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Exxon Mobil Unveils 5-Year Plan To Meet Climate Change Goals, Increase Shareholder Value

March 3, 2021 2:15 pm
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Exxon Mobil Unveils 5-Year Plan To Meet Climate Change Goals, Increase Shareholder Value

Exxon Mobil Corportation (NYSE:XOM) unveiled a five-year plan Wednesday to grow shareholder value and meet the climate goals laid out in the Paris Agreement.

What Happened: After a challenging year brought on by the pandemic, Exxon released a plan ahead of its virtual investor day event to demonstrate how it plans to grow its earnings and pursue technology to adapt to the changing energy landscape. I

The plan calls for Exxon to spend $16-$19 billion in 2021 and $20-$25 billion per year through 2025 on high-return, cash-accretive projects in order to sustain and grow its dividend, reduce its debt and fund future projects.

Most of Exxon’s plans lay in its intentions to pivot its practices to become a leader in low carbon emissions, according to a press release.

To meet the net zero carbon goal by 2035, Exxon said it will continue to reduce its emissions through carbon capture technology and low-carbon hydrogen.

Why It Matters: When Exxon reported earnings last month, the scope of the company's struggle was apparent.

Exxon’s earnings per share for the fourth quarter were down 92.68% over the year, while its revenues decreased 30.72% over the same period last year.

This was widely expected, as the halt in travel and decreased use of vehicles during the pandemic massively lessened the demand for oil.

To maintain its leadership role in the energy sector, however, Exxon has to transition its business to cut greenhouse gasses and become more eco-friendly.

What’s Next: Exxon’s newly created subsidiary ExxonMobil Low Carbon Solutions has a partnership with FuelCell Energy Inc (NASDAQ:FCEL) to advance carbonate fuel cell technology to capture CO2 from the air.

Exxon’s goals are to initially focus on using its expertise in CCS technology to capture C02 and store it safely in deep geological formations.

“The company’s 2025 emission reduction plans include a 15 to 20 percent reduction in upstream greenhouse gas intensity versus 2016 levels, supported by a 40 to 50 percent reduction in methane intensity and 35 to 45 percent reduction in flaring intensity,” it said in the press release.

XOM Price Action: Shares in Exxon Mobil were trading up 1.94% at $57.16 at last check. 


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