As businesses and consumers demand more action on climate change, what will it take for fossil fuel companies to remake their image?
Exxon is the latest big oil company to make headlines, with its recent announcement that it would write down $17 to $20 billion in natural gas assets as the value of those investments has declined over time. The move was a departure from past practice for Exxon, which had refused to admit its investments in fossil fuels were trending in the wrong direction.
Andrew Logan, senior director of oil and gas at the sustainability nonprofit Ceres, works with investors who want to push fossil fuel companies to engage on issues of climate change. He said Exxon’s announcement is primarily an acknowledgement of a past strategic error, rather than a signal of any major shift going forward.
“The assets it is writing off require there to be massively higher natural gas prices to break even, and it has been clear for a while that the company would never be able to develop them,” Logan said. “What is significant here is that the company is finally, begrudgingly, admitting this.”