ExxonMobil and Climate Change: A Story of Denial, Delay, and Delusion, Told in Forms 10-K (Coursework Sample)

EXXONMOBIL ACCUSED FOR CLIMATIC ALTERATIONS – A CASE STUDY
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PART A
Introduction
According to a LVRJ (2016), ExxonMobil has collaborated with the Department of Energy, academics and the UN Intergovernmental Panel on Climate Change for more than four decades, providing public availability of their researches. However, ExxonMobil has availed their rights of not providing specific conclusions regarding climatic alterations over the years. Moreover, the company raised questions on environmental activists that were accessing corporate archives to convince government for investigation. It was desolate news for various stakeholders, ExxonMobil were successful in keeping government away from investigations. According to First Amendment Rights, company is not obligated to climatic alterations.
Analyzing the entire situation chronologically, the perception towards ecology has shifted swiftly in United States of America when people started considering environmental pollution as strong concern. The rate of concerned people reached 60% and various surveys were conducted to generate a rationale. The United Nations (UN) was pressurized internationally in the same year when USA was titled as biggest polluter across the globe (CSW, 2016).
In 2001, the profitability of ExxonMobil and collaborates were influenced by society due global experiences regarding climate change. There was serious imbalance between demand and supply of energy products manufactured by the company. OPEC has set quotas on activities such as explorations, technological researches, and refining. On contrary, changes in demographics have increased demand for energy products simultaneously (CSW, 2016).
* In 2002, ExxonMobil 10-K filing that focuses on risks associated to industry and economy. It specified that changes in weather are influencing demand pattern for energy products. Following the shareholder meeting, approximately 20% shareholders emphasized on adding renewable energy in corporate portfolio, which influenced leaders of developing nations to raise their voice over the issue (CSW, 2016).
* In 2003, ExxonMobil joined Shell and BP to address climatic challenge around the globe by developing various strategies such as ‘Carbon Pricing’. Scientists such as Michael Mann proposed a research on changing temperature due to pollution (CSW, 2016).
* In 2004, 10-K filing focused on impact minimization on air, water and ground, along with emission reduction of nitrogen and sulfuric oxides. Moreover, the threat was focused and worked by numerous nations (CSW, 2016).
* Year 2005 initiated Climate Science Watch that explained various factors in elaborative manner (CSW, 2016).
* Mr. Rex Tillerson took over ExxonMobil as CEO in 2006 and introduced "risk of global climate change" (CSW, 2016).
* In 2007, ExxonMobil focused on climatic hazards and alternate sources of energy to adhere environmental laws (CSW, 2016).
* The 10-K report of 2008 provided evidence that upper management is ignoring IPCC AR4 submissions and repeated clauses from prior year filing (CSW, 2016).
PART – B
Risk Categories
In context to environment and established principles, "The Precautionary Principle" is among them critically. The principle suggests that if cost is higher than benefit, then action should be avoided. This leads to avoid short-term objectives that ExxonMobil is engaged with their efforts towards climatic adherence. Over the years, there are various climatic risks that are ignored by ExxonMobil, which possess hazardous consequences.
In context to short-term environmental objectives, ExxonMobil and various other energy-manufacturing companies such as Shell are compressing gases through hydraulic fracturing. These activities have potential of causing a massive earthquake on broader scale. It must be notified that ExxonMobil is staking millions of lives by using hydraulic fracturing in grounds and spent wells. The effects may not occur promptly, but does have a probability to cause damage to environment and society in future.
It cannot be denied that ExxonMobil is working to find technological resources for risk minimization and control on environmental hazards. However, the pace of discovery is not fitting appropriately with environmental balance. The approach of fossil fuel industry is not adaptable with approaches that energy-manufacturing companies have to offer.
The continuous discharge of toxic gases and liquids in environment (available ground-splinters) by fossil fuel industry has raised threat of earthquake. Fracking is a broadly used term for such exercises that involves exploration and exploitation of land without consent of public. Due to intense fracking in search of alternative energy resources, ExxonMobil has caused threats of earthquake on areas and regions that had least expectancy.
In simpler words, the company is highly neglecting possible precautionary measures that can provide people with clean and safe energy. Instead, ExxonMobil is creating a long-run dispute with multiple governments around the globe that can halt their core operations in matter of years.
Since "Precaution" is considered as test for balancing benefits of alternative energies and environmental alterations, fracking has disturbed the metaphor completely. Another threat raised by this activity is groundwater toxicities and availability of water adequacy in future. Due to fracking, there are leakages in pipelines and water storages that are majorly utilized by households. With contaminated water flowing in residential pipelines, ExxonMobil can start counting number of bodies they might be responsible due to their actions.
Since ExxonMobil is acting as negligible figure towards environmental codes, there are three critical risks involved towards their survival. First, there is a severity in climatic change towards hotness that minimizes the usage of fuel consumption among people. The pace of fracking adapted by company has hardly left a piece of land without disturbance. Moreover, the intensity of their actions has released immense amount of greenhouse emissions, which is a significant threat towards ecology, particularly air.
Second, ExxonMobil is expected to face various suit files due to communication of their products. It must be noted that the company has factual ambiguity when promoting their products and services to consumers. They do not specify, or eradicate, most essential piece of information regarding energy product. While promoting, the company does not disclaim the harm caused by fossil fuels that is clearly welcoming legal and detailed investigation. Lastly, the company clearly disregards cost of externalities that is harming health and environment of people. This indicates that taxes paid by ExxonMobil are inadequate due to ignorance or inclusion of public costs.
PART C
Section 1 – Risk Appetite
The entire scenario of environmental accusation initiated when Mr. Lee R Raymond misinterpreted the environmental fact sheet at Annual General Meeting (AGM) in 2000. It was considered highly questionable for shareholders, as misinterpretation to save industrial reputation was an immature maneuver made by representative of upper management.
Analyzing background of the problem, Dr. Lloyd Keigwin conducted a research using temperature data of Sargasso Sea. The research highlighted that surface temperature of earth is rising sharply, which is a reason for intense global warming in 1998. The global representatives of UN conducted a meeting in Kyoto, Japan, with objective to restrict and minimize released greenhouse gasses and carbon dioxide into ecology. This objective was clearly limiting the organizational likes of ExxonMobil and Shell from their objectives of finding alternative energy through hydraulic fracturing and related land exploration activities (Packard and Reinhardt, 2000).
The issue of global warming started targeting enterprises and energy-manufacturing companies when Mr. Raymond pulled a disaster at shareholder meeting in 2000. He presented the chart as description of earth’s definite temperature, which was one-sided picture actually. Raymond strictly supported the impression that fossil fuels are not responsible for global warming. Instead, the human activity across the globe results in inclining earth’s temperature. However, the author, Dr. Keigwin denied the fact later, stated that his work represents on piece of entire earth, and should not be considered as definite yardstick.
In the investors meeting of 2000, Mr. Raymond misled investors and public through various means. Firstly, investors were misguided over the consensus related to global warming and reasons for inclining temperature. He strictly emphasized that human activity is responsible for disturbing ecology rather industrial activities and explorations that company/ies are conducting in search of alternative energy (Glasgow, 1999).
Second, Mr. Raymond misguided investors through obsolete scientific findings, which were temperature data extracted from satellite. After accusing human activity, he attempted to convince shareholders that global temperature is falling. The data was unreliable since it was outdated and even rectified by author (Glasgow, 1999).
Third, the company misled the worldwide audience through advertisements and mass marketing. ExxonMobil invested on this campaign lucratively in order to convince people regarding global warming. The advertisements telecasted on worldwide television and published in reputed newspapers such as New York Times (NYT) were designated as mischaracterization of scientific findings, deceiving statements, and misguiding (Glasgow, 1999).
Lastly, the public was deceived by ExxonMobil when affiliated organizations were formed to conduct explorations. The...