned.
Natasha Lamb from Arjuna Capital, one of the groups that had submitted the resolution, said:
We’re gratified that ExxonMobil has agreed to drop their opposition to our proposal and address this very real risk. As investors, we want to ensure our Companies’ capital will yield strong returns, and we are not throwing good money after bad.
The International Energy Agency has warned that at least two-thirds of fossil fuels will have to remain in the ground if the world is going to stay below the danger threshold of 2°C of warming.
Last year, a report from Carbon Tacker revealed that despite this clear warning, as much as $647 billion was pumped into trying to find and develop new fossil fuel reserves in 2012 alone.
Such investments are at risk if governments adopt tougher climate laws which leave such reserves ‘unburnable’.
ExxonMobil is rated as the world’s fourth largest fossil fuel company. At the end of 2013 its reserves equalled 25.2 billion oil-equivalent barrels, roughly split between oil and gas.
The Exxon announcement follows an international movement to get universities, cities, foundations and governments to rid themselves of investments in fossil-fuel companies.
It also comes almost 25 years after the Exxon Valdez oil spill.