ExxonMobil SWOT and PESTLE Analysis

Strength

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Weakness

1. Weak corporate governance: ExxonMobil has developed a reputation of weak corporate governance especially when it comes to climate related disclosures and the impact of its operations on the environment. In its annual general meeting in 2016, the company excluded a climate justice proposal floated by activist investors from being voted by removing it from the proxy ballot. ExxonMobil Corp has also been deleted from Dow Jones Sustainability Index which is a major blow to its reputation. In 2020, ExxonMobil was completely removed from the Dow Jones Industry Average after their uninterrupted presence on the index since 1928. Chevron Corp. is the only oil and natural gas company remaining on the Dow.

2. Environment issues and hazards: The Company has been subject to various agitations for environment hazards. Exxon created advertisements that contradicted their own research on global warming. This has tarnished the image of the company. Various regulatory violations on regular basis have been committed by the Company. The Valdez oil spill of 1989 was one of the lowest points in the history of ExxonMobil, one with long-term repercussions. Not only did the company’s public image suffer a major blow, over 11,000 Alaskan residents were adversely affected by the oil spill. It took 3 years for the cleanup process to be completed and the company was slapped a $4.3 billion lawsuit. Despite precautions and extensive staff training, oil spills are still regular.

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Global switch towards cleantech: Cleantech or clean technology refers to products, solutions and services which improve operational performance with reduction in environmental costs such as pollution, waste or energy consumption. Cleantech has seen major investments over the past few years with participation seen from global oil and gas players. ExxonMobil has also pursued cleantech investments over the past two years as concerns grow about its commitments to climate change. The company is also under pressure from investors and agencies to publish the impact of its energy portfolio on climate change and what it is doing to contribute to limiting the global temperature rise to 2°C above pre-industrial levels as per resolution adopted in United Nations’ COP21 conference. The company has partnered with REG Life Sciences to study biodiesel production from cellulosic sugars as one of its cleantech initiatives. The company has also engaged in significant media promotion over its cleantech activities such as carbon dioxide from power plants, turn algae into biofuel and develop fuel-efficient cars. During the Rio Olympics in 2016, the company spent $19.3 million to air ads on above initiatives and is continuing its promotional activities during other major events as of 2018. ExxonMobil aims to reduce GHG emissions from upstream operations by 15-20% of 2016 levels by 2025 along with a 40-50% reduction in methane intensity and a 35-45% reduction in flaring intensity. To attain these goals, ExxonMobil has invested in capturing technology focused on reducing GHG emissions. The total investment to reduce emissions has been $10 billion since 2000.

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