Climate governance

Overview

Our Board of Directors oversees and provides guidance on the company’s strategy and planning, which includes opportunities and risks related to climate change and the energy transition.  Directors engage with experts from inside and outside the company and apply their individual experience and perspective to guide the company’s capital-allocation priorities, with a focus on growing shareholder value and playing a leading role in the energy transition. The independent lead director plays a key role in these shareholder engagements and, in consultation with the Chairman, develops Board meeting agendas.

Assessing climate risk

The Board, collectively and through its Environment, Safety and Public Policy (ESPP) Committee, regularly engages with senior management on climate matters and our environmental approach and performance. This includes briefings with internal and external subject-matter experts, which can cover elements of scientific and technical research, public policy positions, greenhouse gas emission-reduction performance, and new technology developments.

As part of the business planning process, the Board reviews and discusses technology deployment within the business lines and research on new technology to further Scope 1 and 2 emission reductions for ExxonMobil’s operated assets. The Board approves company strategy and annual capital allocation, and reviews assumptions and sensitivities in testing major projects and investments for resiliency across a range of potential outcomes.

After discussion and dialogue with ExxonMobil management, the Board exercised its oversight in endorsing the company’s plans through 2027. This included increasing investments in lower-emission initiatives to approximately $17 billion during that period.

Independent directors engage directly with shareholders to gather insights and share perspectives on issues of importance to the company, including discussions regarding the risks and opportunities related to climate change and the energy transition. The Board uses its committees to oversee a broad spectrum of interrelated risks and opportunities to grow shareholder value, with each committee incorporating aspects of climate-related risks within their charters.

• The Environment, Safety and Public Policy Committee oversees operational risks associated with safety, security, health, and environmental performance including actions taken to address climate-related risks, lobbying activities and expenditures, and community engagement.
• The Finance Committee oversees risks associated with the company’s capital structure and capital allocation, including actions to enhance resiliency.
• The Audit Committee oversees ExxonMobil’s overall enterprise risk management approach and structure, which is applied to risks related to climate change, among other business risks.
• The Nominating and Governance Committee oversees matters of corporate governance, including Board transition and refreshment.
• The Compensation Committee reviews executive compensation, which is aligned with the long-term interests of shareholders and requires careful consideration of current and future risks, such as those related to climate change.