Oil and gas giant Exxon Mobil Corporation has reportedly announced its plans to create a business unit named “low carbon solutions” which would be focusing exclusively on technologies that minimize carbon emissions. The gas company is experiencing increasing pressure to augment its sustainability investments in recent times.
Exxon, on this initiative, has stated that as a part of this new business, it would invest $3 billion through 2025 on lower emission energy technologies, predominantly on carbon capture and storage ventures which collect carbon emissions from industrial operations or directly from air and deposit them underground. This investment would represent approximately 3% to 4% of the company’s planned annual capital expenditures.
For the record, Exxon has a large division of R&D that has been investing in carbon capture for years and claims to have captured more carbon than any other firm. At present, captured carbon is extensively used for generating more fossil fuels by pumping in gas to squeeze out more oil and gas from the ground.
Chief Executive of Exxon, Darren Woods stated that with Exxon Mobil’s leadership in carbon capture and technologies pertaining to emissions reduction, it is committed to catering to the demand for affordable energy while reducing carbon emissions.
According to credible sources, after the COVID-19 outbreak last year, Exxon was in discussion with its top U.S. rival, Chevron Corp. for merger. However, the discussion was described as preliminary and is not ongoing at present.
The companys woes have apparently drawn attention of activist investors, of which Engine No. 1 LLC, which has argued that Exxon should invest more in renewable energy while focusing on reducing costs elsewhere for preserving its dividend. The company has reportedly nominated four directors to its board last week and called for it to make strategic changes to its business plan.
Reportedly, Exxon has been in discussions with D.E. Shaw Group, another activist, and has been planning to declare the appointment of one or more new members to its board, additional expenditure cuts, and investments in new technologies for reducing carbon footprint.