Report on Climate Change Strategy

WHEREAS:
· Consistent with predictions of increasingly severe weather due to climate change, natural disaster losses appear to be doubling every decade and in the next ten years will reach close to $150 billion if current trends continue. (UN Environment Program's Finance Initiative with 295 financial institutions.)
· Business Week says "U.S. companies don't have the luxury of sticking their heads in the sand over global warming." (11/4/02). DuPont VP David Findlay says carbon cuts "are likely a reality all over the world…The sooner you start managing your business with that in mind, the better off you will be.''
· "One thing is clear: the unrestricted right to emit greenhouse gases at no cost is fast disappearing." (Swiss Re, 10/01)
· Globally, public policies mandating alternative energy, emissions reductions and emissions trading are increasing. Companies without experience in these areas may be at a competitive disadvantage.
· The New York Times reported that Swiss Re is considering excluding from coverage companies or directors that are not addressing climate change (08/02). The managing director of the company's Greenhouse Gas Risk Solutions unit said that emissions reductions are becoming a "clear liability issue" for corporate managements and boards.
· A leading think-tank found the impact of governmental climate policies on ExxonMobil could create nearly a 4% loss in shareholder value (WRI, 2002).
· Former Chase Investment Bank director Mark Mansley found that ExxonMobil's handling of global warming exposes the company to unnecessary risks including reputational risk, litigation risks and risks from sudden policy changes and missed opportunities.
· A clear climate strategy is essential, yet we believe ExxonMobil's discussions lack detail and comprehensiveness.
· Deutsche Bank's September 2002 risk analysis at ExxonMobil raises these concerns: "[H]ow nimble has the current management been in terms of ... communicating a detailed strategy to shareholders, and dealing with the new environmental age?"
· ExxonMobil's competitors report several of the following strategies to manage climate risk: transparent targets, timetables and reports on emissions and reductions; participation in trading schemes; carbon valuation in project planning; sequestration; and outside auditors to verify some information.
· Fortune 100 companies (BP, Ford, DuPont, Phillips, Conoco) discuss the potential economic impacts to the company of climate change in their SEC 10-K or equivalent filings.
· ExxonMobil's participation in Stanford University's Global Climate and Energy Project is welcome, but does not address the concerns of this resolution as no strategy is articulated.
· We believe that ExxonMobil has failed to adequately disclose how it will address the risks and opportunities global warming poses; ExxonMobil provides little detail concerning the challenge of reconciling production growth with stabilized or reduced emissions, and the company leaves shareholders virtually in the dark as to how ExxonMobil will protect shareholder value from climate change.

RESOLVED:
Shareholders request the Board to prepare a report (at reasonable cost and omitting proprietary information) by September 2003 describing any operating, financial and reputational risks to the company associated with climate change and explaining how the company will mitigate those risks.