2011 Corporate Citizenship Report CONTENTS 1 2 4 6 7 8 Letter from About The Outlook Report Engagement Performance the Chairman ExxonMobil for Energy: Philosophy and Data and CEO A View to 2040 Materiality
10 12 20 Operations Environmental Case Study: Integrity at Performance Technology Kearl
Environmental stewardship Biodiversity and ecosystem services Freshwater management Spill performance Emissions and waste Site remediation
22 26 32 Managing Safety, Health, Corporate Climate and the Governance Change Risks Workplace
Mitigating GHG emissions in our operations Personnel safety Board of Directors Energy effi ciency Process safety Shareholder relations Cutting-edge technology Product stewardship and safety Ethics Responsible product use Workplace security Global management standards Public policy debate Employee health Political advocacy and contributions Employment policies and practices
36 Business Procurement 38 44 Case Study: Economic Human Integrity in our Development Rights and Supplier Supply Chain Managing Community Impacts
Contributing to economic growth Community impacts and relationships Transparency Respecting human rights National content development Labor practices Community investments Addressing security concerns Employee volunteerism and giving Indigenous peoples
Citizenship Focus Areas Environmental Performance Ms. Erica Bauer Nevas 48 50 Environmental stewardship through responsible Feedback management Corporate Citizenship Operations IPIECA/GRI Biodiversity and ecosystem services Please visit ExxonMobil Hydraulic fracturing exxonmobil.com/ Integrity in Content Index Freshwater management 800 Bell St. Spill performance citizenship Houston, Texas 77002 Downstream and Assurance Emissions and waste Site remediation citizenship@ Case study: Technology and Chemical Managing Climate Change Risks exxonmobil.com
Mitigating GHG emissions in our operations
Developing cutting edge technology 2011 Corporate Citizenship Report 1
LETTER FROM THE CHAIRMAN AND CEO, EXXON MOBIL CORPORATION
“Our greatest strength is developing the technology and techniques that maximize value while increasing safety, effi ciency, and environmental performance.” Rex W. Tillerson, Chairman and CEO Keynote Address at CERAWeek, March 9, 2012
In an era of global change and market volatil- and at our integrated refi nery and chemical a number of ways. On the issue of climate ity, one thing is certain: citizens around the facility in Singapore (page 48), we are apply- change, for example, we participated as an world will continue to seek economic and ing our global management standards to help observer in the United Nations Framework social progress to build a better quality of life us engage communities, and improve envi- Convention on Climate Change meeting for themselves and their families. The role of ronmental and safety performance. We hope in Durban, South Africa (page 25), and we secure, reliable, and affordable energy in sup- these “site visits” will provide you, our reader, maintain ongoing discussions with legislators porting these aspirations will be critical. with a clearer understanding of our practices. and offi cials on policy and technology options to address rising greenhouse gas emissions. At ExxonMobil, we are proud of the role we In communities where we are producing shale play in supplying the energy to meet the Comprehensive risk management natural gas, we are working with city councils, world’s needs. These needs are expected to Risk management is another key element in neighbors, homeowners, and regulators to grow by about 30 percent by 2040, as econo- our approach to corporate citizenship. Few open lines of communication and share facts mies expand and the world’s population industries are called upon to manage as and information (page 14). In nations around the approaches 9 billion people. Providing this many complex risks as the energy sector. world, we are reaching out using engagement energy in a safe and environmentally respon- ExxonMobil has operations around the world, methods as diverse as the communities where sible manner, and at the enormous scale that in some of the harshest climates and environ- we operate. For instance, in countries like will be required, is one of the great challenges ments. What makes our business successful is Papua New Guinea, we have developed out- facing the world in the coming decades. our commitment to carefully and systematically identify, plan for, and manage risk. We do this reach strategies that are sensitive to the local This Corporate Citizenship Report explains through a rigorous management approach— culture and customs (page 47). This report itself how ExxonMobil is playing its role in meeting our Operations Integrity Management System, is part of our commitment to engagement with this challenge. In it, we document our plans, or OIMS, outlined on page 35. OIMS integrates those who take an interest in our company. initiatives, and performance related to safety, safety, security, health, environmental, and In the following pages, you will fi nd a the environment, economic development, social risk management into every aspect of summary of our efforts to communicate with corporate governance, and social progress. our business. This year, some of the trends stakeholders on our shared priorities; these in our safety and environmental performance include responsible unconventional resource Integrity in action did not meet our expectations and we are development, water use, biodiversity, trans- As you will read in this report, ExxonMobil’s taking action to address them. We will not stop parency, and our dialogue and engagement approach to business and corporate citizen- working to achieve our goal of driving acci- with indigenous communities, among others. ship is built upon a commitment to integrity in dents and incidents with a real impact to zero. In each case, we know that engagement on everything we do. Simply put, integrity is a com- these items leads to stronger, more sustain- mitment to do the right thing, the right way, every Stakeholder engagement able business performance. time—from business operations and technical Finally, our commitment to corporate challenges to the way we manage our business At ExxonMobil, we believe that high standards citizenship is fundamental to our business, partnerships and engage with stakeholders. and clear metrics are critical to discharging government, and community relationships. our responsibilities as a leading global energy Integrity in our industry makes us more respon- The need for energy—vital for economic producer and corporate citizen. We invite you sible, more innovative, and more productive. development and human progress—must to read about our citizenship performance in In the decades ahead, we believe this will be met while addressing environmental and this report, and we welcome your comments. be essential for meeting the world’s energy social impacts associated with increasing needs—and for fulfi lling our responsibility to demand for energy resources. future generations. We believe addressing this dual challenge This year’s report includes two case studies requires constructive and respectful engage- Rex W. Tillerson that demonstrate integrity in action. At our ment with our stakeholders. We do this in Chairman and CEO Kearl oil sands project in Canada (page 10) 2 exxonmobil.com
About ExxonMobil
Taking on the world’s toughest energy challenges. Using innovation and technology, ExxonMobil delivers energy and petrochemical products to meet the world’s growing demand. Our employees, operations integrity, technical expertise, fi nancial strength, and global reach provide a competitive advantage across the companies that make up our Upstream, Downstream, and Chemical business lines. Within these businesses, we operate facilities or market products in nearly all of the world’s countries and explore for oil and gas on six continents. Our extensive research and development programs support our operations, enable continuous improvement in each of our business lines, and explore new and emerging energy sources and technologies.
ExxonMobil’s 2011 Global Economic EXXONMOBIL PROCESSES AND MANAGEMENT SYSTEMS Contribution
Capital and Shareholder Across ExxonMobil’s global operations, we use consistent management standards to help exploration distributions ensure operations integrity and support our decision-making. These systems—a selection expenditures $29 billion $37 billion of which is highlighted below—set high expectations for operating excellence at our sites.
Operations Integrity Management System Upstream Socioeconomic Management $226 billion (OIMS). Establishes common expectations Standard. One of the Environmental for addressing safety, security, health, envi- Management Standards, this framework ronmental, and social risks. OIMS provides helps the upstream companies manage a systematic, structured, and disciplined socioeconomic issues from exploration and Government Production, taxes and manufacturing, and approach to measure progress and track production to decommissioning (page 45). duties office expenses accountability across business lines, facili- $108 billion $52 billion Environmental Business Plans. ties, and projects (page 35). Corporate-wide framework for addressing Standards of Business Conduct. environmental requirements and expecta- Defi ne the global ethical conduct of the tions as part of the annual business cycle Oil and Gas Industry Contributions Corporation and its majority-owned sub- (page 13). to the U.S. Economy sidiaries. These Standards uphold values Environmental, Socioeconomic, and Health related to human rights, labor, the environ- Impact Assessment (ESHIA). A formal Jobs Supported ment, and anti-corruption (page 34). analysis to identify key risks and develop Controls Integrity Management System. strategies to appropriately manage these 9.2 5.3% Provides a structured approach to assess- risks throughout the asset life cycle (page 18). million of U.S. ing and measuring fi nancial control risks, Global Energy Management System employment developing procedures for mitigating (GEMS). A management system that system- concerns, monitoring compliance with atically identifi es and addresses operational standards, and reporting results (page 35). energy effi ciency opportunities for the Down- Labor Income ExxonMobil Capital Projects Management stream and Chemical business lines (page 23). System (EMCAPS). Framework to guide Production Operations Energy Manage- capital project development and execution $ % ment System (POEMS). Incorporates a 533.5 6.0 (page 13). billion of U.S. systematic approach to energy management labor income Best Practices in External Affairs. to improve energy effi ciency in the Upstream Strategic planning and management tool business (page 23). for practicing excellence in community Product Stewardship Information relationships at every level (page 46). Value Added to U.S. Economy Management System. Applies common National Content Development Guidelines. global processes to capture and com- $ % Provide the key elements of a national municate information on the safe handling, 1.1 7.7 content strategy and plan, including the transport, use, and disposal of our prod- trillion of U.S. models and tools for the successful devel- ucts (page 28). gross domestic opment of national content (page 39). product (GDP) Technology Management Systems. Environmental Management Standards. Processes for technology investment that Source: PricewaterhouseCoopers, May 2011; accessible at api.org Establish a consistent approach to environ- follow a gated management system from mental management for the business lines early technical innovation to fi nal deployment and projects (page 13). (page 20). 2011 Corporate Citizenship Report 3
GLOBAL INTEGRATED OPERATIONS
Upstream Downstream Chemical Our upstream asset base is geographically As the largest global refi ner, ExxonMobil has ExxonMobil is a leader in the chemical diverse with exploration and production interests in 36 refi neries in 21 countries, sup- industry, with interests in 51 wholly acreage in 36 countries, production sites plying fuels, lubricants, and other high-value owned and joint-venture manufacturing in 23 countries, and sales of natural gas in products and feedstocks to our customers. locations worldwide. 32 countries.
Crude Oil & Natural Gas Feedstocks
Research & Development Production Refining & Supply Products
Upstream Exploration Development Research & Lubricants & Fuels Research Engineering Specialties Marketing
Natural Gas Customers Products Customers Products Customers
4.5 6.4 25 million oil-equivalent million barrels million metric tons barrels of net oil and per day of petroleum of chemical prime gas production per day product sales product sales
UPSTREAM
DOWNSTREAM
CHEMICAL 4 exxonmobil.com
The Outlook for Energy: A View to 2040
Each year, ExxonMobil takes a comprehensive look at long-term trends in energy demand, supply, emissions, and technology to guide our own investment decisions. In 2012, we extended our Outlook to the year 2040. The Outlook projects that global energy demand in 2040 will be about 30 percent higher than in 2010, even with signifi cant gains in energy effi ciency. It is clear that expanding prosperity across a world with a growing population requires access to reliable and affordable energy supplies.
From cars to cell phones, pharmaceuticals to plastics, and air conditioning to water heating, energy is a fundamental part of people’s lives. Access to reliable energy enables modern life and human progress.
Population and economic from 2010 to 2040. Oil and other liquid fuels Meeting global transportation growth drive demand will remain the world’s largest energy source needs through liquid fuels in 2040, meeting about one-third of the Population growth is one reason why demand. Substantial supply increases will One of the most profound shifts in energy ExxonMobil sees global energy demand come from sources such as global deepwater use through 2040 will come from the trans- rising by about 30 percent from 2010 to 2040. and oil sands production. portation sector. The proliferation of more By 2040, there will be nearly 9 billion people effi cient vehicles will result in fl attening energy on the planet, up from about 7 billion today. The fastest-growing major energy source will demand for personal transportation, even as be natural gas, with global demand rising by the number of personal vehicles in the world The world’s economies will continue to about 60 percent from 2010 to 2040. By 2025, doubles to 1.6 billion, mostly from growth in grow with varying rates. ExxonMobil esti- natural gas—which emits up to 60 percent 1 China and other Non-OECD countries. mates OECD economies will expand about less carbon dioxide (CO2) than coal when 2 percent per year on average through 2040, used for electricity generation—will have In spite of this shift, economic growth will as North America, Europe, and other regions overtaken coal as the second most utilized increase demand for trucks and heavy-duty gradually strengthen their economies. Non- fuel source after oil. vehicles. As a result, starting in 2030, these OECD economies will grow much faster: vehicles will use more fuel than all personal almost 4.5 percent per year. Signifi cant Global demand for less carbon-intensive vehicles combined. energy effi ciency gains across economies fuels—natural gas, nuclear, and renewables— Overall, global energy demand for trans- throughout the world will keep the pace of will rise at a faster-than-average rate. For portation will rise by nearly 45 percent from demand growth substantially lower than that example, nuclear power will grow about 2010 to 2040. In 2040, 90 percent of global of economic growth. OECD energy demand 2.2 percent per year—a substantial increase, transportation will run on liquid petroleum- will fl atten through 2040, while Non-OECD but lower than projections made before the based fuels, compared to 95 percent today. demand will rise by 60 percent and represent 2011 tsunami damage to the Fukushima This high percentage is driven by the fact the vast majority of the increase in global nuclear plant in Japan. that liquid fuels contain more energy per energy use. Wind, solar, and biofuels also will see strong volume compared to other sources of energy growth. By 2040, they will account for about used in vehicles. Evolving supply of energy sources 4 percent of global demand. Wind is the to meet demand fastest-growing energy source as projected in the Outlook, rising at about 8 percent per Demand for all forms of energy is projected year on average through 2040. to rise at an average annual rate of 0.9 percent
1Refer to the Organization for Economic Cooperation and Development (OECD) website for a listing of its members, oecd.org. 2011 Corporate Citizenship Report 5
Global demand for electricity Global Progress Drives Demand surges Population Gross domestic product (GDP) Energy demand (billion) (trillion 2005$) (quadrillion BTUs) Utilities and other electricity produc- Non-OECD Non-OECD Non-OECD OECD OECD OECD ers transform different types of primary Annual growth Annual growth Annual growth 2010–2040 average 0.8% 2010–2040 average 2.9% 2010–2040 average 0.9% energy—everything from natural gas to coal 18 120 1400 to wind—into electricity used in homes and businesses. Global demand for electricity will Energy savings through efficiency gains to 2040 ˜ 500 rise by 80 percent from 2010 to 2040. As a quads result of greater effi ciencies in power plants, demand for fuels to make that electricity will 9 60 600 rise by only about 45 percent, mostly in China and other Non-OECD countries. Natural gas, nuclear, and renewables will see strong growth through 2040 as generators shift to lower- 19902015 2040 19902015 2040 19902015 2040 carbon fuel sources globally.
Effi ciency gains slow the growth Energy Use Evolves Over Time of energy-related CO2 emissions Percent ExxonMobil expects global energy-related Biomass Coal Oil Gas Hydro Nuclear Other renewables emissions to level off by 2030, even as overall energy use continues to increase. This trend 100 is the result of signifi cant improvements in energy effi ciency, plus shifts toward natural gas and other less carbon-intensive fuels, as efforts continue to manage the risks posed by rising greenhouse gas emissions. 50 By 2040, OECD emissions of CO2 will be 20 percent lower than in 2010, while Non- OECD countries will account for more than 70 percent of global CO2 emissions, com- pared to 60 percent in 2010.
Providing solutions to advance 18001850 1900 1950 2000 2040 human progress Source: Smil. Energy Transitions (1800-1960) During the past 100 years, we have seen a dramatic change in the amount and nature Natural Gas Production by Type Natural Gas Demand by Region of global energy use. Advances in technol- (billions of cubic feet per day) (billions of cubic feet per day) ogy have played a huge role in shaping the Unconventional Non-OECD demand for energy, and the types of supplies Conventional OECD used to meet that demand. To help people 600 600 prosper in the decades ahead, the world will need to expand supplies of reliable, afford- able energy, while ensuring these supplies are provided in a safe, secure, and environ- mentally responsible manner. The scale of 300 300 this challenge is enormous, and we remain dedicated to fi nding practical, broad-based solutions. To learn about ExxonMobil’s contri- butions in these areas, see page 22. 2000 20102020 2030 2040 20002020 2040
Explore enhanced web content at exxonmobil.com/citizenship 6 exxonmobil.com
Report Philosophy and Materiality
As the world’s largest publicly traded oil and natural gas company, ExxonMobil’s primary role is to responsibly provide the energy needed to sustain and improve standards of living for people worldwide, while delivering a return to our shareholders.
Our 2011 Corporate Citizenship Report citizenship commitments into practice. our policies, programs, and practices. For presents a holistic picture of how opera- Across our citizenship focus areas, we environmental performance data, the units tions integrity underpins our performance in set high standards and strive to continu- of measure are metric where noted. Financial key citizenship focus areas: Environmental ously improve by measuring progress. Our information is reported in U.S. dollars. Performance (page 12); Managing Climate company will continue to reach out and Exxon Mobil Corporation has numerous affi li- Change Risks (page 22); Safety, Health, engage stakeholders as we responsibly ates, with many names that include ExxonMobil, and the Workplace (page 26); Corporate conduct our business. Exxon, Mobil, and Esso. For convenience and Governance (page 32); Economic Development simplicity, those terms, and terms such as (page 38); and Human Rights and Managing Reporting standards and scope Corporation, company, our, we, us, and its, are Community Impacts (page 44). This report was produced in accordance with sometimes used as abbreviated references to ExxonMobil is committed to addressing the reporting guidelines and indicators of the specifi c affi liates or affi liate groups. the challenge of sustainability—balancing International Petroleum Industry Environmental economic growth, social development, and Conservation Association (IPIECA) and the Assurance American Petroleum Institute (API) Oil and Gas environmental protection so that future gener- We believe third-party assurance provides Industry Guidance on Voluntary Sustainability ations are not compromised by actions taken an objective evaluation of how well we Reporting (2010). The majority of these indi- today. Our corporate citizenship approach is report our corporate citizenship information cators are also consistent with the indicators designed to contribute to society’s broader and gives our reporting processes addi- used by the Global Reporting Initiative (GRI) sustainability objectives and to manage the tional credibility. Lloyd’s Register Quality in the G3.1 Sustainability Reporting Guidelines impact of our operations on local economies, Assurance, Inc. (LRQA) conducts annual (see our IPIECA/GRI index on page 50). societies, and the environment. third-party assurance of ExxonMobil’s safety, This report continues our annual practice The report covers ExxonMobil’s operations health, and environment reporting system. of reporting on both our successes and through December 31, 2011, unless otherwise For the full assurance statement, see the challenges in delivering energy to meet indicated. The report uses both qualitative inside back cover of this report. growing demand while putting our corporate descriptions and quantitative metrics to explain
MATERIALITY ANALYSIS
ExxonMobil’s materiality analysis process identifi es economic, environ- We determine priority issues by using a three-tiered review system mental, and social issues of particular interest and concern to both our that rates each issue based on its level of signifi cance to stakeholder stakeholders and business operations. Material issues may have a sig- groups and its potential impact on our business objectives. Through nifi cant current or future impact on our company. We identify issues of this annual analysis, we can monitor recurring issues and identify external signifi cance by monitoring stakeholder expectations and con- emerging ones. We address all our Tier 1 and Tier 2 issues in the cerns through direct dialogue, public debate, legislation, international Corporate Citizenship Report. ExxonMobil’s senior management agreements, and feedback on our Corporate Citizenship Report. We team reviews the results of our materiality analysis, which shapes also review international reporting standards and expectations, such the content of this report. as the United Nations Global Compact and Millennium Development Goals, to ensure a comprehensive, globally focused analysis.
1. Identify issues of 2. Identify issues of concern 3. Assess and rank Tier 1, Tier 2, 4. Develop Corporate Citizenship concern to ExxonMobil to external stakeholders and Tier 3 priority issues Report content based on Tier 1 and Tier 2 issues 2011 Corporate Citizenship Report 7
Engagement
Our approach to corporate citizenship starts with engagement. ExxonMobil has a diverse group of stakeholders with interests in our business performance. While our views and perspectives may not always align, we are committed to engaging in constructive dialogue.
Effective stakeholder engagement depends We focus our worldwide engagement efforts Lamp; and content on our website. Integrated upon relationships built on honest, timely, and on groups and individuals directly impacted throughout this report are examples of how transparent communication. We routinely meet by, or who have a direct impact on, our opera- we engage with stakeholders in each of our with external stakeholders to help us identify tions. Our engagement takes many forms, citizenship focus areas. issues most material to our business opera- including internal and external one-on-one tions and to maintain our license to operate. and group dialogues and briefi ngs; senior STAKEHOLDER ENGAGEMENT The dialogue developed between ExxonMobil executive speeches; quarterly earnings and our key stakeholders allows us to better teleconferences; community consultation ses- This symbol denotes stakeholder align our fi nancial, social, and environmental sions; email communications; our corporate engagement examples within this report. goals with the priorities of wider society. These blog exxonmobilperspectives.com; publi- discussions—and what we have learned from cations such as the Corporate Citizenship our stakeholders—help shape our approach. Report, Summary Annual Report, and The
EXXONMOBIL STAKEHOLDERS
Governments Communities Shareholders Customers Suppliers Employees and NGOs 6 600 ~2.5 Millions ~175 ~82,100 continents with interactive million individuals of consumers thousand suppliers employees exploration and sessions with and more than and industrial of goods in 77 countries production activities 57,189 individuals 2000 institutions customers and services around the world
EXTERNAL CITIZENSHIP ADVISORY PANEL
In 2009, ExxonMobil created an External Assessment Panel to provide an Mark Cohen Elizabeth McGeveran independent review of our corporate citizenship reporting process. The Professor of man- Senior vice president, agement and law Governance and panel reviewed and commented on the 2008, 2009, and 2010 Corporate Owen Graduate Sustainable Investment Citizenship Reports. In 2011, the External Assessment Panel became School of Manage- F&C Management the External Citizenship Advisory Panel (ECAP), with an expanded focus ment, Vanderbilt Limited on providing strategic and objective advice on ExxonMobil’s corporate University citizenship activities. The ECAP comprises fi ve members with diverse Jane Nelson Tim Smith backgrounds and experiences related to corporate responsibility. Director of Director and In 2011, the ECAP visited ExxonMobil’s Irving, Texas, headquarters Harvard Kennedy senior vice president, School’s Corporate Environment, Social, to discuss corporate citizenship performance and policies with our Responsibility and Governance Group management. Panelists also visited our Joliet Refi nery in Illinois to Initiative Walden Asset observe how our standards, processes, and programs are applied Management in our operations. The lessons learned from the ECAP’s visit to Joliet Salil Tripathi For the panel’s inspired the facility-level case studies in this Corporate Citizenship Director of policy statement on this Report on oil sands development at Kearl (page 10) and integrated Institute for report, please visit refi ning and chemical manufacturing at Singapore (page 48). These Human Rights exxonmobil.com/ case studies provide an inside look at the challenges and opportuni- and Business panelfeedback ties of operating in the energy industry. 8 exxonmobil.com
Performance Data
ExxonMobil collects data on a wide range of indicators to track performance. We include indica- tors consistent with the guidance provided by the International Petroleum Industry Environmental Conservation Association (IPIECA) and cross-referenced against the Global Reporting Initiative (GRI) G3.1 Sustainability Reporting Guidelines.
We work to continually improve our performance include XTO Energy Inc. (XTO) information economic climate. We conduct much of this across our citizenship focus areas. This means beginning in 2011. As a result, some of our his- detailed analysis at the operational level. Where assessing performance at many levels of the torical performance trends have been affected, we see unfavorable trends—at any level—we organization, from our operational sites to the as we describe in further detail within this report. identify and aim to correct underlying causes. business lines. We provide data interpretations For certain metrics, no interpretation is nec- Interpreting our citizenship data regularly for where we consider the performance trend essary. For other metrics, we interpret trends allows us to identify the performance issues to be generally desirable (), undesirable (), based upon performance over a multiyear that need the most attention. We describe in or mixed () for applicable data. Performance period and consider other factors in our further detail within the text how we plan to data in the 2011 Corporate Citizenship Report assessments, such as production volumes and address these issues.
CITIZENSHIP DATA
2008 2009 2010 2011 Interpretation Page # Environmental Performance*
Marine vessel spills (owned and long-term leased), number of hydrocarbon spills > 1 barrel 0000 16
Other spills (not from marine vessels), number of oil, chemical, and drilling fl uid spills > 1 barrel 211 242 210 484 16 Hydrocarbons spilled (oil spilled), thousands of barrels 20 17 8 18 16 Other spills, thousands of barrels 01402 N/A Controlled hydrocarbon discharges to water, thousands of metric tons 1.8 1.4 1.3 1.3 N/A
Sulfur dioxide (SO2) emitted, millions of metric tons 0.19 0.16 0.14 0.13 17 Nitrogen oxides (NOx) emitted, millions of metric tons 0.15 0.13 0.12 0.14 17 Volatile organic compounds (VOCs) emitted, millions of metric tons 0.25 0.22 0.22 0.23 17 VOCs emitted, metric tons per 100 metric tons of throughput or production
Upstream 0.069 0.068 0.073 0.076 17 Refi ning 0.012 0.011 0.012 0.011 17
Chemical 0.043 0.036 0.036 0.032 17 Total hazardous waste disposed from operations, millions of metric tons 0.4 0.8 1.3 1.9 17 Environmental expenditures, billions of dollars 5.2 5.1 4.5 4.9 19
Freshwater consumption, millions of barrels 2216 2185 2141 2342 15
Number of hectares of protected wildlife habitat 014026002700 15 Managing Climate Change Risks*
1,2 Greenhouse gas emissions, absolute (net equity, CO2-equivalent emissions), 126 124 125 129 23 millions of metric tons
1,2 Greenhouse gas emissions, normalized (net equity, CO2-equivalent emissions), metric tons per 100 metric tons of throughput or production
Upstream 21.0 20.2 20.3 20.7 24 Downstream 21.0 21.0 20.8 20.4 24
Chemical 59.8 60.7 57.9 57.1 24 Energy intensity, normalized versus Global Energy Management System (GEMS) 93.4 92.6 91.4 90.2 23 base year (2000) – refi ning
Energy intensity, normalized versus GEMS base year (2001) – chemical steam cracking 91.3 90.3 89.3 87.8 23 Cogeneration capacity in which we have interest, gigawatts 4.6 4.9 4.9 5.0 24 Hydrocarbon fl aring (worldwide activities), millions of metric tons 5.7 4.4 3.6 4.1 23 2011 Corporate Citizenship Report 9
2008 2009 2010 2011 Interpretation Page # Safety, Health, and the Workplace
Fatalities – employees 0400 27
Fatalities – contractors 5439 27
3 Fatal accident rate – total workforce (per 1,000,000 work hours) 0.011 0.017 0.006 0.017 N/A
4 Lost-time incident rate – employees (per 200,000 work hours) 0.054 0.043 0.047 0.060 27
4 Lost-time incident rate – contractors (per 200,000 work hours) 0.049 0.040 0.031 0.087 27
4 Lost-time incident rate – total workforce (per 200,000 work hours) 0.051 0.041 0.038 0.076 N/A
4 Total recordable incident rate – employees (per 200,000 work hours) 0.37 0.32 0.24 0.29 27
4 Total recordable incident rate – contractors (per 200,000 work hours) 0.49 0.39 0.34 0.41 27
4 Total recordable incident rate – total workforce (per 200,000 work hours) 0.43 0.36 0.30 0.37 N/A
5 Number of regular employees at year end, thousands 80 81 84 82 31
5 Percent of workforce – non-U.S. 63 63 60 61 30
5 Percent women – global workforce (excluding company-operated retail stores) 25 26 26 26 30
6 Percent management and professional new hires – women 39 38 40 44 30
6 Percent management and professional new hires – non-U.S. 69 63 70 79 30 Corporate Governance
Corporate political contributions – U.S. state campaigns and national 527s, millions of dollars 0.45 0.49 1.10 0.51 35
Percent of shares represented at Corporation’s Annual Meeting 84.8 82.9 80.7 81.9 34 Economic Development
Number of employee participants in corporate and technical training, thousands 48 52 61 65 40
Total corporate and technical training expenditures, millions of dollars 69 71 77 80 40
U.S. spending with minority- and women-owned businesses, millions of dollars 603 863 812 869 37
7 Community investments, millions of dollars 225.2 235.0 237.1 278.4 43 United States 144.6 143.0 154.8 161.3 43
Rest of world 80.6 92.0 82.3 117.1 43
8 Number of Extractive Industries Transparency Initiative (EITI) participating countries 8877 39 Human Rights and Managing Community Impacts
Number of countries in which affi liates received dedicated human rights awareness training 78 15 45
Percent of private security contracts with enhanced language 50+ 60 75 79 45
Notes on performance table: 1 The above net equity greenhouse gas (GHG) emissions metric was introduced in 2011 as a replacement for the direct equity GHG metric. Information has been restated back to 2008 according to this new metric. The net equity GHG metric includes direct and imported GHG emissions and excludes emissions from exports, including Hong Kong Power. 2 ExxonMobil reports GHG emissions on a net equity basis for all our business operations, refl ecting our percent ownership in an asset. Environmental, health, and safety data are reported for our affi liates and those operations under direct ExxonMobil management and operational control. 3 For the past several years, including 2008-2011, ExxonMobil's fatal accident rate has been equivalent to our fatal incident rate. 4 Incidents include injuries and illnesses. Safety data are based on information available at the time of publication. 5 Regular employees are defi ned as active executive, management, professional, technical, and wage employees who work full-time or part-time for ExxonMobil and are covered by ExxonMobil’s benefi t plans and programs. 6 Recruiting numbers for 2011 exclude XTO Energy Inc. 7 Total contributions include ExxonMobil corporate and employee and retiree giving through ExxonMobil’s matching gift, disaster relief, and employee giving programs. 8 In countries where ExxonMobil has an upstream business presence. *Some uncertainty exists in environmental data depending on measurement methods. Data represent best available information at the time of publication. 10 exxonmobil.com
Meeting growing demand for energy Operations Integrity: requires signifi - cant investment in unconventional Developing Unconventional sources. At Kearl, our employees and contractors work Resources at Kearl hard to ensure fl awless execu- tion of our OIMS Framework.
ExxonMobil’s Operations Integrity Management System (OIMS) provides a top-to-bottom framework for addressing safety, security, health, environmental, and social risks in every aspect of our business— from developing an oil sands project to selecting a supplier. This site tour illustrates operations integrity in an upstream project, including the challenges associated with oil sands development.
Overview of the Kearl oil Production is planned to begin in late 2012 Impact Assessment (ESHIA) that high- sands project with a rate near 110 thousand barrels of lighted challenges in land management, bitumen per day. Further expansion will bring environmental protection, and cultural The oil sands in Canada contain the third the rate to 345 thousand barrels per day, heritage for indigenous people whose largest oil reserves in the world after with a more than 40-year project lifespan. traditional lands overlie the Kearl lease Saudi Arabia and Venezuela. The Kearl area. Through the application of OIMS and lease, covering 200 square kilometers Environmental performance to meet regulatory requirements, Imperial and located 70 kilometers north of Fort OIMS Element 2—Risk Assessment and began progressively reclaiming land during McMurray in Alberta, contains among the Management—requires the project to early construction to ensure an ongoing largest and highest-quality of these deposits. conduct risk assessments in order to and self-sustaining boreal forest. Kearl’s ExxonMobil and its affi liate Imperial Oil identify and address potential hazards to end-of-mine-life reclamation plans have Limited are developing the Kearl project personnel, facilities, the public, and the been integrated with its neighbors’ plans to recover an estimated 4.6 billion barrels environment. Element 6—Operations and to protect the surrounding watershed. of heavy oil called bitumen from what are Maintenance—requires that we identify commonly referred to as oil sands—natu- Although the project has not begun pro- and manage signifi cant environmental rally occurring mixtures of water, sand, duction, Imperial has already permanently aspects as specifi ed in an Environmental clay, and bitumen. reclaimed 6.6 hectares of land with an Impact Assessment and consistent with additional 55 hectares undergoing pro- At Kearl, Imperial is constructing facilities regulatory requirements. gressive reclamation in the following areas: to recover the bitumen, convert it to a The surface mining technique used at Kearl, marketable product, and send it via pipe- Soil. As we mine, we salvage and store along with its location in Alberta’s boreal line to refi ning facilities to be transformed soil for reclamation. To date, we have forest, poses challenges that require careful into energy and chemical products. Kearl’s stored more than 14 million cubic meters environmental planning and management. deposits are close enough to the surface of usable soil. The tailings area, con- to be extracted effi ciently using an open- As part of the project planning phase, structed to hold water, clay, and sand pit mining technique. Imperial conducted a comprehensive following processing, will eventually be Environmental, Socioeconomic, and Health reclaimed along with the mine site. 2011 Corporate Citizenship Report 11
Vegetation. Kearl participates in a regional like Kearl—using advanced mining tech- Part of the engagement process includes seed collection program to grow native niques, energy-saving cogeneration, and establishing advisory committees with seedlings for planting during reclamation. producing diluted bitumen without an Aboriginal community residents. These Through participation in the vegeta- upgrader—will result in about the same life committees allow for unfi ltered com- tion cooperative, Imperial has already cycle GHG emissions as many other oils. munication and input from Aboriginal stakeholders. Site tours and quarterly collected enough seeds to grow approxi- Technologies applied at Kearl could meetings are also crucial to our continued mately 4 million trees and shrubs and has signifi cantly reduce production-related engagement. Since 2008, Imperial has already planted more than 22,000. emissions. We estimate that Kearl’s held about 24 meetings and eight site cogeneration facility will reduce carbon Wildlife. We protect wildlife near the tours for community residents. development site by alerting employees dioxide (CO2) emissions by half a million to sensitive areas and enforcing speed metric tons per year compared to Each of the fi ve First Nations in the region limits on our roadways. Kearl also uses a purchased power for the fi rst phase of also has a consultation offi ce called an state-of-the-art bird detection and deter- the project. In order to create a pipeline- Industry Relations Corporation (IRC), rent system in the tailings and process ready product, Imperial will apply a funded by companies working on oil areas to direct migratory birds away. proprietary paraffi nic froth treatment tech- sands developments in the region. The nology designed to remove enough of the IRCs help review project details and relay Fisheries. A portion of the site’s develop- asphaltenes and fi ne solids to produce a feedback or concerns from First Nation ment disrupts fi sh habitat. After extensive crude oil suitable for sale, without needing people. Imperial has established Bilateral stakeholder consultation, Imperial is an upgrader. Processing bitumen only Agreements with four local Aboriginal constructing the fi rst of three lakes, each once reduces life cycle GHG emissions. communities. These agreements include deeper than Kearl Lake, for fi sh to winter. In addition, we are relocating fi sh from exist- ing habitat—totaling about 10,800 small fi sh We mine to access ore deposits, to date. while progressively reclaiming the land back to a self-sustaining Water use. Freshwater required for pro- boreal forest ecosystem. duction comes from the Athabasca River. Surface Less than 4 percent of the river’s fl ow is Soil allocated to industrial users, with Kearl using under 0.5 percent. When in produc- Overburden tion, we plan to maximize the recycling of processed water so that about 80 percent Tailings Ore will be recycled water. Kearl will also have a three-month, on-site water storage facil- Shale and ity to minimize water withdrawals during Limestone the winter low-fl ow period.
In March 2012, Imperial, along with Mine Direction 11 other major oil sands companies, plans to sign the Canadian Oil Sands Innovation Alliance (COSIA) in order to Human rights and managing provisions for fi nancial support to com- pursue enhanced collaboration in water community impacts munity projects, community input into use and treatment, tailings management, project planning, as well as business and reclamation, and greenhouse gas (GHG) OIMS Element 10—Community Awareness employment opportunities. emissions reductions. and Emergency Preparedness—requires that the project seek, recognize, and Imperial consulted with the IRCs to develop a Reclamation Planning Group Managing climate change risks address community expectations and concerns about our operations, including (RPG), which met four times in 2011. The OIMS Element 6—Operations and those of the workforce, in a timely manner. RPG helped increase our understanding of Maintenance—requires the project to the Aboriginal culture and its historic con- establish goals for environmental perfor- Under Canadian regulations, stakeholders nection to the land. Members of the RPG mance, including GHGs. The project must are encouraged to participate in public raised concerns during the reclamation identify alternatives, if applicable, and employ interest hearings to share their opinions planning process, and identifi ed impor- environmental improvement initiatives. related to a project. tant features of the reclaimed landscape. Some have voiced concerns regarding Kearl is located on the traditional lands of For example, the RPG provided input the potential GHG emissions associ- some of Canada’s indigenous peoples, col- into plans for future use, asking that we ated with oil sands development. In fact, lectively referred to as Aboriginal peoples, a include islands in a man-made lake upon a September 2010 report by IHS CERA term used to describe Canada’s First Nation, which moose can protect their calves. noted that “the average oil sands import Metis, and Inuit people. We developed Imperial is assessing this recommenda- to the United States has well-to-wheels Aboriginal Relations Guiding Principles and tion in future planning. life cycle GHG emissions about 6 percent Guidelines and use a consultation protocol higher than the average crude refi ned in to ensure respectful consideration of the United States.” A project designed Aboriginal peoples’ concerns. 12 exxonmobil.com
Environmental Performance
HIGHLIGHTS 0 100 % 9500 spills from owned of our 115 major operating active site remediation and long-term leased sites were screened for water projects stewarded marine vessels and biodiversity sensitivity by ExxonMobil Environmental Services
PERFORMANCE OVERVIEW
What we said in 2010 What we did in 2011 What we plan to do Evaluate and implement lessons Took a leadership role in developing Continue to implement recommen- learned from the 2010 BP Deepwater industry recommendations on improving dations on improving oil spill response Horizon incident oil spill response capabilities capabilities Focus on infrastructure upgrades Responded to the breach in the Continue to evaluate remaining U.S. and special programs at sites with the Silvertip Pipeline in Montana and non-U.S. surplus sites for potential highest spill rates Assessed biodiversity and water conservation value and suitability for Study practices to minimize waste supply risk using improved tools conservation disposition generation and increase reuse and Screened 200 U.S. surplus sites to Review freshwater consumption rates recycling in our Lubricants and identify those with conservation value to identify opportunities for responsible Specialties (L&S) business use at our major upstream sites Continued to study practices to Work to certify remediated sites minimize waste generation and increase Finalize our biodiversity offset program as protected wildlife habitat and reuse and recycling in our L&S business in Papua New Guinea related to our conservation areas project activities Worked with industry and the Ground Water Protection Council to develop Continue our technology development FracFocus, a public reporting system for focused on oil sands fracturing fl uid components 2011 Corporate Citizenship Report 13
Energy development—critical to social and economic progress—requires careful environmental management. Across our diverse global operations, we are committed to fi nding ways to continually reduce environmental impacts. Our environmental stewardship processes are based on detailed analyses that include environmental and social aspect assessments and risk management.
Environmental stewardship drill cuttings management, water manage- Biodiversity and ecosystem through responsible management ment, air emissions, fl aring and venting, and services energy effi ciency. Our L&S Standards of We believe that through careful environ- Environmental Care address spill risk minimi- ExxonMobil uses a systematic approach mental management we gain a competitive zation, energy management, and greenhouse for protecting biodiversity and ecosystem advantage. ExxonMobil’s Operations Integrity gas and other emissions reductions. We services that recognizes factors such as the Management System (OIMS) provides a trained selected employees in the Upstream rarity of individual species, their habitats, their structure for managing safety, security, and L&S businesses on these Standards vulnerability, and cultural value. Ecosystem health, environmental, and social risks. Using through 2011, and plan to continue this effort. services are defi ned as the direct and indirect OIMS, we describe work processes, identify These employees have diverse roles—from benefi ts people obtain from the environ- and mitigate risks, and develop critical proce- environmental and regulatory advisors to ment. They include, for example, food, water, dures. OIMS is consistent with the standard managers and construction environmental recreation, and climate regulation. Preserving for environmental management systems engineers—ensuring broad distribution of the ability of the environment to provide these established by the International Organization knowledge about the Standards across the important ecosystem services is a key environ- for Standardization (ISO 14001:2004). Our upstream and L&S companies. mental risk management area for ExxonMobil. Corporate Environment Policy and OIMS To protect critical ecosystem functions and Framework set expectations that projects Data management. To meet increasing sensitive habitats, we take steps such as will be developed, constructed, and oper- expectations from government agencies modifying engineering design, construction, ated using approved standards that embody for timely, accurate, and auditable data; to and operating practices, and enhancing wild- responsible development, especially in loca- stay ahead of regulatory reporting require- life habitats on or near our properties. We also tions where regulations do not adequately ments; and to enable communication to support advocacy, research, and partnerships protect the environment. our stakeholders and communities; we to protect biodiversity and ecosystem services began implementing an environmental data outside our fence line. Our Protect Tomorrow. Today. initiative guides management system (EDMS) in 2008. At our management processes for maintain- the corporate level, we use EDMS to collect, We identify biodiversity protection objec- ing responsible environmental performance. collate, and consolidate site-level data to tives and consider ecosystem services Through the Environmental Business Planning help manage our environmental performance and exploration activity through our ESHIA process, our management drives environmental indicators globally. At each site, EDMS process, the preparation of Environmental performance considerations into the full life integrates with existing emissions monitor- Management Plans, and our Environmental cycle of our operations, from initial impact ing and measurement systems to allow us to Business Planning efforts. Through participa- assessments to facility design and construction collect up-to-date, site-specifi c information. tion in Business for Social Responsibility’s and through the operations phase. We are deploying EDMS across our major Ecosystem Services Tools and Markets (ESTM) working group, we interface with Assessing our surroundings. For new proj- operational sites, and several manufacturing many industry peers on important ecosystem ects, we conduct risk-based Environmental, and production sites already have air, water, service topics. Our involvement with ESTM Socioeconomic, and Health Impact Assess- waste, and compliance modules in place. helps us to better understand emerging ments (ESHIAs) to identify community policy and technical issues related to biodi- concerns, environmental aspects, and social versity and ecosystem services. and economic conditions. For more informa- tion on our ESHIA process, see page 18. STAKEHOLDER ENGAGEMENT Environmental standards. Our ExxonMobil Capital Projects Management System Community relationships in Baton Rouge, Louisiana (EMCAPS) provides a framework to guide project development and execution. EMCAPS Our Baton Rouge, Louisiana, site is an integrated refi nery and petrochemical facility, with facilitates the consideration of environmen- several smaller chemical plants and a lubricants facility in close proximity. Working with the tal concerns and regulatory requirements communities surrounding the Baton Rouge site is an important part of maintaining our social early in the project design and implementa- license to operate. We engage the community through our ExxonMobil Community Dialogue tion process. In addition, we are developing and Partnership Panel that regularly meets to provide candid feedback to local ExxonMobil Project Environmental Standards for each of management about neighborhood concerns. We publish a quarterly newsletter to address our business lines. fl aring and aquifer use, publicize community outreach projects, and share our annual environmental performance report. We also provide employee-led plant tours for student While the focus areas for each business groups and hold site tours and operational briefi ngs for local and state leaders, government line’s standards vary depending on the type offi cials, and the media. Community members can access updated information on current of project, we expect many business lines operations every day of the year through a dedicated information phone line. to adopt common standards. Our Upstream Environmental Standards address land Because of our employees’ efforts related to local wildlife conservation, the Baton Rouge use, marine geophysical operations, social complex was named the 2010 Conservation Corporation of the Year by the Governor’s and economic issues, waste management, Conservation Achievement Recognition Program, overseen by the Louisiana Wildlife Federation. 14 exxonmobil.com
In 2011, we screened our major sites against At each of these sites, we re-examined our study of the 130 hectares of company-owned databases of the International Union for existing environmental management practices to coastal forest and developed a corresponding Conservation of Nature (IUCN) and World ensure the environmental protection measures ecological management plan. We are in the Protected Areas. We confi rmed that less adequately safeguard nearby protected areas. process of fi nalizing this management plan. than 20 percent of our 115 major Upstream, For example, land surrounding our Slagen, The Papua New Guinea liquefi ed natural Downstream, and Chemical facilities are Norway, refi nery has at least 30 IUCN-listed gas (PNG LNG) project operates in an area within 5 kilometers of designated environ- species present. To ensure future utilization of of valuable and sensitive biodiversity. We mentally protected areas. these areas and adequate species protection, are limiting our impact in the region by we conducted a biological characterization
HYDRAULIC FRACTURING
The economic and environmental advantages For example, our standard procedures and Concerns about hydraulic fracturing are of cleaner-burning natural gas are well-recog- processes include designing well pads to not confi ned to the United States. In 2008, nized. We believe it is in everyone’s interest contain accidental spills, installing multiple ExxonMobil started evaluating potential to respond effectively to public concerns layers of steel pipe and cement to protect unconventional natural gas resources in over unconventional resource development in groundwater and other aquifers, and develop- Germany and elsewhere in Europe. In response order to maximize the benefi ts of this energy ing stringent surface water management and to stakeholder concerns, ExxonMobil con- source. This requires industry both to properly wastewater disposal practices. Additionally, ducted an information and dialogue process manage associated risks, and to explain to the our technology allows us to reduce surface for maximum transparency. Two indepen- public and policymakers how we are doing so. impacts by drilling multiple horizontal wells— dent facilitators brought in well-recognized sometimes thousands of feet through under- scientists to conduct independent research Identifying and managing risk. All indus- ground shale, all from a single well pad. and answer stakeholder questions related to trial processes have risks, and drilling for the safety and environmental sustainability of unconventional oil and gas is no different. The Seismicity associated with unconventional the drilling process and fracturing technology. technical and environmental risks associ- resource development is a relatively new We will continue to engage with stakehold- ated with drilling an unconventional well concern gaining public attention. There ers in Europe and other regions where we are onshore are low compared to other forms of have been a few cases where the deep seeking to develop unconventional resources. energy production. Today’s unconventional underground injection of wastewater for resources are located almost exclusively disposal purposes has been associated with A vital component of building community onshore. As a result, the local and cumu- seismicity. None of these were associ- trust is transparency of operations. We lative risks and impacts associated with ated with ExxonMobil’s wells. There are support the disclosure of the ingredients unconventional oil and gas development may thousands of permitted class II injection used in hydraulic fracturing fl uids, including affect large, often densely populated areas. wells around the United States with very few on a site-specifi c basis. In the United States, We understand stakeholders are concerned being investigated for association with low disclosure appears on the publicly accessible about these risks, including those related to level seismicity. Our geophysicists and other FracFocus.org website, an effort between hydraulic fracturing fl uids and wastewater, experts are engaged in discussions with the Ground Water Protection Council and the well casing and groundwater, vehicle traffi c, others in industry and regulatory offi cials to Interstate Oil and Gas Compact Commission. air emissions, and other related effects. better understand the subsurface impact Launched in April 2011, ExxonMobil and These are important concerns, and we know of oil and gas operations and address the others in industry have voluntarily submitted we must respond to them in every community underlying causes of these events. actual data from more than 10,000 wells. In in which we operate and reach out to commu- Canada, the public can access FracFocus.ca All our shale gas development and produc- nities to ensure our responses are effective. for industry disclosures in British Columbia, tion activities are guided by proven policies, with Alberta and Saskatchewan planned for ExxonMobil has extensive experience in industry guidelines and practices, as well as late 2012. We are pursuing similar disclosure identifying and analyzing risks in all types of more than 40 years of experience in hydraulic approaches in Europe and other areas where oil and gas production operations, and estab- fracturing. A wide variety of publicly available we are exploring internationally. lishing preventive practices and processes information discusses the systems and pro- to manage and mitigate them. We analyze cedures we have employed to manage these Ongoing commitment. We recognize that every signifi cant operation the Corporation risks, including the ExxonMobil-sponsored the scale and growth of unconventional undertakes through our Operations Integrity aboutnaturalgas.com website. resource development continues to prompt Management System (OIMS). Applying signifi cant questions among stakeholders. Key public policy issues. ExxonMobil OIMS requires us to identify potential safety, ExxonMobil has drilled nearly 900 uncon- chairs the American Petroleum Institute environmental, and social impacts and to ventional resource wells this year, and we working group that has developed four implement procedures and processes to are one of many operators bringing this recommended practice documents encom- mitigate risks. XTO Energy Inc. (XTO), a resource to market. We will continue to take passing the life cycle of unconventional recently acquired subsidiary of ExxonMobil, a leadership role in working collaboratively resource development. In the United States, will fully implement OIMS, and is carrying out with communities, regulators, and indus- we work with state governments and multi- a risk-based, focused, and deliberate execu- try associations to manage operational state entities to address concerns, establish tion strategy. risk and address questions and concerns. effective regulatory frameworks, and ExxonMobil recognizes the importance of Effective risk management is one means of implement industry consensus on sound responsible operations in maintaining stake- addressing stakeholder concerns surround- management practices. holder support for this signifi cant resource. ing unconventional resource development. 2011 Corporate Citizenship Report 15 implementing a Biodiversity Strategy to meet the project’s defi ned biodiversity objectives. Part of the Biodiversity Strategy involves the implementation of biodiversity offsets. In collaboration with Conservation International, a nonprofi t organization with expertise in environmental and conservation practices, and in consultation with local organizations and experts, we are developing recommen- dations for implementing a Biodiversity Offset Delivery Plan. Through this plan, we will seek to conserve land in particularly sensitive loca- tions to safeguard and promote stewardship of local biodiversity. The PNG LNG project is in the construction phase, and will eventually include gas production and processing facili- In Slagen, Norway, two scientists assess biodiversity in the area surrounding the facility during a biological ties, liquefaction and storage facilities, and characterization study. Understanding the local biodiversity of an area helps us to manage our operations nearly 700 kilometers of connecting pipelines. and develop and implement protection measures. Offsets will generally consist of conservation programs implemented by a local community We seek to engage NGOs on conservation and about 85 percent of water use on-site and will involve various Papua New Guinea projects in key countries and near operat- is treated, recycled water produced with nongovernmental organizations (NGOs) and ing sites, particularly to partner with them to heavy oil. the government. implement specifi c programs with measur- In 2011, we used the World Business Council By the end of 2011, we had more than able, scientifi c results. In 2011, ExxonMobil for Sustainable Development’s (WBCSD) 2700 hectares of land being actively managed contributed more than $2 million to organiza- global water tool to identify regions where for the benefi t of wildlife at 18 ExxonMobil tions dedicated to biodiversity protection and we operate that may have water scarcity sites, compared with 140 hectares in 2009. land conservation. We also support organiza- concerns. Information on water stress and Protecting and enhancing wildlife habitat tions focused on improving the quality and scarcity in the vicinity of our operations on our properties is a strategic element of quantity of species data, such as the United serves as an important part of risk manage- our broader corporate biodiversity manage- Nations World Conservation Monitoring ment. Of our 115 major operating sites, we ment approach. ExxonMobil is proud to be Centre, so that we can enhance our environ- identifi ed about 25 percent operating in a charter member of the Wildlife Habitat mental planning and protection efforts. regions that may have some degree of water Council (WHC) since its establishment in stress or scarcity. These areas are located in 1988 and we partner with the WHC to certify Freshwater management 15 countries. ExxonMobil locations for conservation. We The oil and gas industry requires water, have identifi ed several sites for WHC certi- including freshwater, in its operations. We In 2011, our upstream companies introduced fi cation in 2012, including many outside the use water in the extraction, processing and a process to enhance water management. United States. This past year, we established refi ning of hydrocarbons, and for cooling Since then, the quantity and quality of water a WHC Site Coordinators working group associated with electricity generation at our use data have been signifi cantly improved to share knowledge on program sustain- facilities. As part of our project planning, and a water footprinting strategy has been ment activities, local relationships, and site we assess the impact of our activities on instituted to better analyze our interac- certifi cations. The active participation and water availability and demand. We use a wide tions with local water resources. In 2012, engagement of our employees is instrumental range of approaches to reduce water use and our major sites plan to review their water in the success of our on-site wildlife habitat preserve water quality through on-site recy- consumption rates to identify opportunities conservation efforts. For example, employees cling and water reuse, purchasing treated for responsible use. Those sites located in at our ExxonMobil Chemical global head- wastewater for use as process water, employ- scarce or stressed regions plan to update quarters in Houston, Texas, a certifi ed Wildlife ing processes to decrease water needs, and their Environmental Business Plans to ensure Habitat site since 2010, learned of owls appropriately treating wastewater streams effective water resource management. threatened by record droughts in the area. prior to their discharge. There are a variety of projects in progress to A volunteer team coordinated with the Wildlife reduce water consumption. Our King Ranch Center of Texas to build an enclosure on the In 2011, the net freshwater consumption Gas Plant in Texas is planning a water recy- 14-hectare property and reintroduce owls at our operations was 2342 million barrels, cling system using reverse osmosis to treat into the environment. So far, 11 owls have representing a 9 percent increase from 2010. water for on-site reuse. This will signifi cantly been successfully rescued, tagged for future We actively manage our water consumption reduce water use and almost completely monitoring, and released. and seek opportunities to reduce, reuse, and recycle water in our operations. For eliminate liquid effl uent from the plant. In Shanghai, 84 ExxonMobil volunteers have example, our Torrance, California, refi nery We believe engaging our peers on water helped to re-establish local wetlands. Since purchases and uses recycled wastewater management issues can improve overall 2010, they have contributed more than from a local municipal treatment plant for petroleum industry performance. In 2011, we 1300 hours during their weekends and holi- cooling tower makeup and boiler feed water, helped develop the Global Environmental days to help support this key ecosystem. representing nearly 70 percent of total water Management Initiative Local Water Tool, Part of this effort involves training other local consumption at this facility. In our heavy oil which allows sites to identify and rank risks volunteers and students on the importance of operations at Cold Lake, Canada, we use a associated with the availability and reliability preserving wetland ecology and biodiversity. variety of water-use-reduction measures, of water sources and wastewater discharge 16 exxonmobil.com
points. We piloted the tool at four of our sites XTO is already benefi ting from the implementa- Regional Water Availability1 and anticipate using the fi nal version in 2012. tion of OIMS and incorporation of ExxonMobil’s Sites located Sites located Pilot sites found the tool useful in identifying best practices in environmental manage- in areas with in areas with some degree no degree of potential risks, which we plan to address using ment. The total volume spilled by XTO was of water stress water stress management tools such as Environmental 58 percent lower in 2011 compared to 2010. or scarcity or scarcity Business Plans. We also supported efforts 25% 75% In 2011, we continued our implementation of to customize a version of the WBCSD global the downstream Global Human Factors Best water tool specifi cally for the oil and gas Practice Guide in order to instill a zero-spill industry in collaboration with the International mindset across ExxonMobil. The Guide out- Petroleum Industry Environmental Conser- lines 17 high-risk elements and corresponding vation Association (IPIECA). procedures to reduce the likelihood of a 1Results based on an assessment of our 115 major operating sites human-caused spill. This initiative is helping using the WBCSD’s global water tool. Spill performance us effectively address refi nery spills caused The BP Deepwater Horizon incident in 2010 by human factors, which are down more than reaffi rmed the importance of continually 40 percent over the past four years. We are Other Spills (Not from Marine Vessels) developing and improving risk manage- also using a specialized risk tool to identify Number of oil, chemical, and drilling fluid spills ment, operations integrity, spill prevention infrastructure in need of upgrades to help us greater than 1 barrel processes, and containment capabilities. further avoid spills. We are focusing in 2012 on Spills to water Spills to soil Our own spill prevention programs seek to improvement measures at those refi ning sites 07 253 strengthen procedures, build in layers of with the highest spill rates. protection, inspect and maintain equipment, 08 211 Marine vessel spill performance. train operators, and conduct tests and drills. During 2011, vessels owned and operated by 09 242 Unfortunately, in 2011, we did not meet ExxonMobil’s marine affi liates surpassed 10 210 our expectation of continued improvement more than fi ve years without any spills to water regarding spill performance. A pipeline 11 484 greater than 1 barrel. There were no spills breach in Montana resulted in an estimated from long-term chartered ships in 2011. This 1509 barrels of oil being released into the marine fl eet of more than 650 vessels in daily Yellowstone River (page 28). This incident service logged 25,000 voyages in 2011 and brought the total volume of hydrocarbons safely transported more than 1.8 billion barrels spilled to land or water in 2011 to about of crude oil and refi ned products globally. 18 thousand barrels, with nearly 75 percent Technological innovation in oil spill response. recovered at the site of the spill. The number of nonmarine hydrocarbon spills greater The fi rst component of protecting the than 1 barrel in 2011 was 73 percent higher environment during offshore production is than in 2007 and 108 percent higher than 2010. preventing spills from happening. In order to be prepared in case a spill occurs, we are working to make effi cient containment equipment and dispersants readily available.
PROTECTING WESTERN GRAY WHALES
Working in close cooperation with Russian and our own research fi ndings. These scientifi c institutes affi liated with the Russian studies provide information about the level Academy of Sciences, our scientists have of noise produced by shoreline or offshore researched western gray whales since 1997. operations, and the potential of that noise This successful research and monitoring to propagate into feeding areas. These program has provided improved under- levels are compared with published thresh- standing of the ecology of the population. olds, and we take appropriate actions to During the course of research, western minimize disturbances to the whales. When gray whales in the vicinity of Sakhalin Island we conduct work offshore, we also employ have been monitored, photographed, and experts to observe the whales; protocols catalogued. are in place to modify or suspend work if these experts determine that the whales are The important summer feeding grounds potentially at risk from our activities. These for these endangered marine mammals are efforts, combined with scientifi c knowledge along the northeastern shore of Russia’s of the individual animals and population Sakhalin Island, near where we operate an monitoring, have demonstrated that this offshore production platform and plan to fragile population continues to grow. In install a second in 2012. To safeguard the 2000, there were around 100 whales; today whales’ feeding grounds, we follow strict there are more than 130. criteria based both on published science 2011 Corporate Citizenship Report 17
ExxonMobil has partnered with several For example, at our chemical plant in Notre Air Emissions companies to form the nonprofi t Marine Well Dame de Gravenchon, France, we optimized (millions of metric tons) Containment Company (MWCC) to develop a our processes and reduced VOC emissions by VOCs SO2 NOx rapid-response oil spill containment system approximately 150 metric tons per year. for the Gulf of Mexico. The system involves a 07 0.31 ExxonMobil is co-sponsoring an inter- more than $1 billion combined commitment 08 0.25 disciplinary fi ve-year research program, on behalf of the member companies and 09 0.22 coordinated by the Health Effects Institute, provides pre-engineered, constructed, and 10 0.22 focused on determining which particulate 11 0.23 tested containment technology and equip- constituents have the most signifi cant health ment deployable within 24 hours of a spill 07 0.21 impacts. Research fi ndings will be used to in the Gulf. A team of marine, subsea, and 08 0.19 develop more cost-effective emission control construction engineers led by ExxonMobil 09 0.16 strategies targeting those particles with the is designing and constructing expanded 10 0.14 highest public health concern. Results from system components that will enhance current 11 0.13 individual sub-studies will be released in containment capabilities. This specially 2012, with a fi nal report of the overall results 07 0.16 designed subsea containment equipment will expected in 2013. We plan to monitor and 08 0.15 be usable at depths of up to 10,000 feet and 09 0.13 evaluate the results as they become available. is designed to capture up to 100 thousand 10 0.12 Greenhouse gas emissions and fl aring are barrels of oil per day. The captured oil will 11 0.14 discussed in the Managing Climate Change be sent to vessels that can safely process, Risks section of this report (see page 22). store, and offl oad it. Waste management. Our fi rst waste manage- To enhance spill response capabilities, ment priority is to minimize its generation, ExxonMobil’s researchers have recently then to reuse or recycle it wherever possible. developed a new dispersant gel, capable of In 2011, ExxonMobil and its wholly owned treating oil with two-thirds less dispersant subsidiary SeaRiver Maritime sold the S/R than other formulas. We expect this product Wilmington to a U.S. ship-recycling facility to be ready for commercial sale by the end for dismantling that will maximize material of 2012. Globally, we are engaged in efforts recovery and ensure the proper handling and through the International Association of Oil disposal of materials. The watchdog organiza- and Gas Producers and IPIECA to improve tion Basel Action Network lauded our action industry capability in this area. to recycle the Wilmington. Emissions and waste In 2011, we disposed of 1.9 million metric tons We continue to seek opportunities to reduce of hazardous waste from our ongoing opera- the environmental impacts from our opera- tions. Of this amount, 1.7 million metric tons tions by reducing air emissions and the was produced water, which is classifi ed as a generation of waste. hazardous waste by only one local authority. Excluding produced water brought to the Air emissions. In 2011, our combined surface during oil and gas production, we emissions of volatile organic compounds reused or recycled about 50 percent of the (VOCs), sulfur dioxide (SO2), and nitrogen hazardous waste generated by our opera- oxides (NOx) increased by 5 percent from tions. Where appropriate, produced water 2010 but decreased 26 percent from 2007 may be re-injected using deep disposal wells levels. By year-end 2011, our U.S. refi ning or discharged offshore after having fi rst been facilities reduced combined NOx and SO2 treated to remove residual oil. Our Tulare, emissions by more than 35 percent from California, facility is building a system to 2000 levels. Since 2007, our global chemical fi lter and soften produced water for reuse as operations have reduced VOC emissions by feed water to a steam generator. Much of our 25 percent and NOx emissions by 8 percent. reported hazardous waste from remediation
ARCTIC OFFSHORE DRILLING AND EXPLORATION
During 2011, we entered into an agreement recognizing that much of its endowment is established by nine oil and gas companies with the Russian oil company Rosneft to relatively unexplored or located in challeng- with more than $20 million in initial research jointly explore for and produce oil in Russia, ing environments. As we identify possible on key safety, health, and environment topics the United States, and other parts of the projects with Rosneft, we will apply our nearly such as oil spill prevention and response world. During the past 15 years, we have part- 90 years of technical expertise in the Arctic in ice and Arctic environments. Together, nered with Rosneft in the implementation of to protect the Russian North’s fragile environ- ExxonMobil and Rosneft will also establish our Sakhalin-1 project, producing hundreds ment and sensitive ecology. For example, the Arctic Research and Design Center for of millions of barrels of oil for export to world ExxonMobil is maintaining a leadership Offshore Development, with a mandate to markets. Russia offers promising prospects role in the Arctic Response Technology— develop new technologies to enable oil and for new oil and natural gas discoveries, Joint Industry Program. The program was gas exploration and production in the Arctic. 18 exxonmobil.com
ENVIRONMENTAL, SOCIOECONOMIC, AND HEALTH IMPACT ASSESSMENTS (ESHIAs)
At ExxonMobil, risk management shapes require signifi cant fi eld time. Socioeconomic instituting a “no hiring at the gate” policy to our business and investment decisions. This analyses include indigenous peoples inhibit in-migration in the vicinity of worksites includes evaluating and managing the risks considerations (if applicable), demo- and facilities, and breaking apart large goods and opportunities related to social, health, graphic evaluations, way of life analyses, and services procurement contracts so that environmental, economic, and cultural matters. and cultural heritage determinations. The local suppliers are better able to compete. When starting major upstream projects, we results of an ESHIA inform our project-based In Alaska, we adjusted our project plans in conduct an ESHIA to identify key risks that decision-making, allowing us to develop consideration of local traditions, including could be encountered throughout the asset execution plans to better manage key modifying lighting on the pads to reduce life cycle and develop strategies to appropri- environmental, socioeconomic, and health visibility, texturing and coating the pipe- ately manage these risks. ESHIAs are on the risks. We document, monitor, evaluate, and lines to mitigate glare, rounding corners critical path of most project schedules since plan implementation through the life cycle of on gravel pads to reduce their impact on their submission and approval are often tied a project to determine the effectiveness of caribou movement, and building pipelines to the issuance of major permits or approvals. risk management approaches coupled with at a minimum of 2 meters above the tundra ESHIAs are an extensive analysis and require continuous improvement feedback loops. to allow caribou and hunters to pass. We thorough observation of natural and social We apply an “avoid, mitigate, compensate” also designed the export pipeline and gath- environments, often over many seasons. strategy to address potential risks identifi ed ering lines to withstand accidental bullet We typically contract independent consulting through an ESHIA. Our goal is to manage strikes from subsistence coastal hunting. fi rms to conduct ESHIAs on our behalf, which risks to a level as low as practicable. This In some situations, compensation may be the provides an important impartial perspective hierarchical approach ensures that we fi rst most practical solution. We offer monetary and and helps foster credible and productive consider modifying aspects of the project other types of compensation to account for the relationships with external stakeholders. design or execution plan to avoid an impact. project-related loss of a resource, attribute, or For example, in response to an ESHIA con- A key aspect of conducting an ESHIA possession. For more information please see ducted for an Arctic development project, involves engaging directly with affected com- our Human Rights and Managing Community we timed the shipping of various pieces munities, relevant governmental agencies, Impacts section (page 44). Since 2007, of equipment to the work site to avoid the international organizations, and local NGOs ExxonMobil has undertaken or participated in traditional whale-hunting period of the local in order to solicit feedback on a project and nearly 100 ESHIAs for projects and activities indigenous people. For another project in gain information that can be used to improve around the world, ranging from single well northern Canada, we re-routed a roadway to the project or its execution. As part of the exploration drilling programs and new technol- avoid disrupting a natural topographic feature process, stakeholders are given the oppor- ogy evaluation pilots to large development that has signifi cant cultural importance to tunity to review and comment on ESHIA mega-projects. Conducting ESHIAs is the local indigenous people. Examples of drafts. Detailed literature surveys, scientifi c integral to successful project execution and mitigation include instituting erosion control studies, technical evaluations, and socio- to developing long-term, positive relationships measures on pipeline easements, employ- economic analyses are key activities that in the communities where we operate. ing prudent waste management procedures,
ENVIRONMENTAL AND RISK WARRANTS ATTENTION SOCIAL MANAGEMENT Identify Evaluate Conduct PROCESS Environmental and the Environmental, an Environmental and When beginning major projects, Social Aspects Social, and Regulatory Social Risk we undertake an ESHIA, starting Setting Assessment with identifying aspects—such as roads, pipelines, or equip- ment—that could interact with the natural and social envi- ronment, conducting a risk assessment, and developing strategies to avoid or manage those risks. Conducting an Apply Monitor/Evaluate Manage Risks ESHIA is one key activity in this Adaptive Management iterative process, which contin- ues throughout the life cycle of Continuous Avoid an asset. improvement and evaluation Mitigate of changes. Compensate
LOWER RISK 2011 Corporate Citizenship Report 19 activities is actually recovered soil and materials. In 2011, these remediation activities generated approximately 1.3 million metric tons of hazardous waste.
Compliance record. Our worldwide environ- mental expenditures in 2011 totaled about $4.9 billion. This included about $1.6 billion in capital expenditures and about $3.3 billion in operating expenses. In 2011, 65 fi nes and settlements were paid, and these accounted for 0.03 percent of total environmental expenditures, or about $1.3 million. During 2011, ExxonMobil was involved in litigation in Maryland related to an accidental underground leak at one of our company-owned, dealer- operated gasoline stations. The company has At the former VCC site in Charleston, South Carolina, EMES employees Bruce Frink, Robert Jackmore, and paid $50 million in cleanup costs and in 2008 contractor Bill Anckner discuss details of the remediation activities with Ken Mallary from the EPA. Working paid $4 million in environmental penalties. collaboratively with the regulatory authorities helps us effi ciently manage our remediation projects.
Site remediation Early and continued engagement with investigation or developed action plans for Reducing our overall environmental impact local communities and regulatory authori- the majority of the VCC properties. While our hinges on the ability to effi ciently remedi- ties is an EMES basic practice. Due to a remediation activities do not alter the current ate and reclaim sites. We use a consistent series of historical mergers and acquisi- use of the properties, the remediated sites approach that leverages ExxonMobil’s tions, ExxonMobil’s affi liate, ExxonMobil Oil can have a variety of end-use applications. remediation best practices globally. Corporation, inherited the responsibility for In Germany, ExxonMobil performed a reme- certain operations of the Virginia Carolina The ExxonMobil Environmental Services diation assessment at an 18-hectare former Chemical Corporation (VCC), and is working (EMES) functional organization remediates manufacturing site along the Elbe River in cooperatively with the U.S. Environmental contaminated soil and groundwater at operat- the city of Wedel. Operations at the site Protection Agency (EPA) to remediate a ing facilities, inactive properties, and formerly dated back to the early 1900s. The City was number of former VCC properties pursuant owned sites. EMES works to enhance asset interested in integrating the property into part to U.S. environmental laws. The EPA initially and community value and also supports new of its strategic planning. We negotiated and identifi ed 24 properties requiring investiga- business development, while creating oppor- agreed that the City of Wedel could purchase tion and possible remediation due to elevated tunities for reuse of inactive properties. the property. This mutually benefi cial solution levels of lead and arsenic, but we proactively In 2011, EMES stewarded approximately allowed for the productive use of the property assessed additional VCC properties for con- 9500 active site remediation projects world- for the good of the local economy. tamination, expanding the targeted site list to wide. We devoted more than 5.2 million 38 properties. Working in cooperation with Land conservation. Through the application work hours to remediation and reclamation the EPA and state regulators, we have already of natural land management strategies and activities, including the disposition of approxi- remediated approximately 55 hectares, proactive stakeholder engagement, EMES mately 405 hectares for benefi cial reuse. or about 62 percent, and have completed continues to conserve inactive properties. In Fredericksburg, Virginia, we success- fully implemented a voluntary conservation
STAKEHOLDER ENGAGEMENT easement on a portion of surplus property along the Rappahannock River. Working with Collaborating on remediation best practices the Northern Virginia Conservation Trust, a member of the Land Trust Alliance (LTA), In 2011, the EPA honored ExxonMobil with an invitation to present its VCC site remediation conservation values—including enhance- program at the agency’s Community Involvement Training Conference. The workshop is ment of the water quality of the river and the held every other year to identify best practices in engaging communities about environ- Chesapeake Bay—will be preserved and mental issues. Our approach consisted of meeting directly with property owners and protected for the long term. On Long Island, conducting town hall meetings. We also worked on projects to improve common space New York, ExxonMobil continues to advance areas like playgrounds for neighborhood children. the preservation of coastal habitat within “The VCC projects have enhanced ExxonMobil’s relationship with the EPA. It’s apparent the boundaries of two former fuel storage from the start of each project that we have a mutual understanding not only of our remedia- terminal sites whose operations date back tion goals, but also of our objectives when engaging with the various communities.” to the early 1900s. In cooperation with local -Lauren Gordon, EMES Project Manager conservation organizations, we are making progress toward land conservation of these “The success of the VCC projects stems from the cooperation between EPA and ExxonMobil. ecologically valuable properties. Our close collaboration enabled us to approach each site uniquely, identify the needs of the community, and address any concerns residents had about the remediation work.” Explore enhanced web content at -Stephanie Yvette Brown, EPA Region 4 exxonmobil.com/citizenship 20 exxonmobil.com
CASE STUDY
Technology
Technological advancements allow ExxonMobil to drive continuous improvement in mitigating the environmental and safety risks associated with energy development.
ExxonMobil’s commitment to invest in technol- could provide the Corporation a competitive Defi ning our approach: ogy enables us to develop innovative solutions advantage or support its license to operate, discovery, development, to improve safety, minimize environmental the team can elect to evaluate or progress impact, and maximize resource value. We have the technology in a functional R&D program. and deployment invested approximately $8 billion in research ExxonMobil conducts cutting-edge R&D In addition to corporate-level research, and development (R&D) during the past 10 through in-house efforts, via partner- functional technology groups support each years, and almost $2 billion on technologies ships with other industries, and by funding of the business lines in guiding their technol- related to safety and the environment. Our academic and other nongovernmental ogy investment. For example, ExxonMobil’s process for evaluating technology for devel- research projects. As a technology moves upstream research affi liate ExxonMobil opment and commercialization is guided by from concept to research and application, Research Qatar (EMRQ) is developing a the business lines’ long-term commitment ExxonMobil applies a consistent manage- remote gas detection system that pairs to continuous improvement in operations ment approach. infrared camera technology with a sophisti- integrity as formalized in our Operations cated algorithm that detects hydrocarbons. In 2007, we started applying a white paper Integrity Management System (OIMS) and When deployed, remote gas detection ( 1 ) process to explore emerging technologies. by the opportunity technology presents to will improve process safety and reduce These studies help to educate the company lower energy use, maximize resource value, hydrocarbon emissions by identifying leaks on emerging technologies, defi ne our poten- enhance our product offering, and contribute quickly and automatically. tial contribution to the science, and assess to competitive advantage. the future applicability of the technologies Downstream Research & Engineering con- to our businesses. The Corporation has tinually works on process enhancements Strategic technology engaged experts from a variety of disciplines to reduce fl aring and associated emis- development within functional research labs to write white sions. We also invest in new technologies papers on topics ranging from biofuels to At the core of our business are several key to improve energy effi ciency. For example, nanotechnology. In the course of develop- research organizations that work collab- the Chemical business explores novel ing these papers, EMEST may determine oratively on new technologies. ExxonMobil materials and catalysts to improve energy a particular technology warrants future recently established a corporate-level effi ciency. By using a new compound in the Emerging Energy Sources and Technologies investment. Recently, the team’s fi ndings synthesis of butyl rubber ( 2 ), which takes on photovoltaics ( 3 ) informed the updated team (EMEST), tasked with evaluating place at very cold temperatures, Chemical Outlook for Energy. technologies either over long time hori- Technology scientists raised the tempera- zons, or in fi elds outside the company’s ture at which the manufacturing process The standard process for technology near-term business focus. Once EMEST occurs—leading to considerable energy investment requires assessing technical fea- determines that a technology is scalable effi ciency improvements. sibility through R&D. ExxonMobil’s research from an energy supply-demand perspec- functions follow a stage-gate research tive, fi ts with ExxonMobil competencies, and
STRATEGIC TECHNOLOGY DEVELOPMENT ACROSS EXXONMOBIL ENHANCING SAFETY TRAINING
EMRQ is developing virtual reality tech- Gate 1: Gate 2: Gate 3: Gate 4: Develop Partner Apply Deploy nology using sophisticated computer and video-based components to train our 3 1 4 2 Photovoltaics Remote CFZ™ Butyl plant, terminal, and marine operators. Gas Rubber Using this immersive 3D training environ- Detection...... Processing ment, individuals working in Qatar’s oil ...... and gas industry will be able to simulate ...... Business actual work scenarios ranging from routine ...... Lines ...... operations to emergency response, ...... using detailed models of their facilities. Functional The training platform can be connected Labs to other 3D display units so that multiple INTENSITY OF EFFORT Corporate Strategic fi eld operators can train together on the Research same simulation exercise. This element STAGE of realism makes training more effective, Discovery Development Deployment helping personnel perform jobs more safely. 2011 Corporate Citizenship Report 21
management system to progress technolo- enhanced oil recovery. CFZ™ technology gies from the early stages of innovation will require further evaluation before full through the fi nal stages of deployment. commercialization and deployment might Researchers partner with the business be possible. lines to determine the business benefi t of a technology, establish research and Technical and commercial development goals and timelines, steward feasibility independent project reviews, and authorize project funding. While many of our technology investments lead to deployment, there are no guaranteed Time horizons for these projects vary sig- outcomes. Even a technology that faces nifi cantly. For example, we began evaluating barriers to deployment can provide valuable remote gas detection in 2007. Researchers insights to business decisions. After years at EMRQ determined its technical feasibil- of research and practice, we have learned ity in 2010. In 2011, EMRQ partnered with that carbon capture and storage (CCS) is Louisiana State University Fire School to technically feasible, especially when applied conduct fi eld testing. Based upon adjust- to enhanced oil and natural gas production. ments made after fi eld tests, we anticipate CCS involves capturing, transporting, and the technology to be ready for commercial storing CO2 in underground geologic forma- Research team is investigating materials application in 2012, with potential deploy- tions such as saline or depleted oil and gas and systems that could bring the cost down. ment in 2013. reservoirs. We have successfully captured We believe applying our experience in CCS for enhanced oil and natural gas production Breakthrough technologies can take much and sold up to 7 million metric tons of CO2 could lead to competitive, market-based longer to develop. More than 20 years ago, per year extracted from natural gas streams solutions that include natural gas-fi red an ExxonMobil researcher hypothesized in Wyoming for enhanced oil recovery since 1986. Through widespread application on power plants. Even so, we do not anticipate that freezing the carbon dioxide (CO2) that CCS becoming broadly applicable over the is sometimes produced from underground fi xed sources, such as power plants, the next few decades. natural gas reservoirs could be a more effi - technologies involved in CCS could be cient approach to separation. ExxonMobil an integral part of achieving global goals Upstream Research Company is currently regarding climate change over the next ™ ™ century. However, the high cost associated testing the Controlled Freeze Zone (CFZ , 4 ) LIFE CYCLE ASSESSMENTS technology at our LaBarge, Wyoming, gas with capturing CO2 from fl ue gas currently makes CCS uneconomical for power plants facility. There, a tower freezes and separates Identifying whether a technology can where the largest CO2 reduction potential CO2 from natural gas into a high-pressure result in an environmental improvement exists. ExxonMobil’s Corporate Strategic stream, ideal for use in sequestration or in over an existing process can be chal- lenging, especially in the energy sector. ExxonMobil has established a cross- STAKEHOLDER ENGAGEMENT functional team to share best practices Collaborating with research institutions in life cycle assessments (LCAs) for our products and technologies. The objective The Global Energy Technology Strategy Program (GTSP) is a major project of the Joint of these in-house efforts is to develop Global Change Research Institute (JGCRI), a collaboration between the Pacifi c Northwest consistent comparisons of energy alter- National Laboratory and the University of Maryland. JGCRI is home to one of the world’s natives, as well as to build and extend the leading integrated human and biogeophysical earth system modeling programs. Through science of LCAs by working with leading the use of the JGCRI model, GTSP aims to enhance global decision-making by sharing academics and universities. open-source knowledge with public and private institutions. In 2011, we conducted an LCA to assess ExxonMobil is an active sponsor of GTSP, working collaboratively to assess opportuni- the impact of algae biofuel production on ties for technology in climate change mitigation. Haroon Kheshgi, a senior researcher at greenhouse gas (GHG) emissions, land ExxonMobil, interacts with GTSP regularly. “At ExxonMobil, we develop an Energy Outlook use, and water use. The study, com- that goes out 30 years. GTSP looks out over the next century. Looking out 100 years pleted in partnership with Massachusetts is, of course, subject to considerable uncertainty. Interacting with GTSP, we can better Institute of Technology and Synthetic understand, challenge, and improve our assumptions involved in projections over both Genomics Inc., showed that with further the next decades and the next century.” research and development, algae biofu- els could be produced with freshwater Jae Edmonds, chief scientist for the JCGRI and co-director of the GTSP, described the consumption equivalent to petroleum partnership’s dialogues: “ExxonMobil invited GTSP researchers down to Dallas, Texas, refi ning, and enable lower GHG emis- several times to meet with energy outlook analysts and exchange information on technol- sions. This study has been accepted for ogy in all parts of the energy system, ranging from power generation to transportation. publication in a peer-reviewed journal. We’ve had some very illuminating researcher interactions with ExxonMobil.” 22 exxonmobil.com
Managing Climate Change Risks
HIGHLIGHTS 120 12 % $440 megawatts of new improvement in energy million invested to improve cogeneration capacity effi ciency across our energy effi ciency, reduce added globally in 2011 worldwide chemical fl aring, and reduce GHG operations since 2002 emissions in 2011
PERFORMANCE OVERVIEW
What we said in 2010 What we did in 2011 What we plan to do Improve energy effi ciency by at least Improved energy effi ciency and Continue to improve energy effi ciency 10 percent between 2002 and 2012 across remained on track to achieve our 2012 by at least 10 percent between 2002 and our worldwide refi ning and chemical goal for refi ning and chemical operations 2012 across our worldwide refi ning and operations Started up a new cogeneration facility chemical operations Continue efforts to reduce upstream in the Netherlands Start up a cogeneration facility in hydrocarbon fl aring Included energy conservation criteria Singapore and continue to explore new Explore ways to integrate new tech- during the design phase of our Houston, cogeneration opportunities nologies to reduce greenhouse gas (GHG) Texas, campus Achieve Leadership in Energy and emissions from large oil and gas projects Environmental Design (LEED) Gold Start up new cogeneration facilities in building certifi cation at our Houston, Singapore and the Netherlands Texas, campus in 2014 2011 Corporate Citizenship Report 23
Global climate change remains an extraordinarily complex issue. Scientifi c evidence points to the fact that rising GHG emissions present risks to society and ecosystems—and that these risks warrant action by governments, companies, and citizens. Reducing GHG emissions while expanding energy supply is one of the greatest challenges facing our industry and modern society.
At ExxonMobil, our climate change risk 53 percent from 2007. Relative to our net Greenhouse Gas Emissions (Net) management strategy includes four primary direct GHG emissions, fl aring contributed Net equity, CO2-equivalent emissions elements: mitigating GHG emissions in our approximately 9 percent. Our operations in (millions of metric tons) operations, encouraging the responsible use Nigeria and Equatorial Guinea account for Upstream Downstream Chemical of our products, developing cutting-edge most of the fl ared gas, contributing about technology, and engaging in dialogue to 68 percent of our total upstream fl aring. We 08 126 promote effective public policy. continue to make infrastructure investments to 09 124 improve gas management in these countries. 10 125 Mitigating GHG emissions in Energy effi ciency. In 2011, energy used in 11 129 our operations our operations totaled 1.55 billion gigajoules. Technological innovation underpins ExxonMobil pursues a variety of projects to ExxonMobil’s approach to reducing GHG improve energy effi ciency. Since 2000, we Greenhouse Gas Emissions (Normalized) emissions. In particular, we focus on increas- have used our Global Energy Management Net equity, CO2-equivalent emissions ing energy effi ciency in the short term; System (GEMS) in the Downstream and (metric tons per 100 metric tons of throughput or production) implementing emission-reducing technologies Chemical business lines to methodically Upstream Downstream Chemical in the near and medium term; and develop- and rigorously identify and act on energy ing breakthrough technologies for the long savings opportunities. The GEMS equivalent 08 21.0 term (page 20). We are committed to fl are in the Upstream business is the Production 09 20.2 reduction, energy effi ciency, cogeneration of Operations Energy Management System 10 20.3 power and steam, and production effi ciency (POEMS). Implementation of GEMS and 11 20.7 POEMS is helping us meet our 10 percent improvements to reduce GHG emissions. 08 21.0 energy effi ciency improvement target and In 2011, we invested $440 million to improve 09 21.0 reduce upstream fl aring. 10 20.8 energy effi ciency, reduce fl aring, and reduce 11 20.4 GHG emissions. Through 2011, we improved energy effi ciency by approximately 9 percent in refi ning and 08 59.8 Greenhouse gas emissions in our operations. more than 12 percent in chemical manufac- 09 60.7 In 2011, ExxonMobil's net equity GHG turing since 2002. Combined chemical and 10 57.9 1 emissions were 129 million metric tons, refi ning operations have improved energy 11 57.1 excluding emissions from the production effi ciency two to three times faster than the of electricity and steam exported from our industry average. For an example of facility- operations to other users. Our indirect GHG level energy effi ciency improvements, please emissions from purchased electricity and see our Singapore site tour (page 48). steam were an estimated 14 million metric tons. Relative to our 2010 performance, this ExxonMobil recently announced plans to build represents an increase of about 4 million a new campus on a 155-hectare site just north metric tons, or 3 percent. of Houston, Texas. We carefully considered energy conservation during the design phase Flaring. During crude oil extraction, a blend of the campus and aim to achieve LEED Gold of hydrocarbon gases often accompanies building certifi cation. By optimizing daylight oil to the surface. In certain situations, we availability and incorporating other energy fl are this gas either as a safety measure or effi ciency measures, we expect to reduce our as a means of disposal when there are no energy demand in the offi ce buildings by more economic means of capturing and using it. than 40 percent compared to traditional offi ce To avoid fl aring, we need business environ- buildings, and 30 percent compared to the Bell ments with the right conditions, including Street ExxonMobil building in Houston. available markets, nearby infrastructure, and appropriate regulations. Unfortunately, many ExxonMobil’s Global Real Estate and of our remote upstream operations do not yet Facilities group has been working on an initia- meet these criteria. tive to reduce the environmental footprint of our offi ces. This includes analysis of energy, In 2011, our upstream fl aring averaged water, and waste across our facilities. We 405 million cubic feet per day, an increase are developing toolkits to help ExxonMobil of 16 percent from 2010 and a reduction of facilities understand and implement energy management programs. We are also
1Our calculations are based on the guidance provided in the Compendium of Greenhouse Gas Emission Estimation Methodologies for the Oil and Gas Industry (American Petroleum Institute) and the Petroleum Industry Guidelines for Reporting Greenhouse Gas Emissions (International Petroleum Industry Environmental Conservation Association). 24 exxonmobil.com
encouraging our facilities to record baseline We are progressing a number of technolo- Greenhouse Gas Reductions from ExxonMobil Actions1 energy performance data and metrics to drive gies to enable the commercial development
Net equity, CO2-equivalent emissions performance and measure success. During of in situ bitumen in our heavy oil fi elds in (millions of metric tons) 2009–2010, a contractor conducted energy Canada, where this resource lies too deep for Energy efficiency and cogeneration Flare reduction assessments at 21 of our international facili- surface mining. Current efforts are focused ties. They performed visual inspections and on the use of solvents to access undeveloped 08 7.5 reviewed operating procedures and utility resources and reduce GHGs, among other 09 9.6 bills for electricity, natural gas, and water. environmental and economic benefi ts. Sites received a list of potential improvement 10 12.3 ExxonMobil’s proprietary Controlled Freeze opportunities and determined which projects ZoneTM (CFZTM) technology freezes and 11 16.0 to pursue. separates CO2 from natural gas into a 1Cumulative since 2006. Cogeneration. ExxonMobil is developing high-pressure stream, ideal for use in seques- innovative ways to generate power more tration or in enhanced oil recovery. CFZTM Hydrocarbon Flaring from Upstream effi ciently and with less environmental impact technology could make carbon capture and Oil and Gas Production compared to purchasing electricity from storage more affordable and effi cient in (millions of metric tons) a local utility. Cogeneration captures heat reducing GHG emissions. This technology generated from the production of electricity continues to be developed for commercial 08 5.2 to use in production, refi ning, and chemical demonstration and subsequent application. 09 4.0 processing operations. With interests in more than 5000 megawatts of cogeneration capac- 10 3.2 Encouraging responsible ity globally, in 2011 we added 120 megawatts product use 11 3.7 of additional capacity from our new cogen- eration facility in the Netherlands. Another According to the International Energy Agency, new cogeneration facility in Singapore will approximately 90 percent of the GHG emis- come online in 2012, adding approximately sions generated by petroleum products are 220 megawatts. released when consumers use these products, and the remaining 10 percent are generated Developing cutting-edge by the operations to produce them. Electricity generation is the largest and fastest-growing technology source of global energy demand. Moreover, Our ability to develop breakthrough technol- much of the energy created to produce elec- ogy is paramount to our long-term business tricity is lost to ineffi ciency. For example, success. ExxonMobil currently has research a new electricity-generating turbine powered underway to more effi ciently and effectively by coal or nuclear material is, at most, about increase energy supplies, reduce emissions, 40 percent effi cient. That means that for every and improve operational effi ciency. For more 100 units of primary energy input, only information about our partnerships and in- 40 units or less are converted to usable house technology capabilities, please also electrical energy. New natural gas plants have see our technology case study (page 20). a 60-percent effi ciency rate. Improving fuel use effi ciency represents one of the biggest oppor- Supporting long-term scientifi c research. tunities for curbing growth in energy demand ExxonMobil supports long-term collaborative and CO2 emissions in the coming decades. scientifi c research related to GHG emis- sions. Since 2002, we have contributed more Improving product effi ciency. ExxonMobil than half of our $100 million commitment to works directly with industrial customers to Stanford’s Global Climate and Energy Project, design products aimed at improving energy which is focused on identifying breakthrough effi ciency. Our advanced lubricating oils and energy technologies. Many of the technologies greases can help increase fuel economy, are years away from widespread adoption, but contribute to longer lubricant life, and extend still hold promise. equipment life. To help achieve global vehicle fl eet transportation effi ciency improvements, In 2009, ExxonMobil announced our algae ExxonMobil is contributing to near- and long- biofuels research and development program. term advances in vehicle, fuel, and lubricant Since then, we have made progress toward technology. Some of our recent advances in identifying and developing strains of algae product energy effi ciency include: with desired characteristics. Algae-based biofuels could enhance the world’s transpor- • Mobil SHC Pegasus synthetic natural gas tation fuel supply while consuming carbon engine oil enhances performance in natural gas dioxide (CO2). We understand developing engines used for cogeneration and is one of such alternative technologies poses many the fi rst gas engine oils to offer fuel economy challenges, and overcoming them will require benefi ts; and, a considerable investment of time, money, • Mobil SHC 600, which we recently refor- and scientific expertise. mulated, is up to 3.6 percent more energy effi cient compared to conventional mineral oils in gear applications. 2011 Corporate Citizenship Report 25
Public policy debate Managing the risks associated with climate change requires the participation of govern- ment, consumers, and the private sector to develop and sustain effective technologies and policies that reduce the global carbon footprint.
ExxonMobil supports adopting strategies for reducing emissions that are stable, predict- able, long-term, simple, and transparent—and that encourage the greatest reduction in emissions at the least possible cost to society. When considering policy options, ExxonMobil advocates an approach that: • Ensures a uniform and predictable cost of carbon; ExxonMobil has research underway to more effi ciently increase energy supplies, reduce emissions, and improve • Lets market prices drive solutions; operational effi ciency. Above, an employee works at the CFZ™ technology demonstration plant in Wyoming. For more information about this breakthrough technology, please see page 20. • Maximizes transparency to stakeholders; • Reduces administrative complexity; We test a range of potential cost scenarios promote discussion on issues affecting our • Promotes global participation; and, for energy-related GHG emissions in our business, including climate change. We elect • Is easily adjusted to future developments in Outlook for Energy (see page 4). These to fund organizations whose research contrib- climate science and policy impacts. forecasts use a cost on CO2 emissions to utes constructively to the dialogue on effective If governments consider the adoption of regu- represent future climate policy options. policy and technology. We have ceased funding latory frameworks, we believe a well-designed, ExxonMobil anticipates Organization for groups we believe were addressing the public revenue-neutral carbon tax mechanism pro- Economic Cooperation and Development policy discussion by questioning the science of vides a cost-effective policy approach. When (OECD) CO2 costs reaching about $80 per climate change as opposed to exploring solu- combined with further advances in energy ton by 2040. At that time, we project China tions to this complicated challenge. will impose costs of $30 per ton, with many effi ciency and new technologies spurred by We publish our support of 501(c)(3) organi- Non-OECD nations approaching $20 per ton. market innovation, a carbon tax could play a zations on our website. In 2011, our climate- signifi cant role in reducing GHG emissions. We engage regularly with governmental related advocacy and research funding Mitigating global CO2 emissions will require advisory panels and related scientifi c bodies benefi ciaries included the Massachusetts participation from developed countries and around climate change issues. For example, Institute of Technology, Stanford University, the major developing economies in any policy in 2011, we contributed to the United States the Australian Bureau of Agricultural and response. We will continue to actively and National Petroleum Council report on energy Research Economics and Sciences, Battelle constructively participate in global policy resources and to the IHS CERA publication on Pacifi c Northwest Laboratory, the Lamont discussions. Sound Energy Policy for Europe, and we sub- Doherty Earth Observatory at Columbia Global engagement on climate change. In mitted testimony to parliamentary committees University, the Brookings Institution, the 2011, we discussed policy issues with govern- in the United Kingdom and Australia. During American Enterprise Institute, the Council ments and legislators around the world, 2011, ExxonMobil representatives continued to on Foreign Relations, Chatham House, including Australia, Canada, European Union speak on climate-related issues at events such Resources for the Future, and the Center for countries, Japan, Singapore, and the United as Net Impact, the International Petrochemical Strategic and International Studies. States. ExxonMobil was represented at the Conference, the World Petroleum Congress, United Nations Framework Convention on and the World Shale Gas Conference. Explore enhanced web content at exxonmobil.com/citizenship Climate Change meeting in Durban, South Funding of advocacy groups and research. Africa, as an observer, and our staff contin- ExxonMobil supports many public policy and ues to participate in the Intergovernmental academic organizations that research and Panel on Climate Change.
METHANE CAPTURE FROM MUNICIPAL LANDFILLS
In the fi rst ExxonMobil project of its kind, After two years of research and development This project was cost-effective and envi- we are tapping an East Baton Rouge Parish and $1.8 million in facility upgrades, the ronmentally benefi cial for the plant and municipal landfi ll as an energy source for our methane capture project eliminates the also generated a new revenue source for Louisiana polyolefi ns plant. The manufacture fl aring of landfi ll gas. We now treat and the city of Baton Rouge and East Baton of polyethylene and polypropylene at the transport that gas nearly 6.5 kilometers to Rouge Parish. The site was recognized with Baton Rouge facility requires steam histori- our plant to help fuel the boilers. Using this awards from both the American Chemical cally generated by three natural gas boilers. previously fl ared landfi ll gas as an energy Council and the Louisiana Department The landfi ll’s 6 million tons of decomposing source is equivalent to removing 59,000 cars of Environmental Quality for this effort. waste releases a gas composed of about from the road. ExxonMobil expects to purchase more 50 percent methane and 50 percent CO2. landfi ll gas as system capacity is added. 26 exxonmobil.com
Safety, Health, and the Workplace
HIGHLIGHTS 44% 4800 56 of management and attendees at global technical scholarships professional new hires contractor safety forums awarded and 1091 global in 2011 were women held in 33 countries internships and co-op during 2011 assignments sponsored
PERFORMANCE OVERVIEW
What we said in 2010 What we did in 2011 What we plan to do Learn from personnel and process Deployed recommendations from the Continue to learn from personnel and safety metrics for continuous improvement Personnel Safety Study process safety performance metrics to Deploy recommendations from the Implemented and evaluated OIMS help achieve our goal that Nobody Gets Personnel Safety Study enhancements Hurt Evaluate deployment of OIMS enhance- Started implementing OIMS at XTO Pilot workshops and launch OIMS ments at the assessable unit level Energy Inc. (XTO) Leadership Academies Conclude cross-industry efforts to Concluded cross-industry research work Enhance the safety, health, and work- understand precursors for serious injuries on serious injury and fatality prevention place systems at XTO and fatalities and develop effective Established a Steering Committee for Continue emphasis on “Actively Caring prevention strategies the Control of Infectious Diseases and Approaching Others” Expand the Culture of Health initiative Hired 2100 global professional Follow up on results of cross-industry across the United States employees, sponsored 1091 global research on serious injury and fatality Identify the best candidates for an internships and co-op assignments, prevention increasingly diverse workforce through and awarded 56 technical scholarships Continue to attract, develop, and retain practical work experience, scholarships, in the United States a premier workforce from the broadest and internships possible pool of talent 2011 Corporate Citizenship Report 27
The safety of our employees, contractors, and communities is the core of our commitment to operations integrity. We remain steadfast in our goal that Nobody Gets Hurt.
Safety, security, and health Personnel safety study. As a result of the management personnel safety study concluded in 2010, we are enhancing our leadership training Excellence in safety, security, and health in the through the development and piloting of new workplace is a core value for our company. OIMS Leadership Academies. We manage the risks associated with our operations through the implementation of our During 2011, we oriented global safety aware- Operations Integrity Management System ness efforts around “Actively Caring and (OIMS). Every ExxonMobil employee and Approaching Others”—an integral charac- teristic of an established and effective safety contractor accepts safety as a job requirement, The “Actively Caring and Approaching Others” whether working at a desk or on an oil platform. culture where all workers take ownership and focus stems from ExxonMobil’s desire to eliminate accountability for their own and each other’s all incidents and ensure Nobody Gets Hurt. Personnel safety personal safety. Workers are empowered and encouraged to ask questions or to comment While our safety performance remains strong in when another worker—whether peer or super- the industry, in 2011, our combined employee 1 visor—appears to be at risk. Workers also learn Lost-Time Incident Rate and contractor workforce lost-time incident per- (incidents per 200,000 work hours) how to constructively receive input from others, formance declined. This outcome reinforces our ExxonMobil employees ExxonMobil contractors knowing it is intended to keep them from harm. steadfast commitment to thoroughly investigate API U.S. petroleum industry employee benchmark the underlying causes of incidents and focus Contractor safety. From building pipelines to 0.38 relentlessly on effective risk management. working on offshore platforms, thousands of contractors support our operations every day. In 2011, XTO safety data were combined with At many of the projects that ExxonMobil data for the rest of ExxonMobil’s operations, manages, the majority of workers at the project which introduced a basis change. XTO is in site are contractors. When prequalifying 0.19 the process of implementing OIMS and is contractors, we evaluate safety performance committed to achieving solid safety perfor- as a key criterion (see case study, page 36). mance. It took ExxonMobil many years to In 2011, ExxonMobil Development Company develop its safety culture and to embed OIMS conducted a series of global contractor safety throughout its operations. We are confi dent 04 05 06 07 08 09 10 11 forums for approximately 4800 attendees in that XTO will continuously improve perfor- 33 countries. The main theme of this effort was mance as implementation proceeds. Safety Excellence through Visible Leadership 1 The safety performance of legacy ExxonMobil and each forum featured a series of presenta- Total Recordable Incident Rate (incidents per 200,000 work hours) assets (excluding those of XTO), through tions intended to help contractors consider year-end 2011, did not meet our expectations. new ways to lead with safety practices. ExxonMobil employees ExxonMobil contractors API U.S. petroleum industry employee benchmark As a result, we have increased emphasis on Planning is underway for another series of the prevention of serious incidents, which can contractor safety forums in 2012. 1. 2 lead to lost-time injuries and fatalities. We Process safety. Process safety is a frame- continue to set high expectations for safety work for managing the integrity of operating performance across our operations for all systems by applying good design principles, workers—contractors and employees. As engineering, and operating and maintenance 0.6 always, our goal is to provide and maintain practices. Effective process safety manage- a workplace where Nobody Gets Hurt. We ment prevents the uncontrolled release of know this is achievable, and will continue to hydrocarbons and other hazardous sub- work toward that standard. stances to avoid signifi cant incidents with 04 05 06 07 08 09 10 11 It is with deep regret that we report that potential for serious injuries and fatalities, nine workers were fatally injured in 2011 in widespread environmental impacts, and 1Incidents include injuries and illnesses. Safety data are based on information available at the time of publication. connection with ExxonMobil operations. property damage. Our approach focuses We thoroughly investigated each incident, on reducing risks and incidents through the determined root causes, and identifi ed steps fl awless execution of OIMS. We subscribe to to prevent similar events in the future. industry standards—the American Petroleum Institute’s Recommended Practice 754 During 2011, we began to apply learnings and International Association of Oil & Gas from cross-industry research efforts to study Producers No. 456—which defi ne process improved approaches for the prevention of safety events and use a process safety serious injuries and fatalities. Through these incident triangle to represent events from studies, ExxonMobil gained new insights into Tier 1 through Tier 4. more effective prevention strategies that focus on identifying underlying causes and expanding During 2011, we had 71 Tier 1 process safety data analysis associated with incidents and near- events. Incident analysis indicates that human misses that have potential serious outcomes. factors and procedures were the contributing 28 exxonmobil.com
element for nearly half of these events. Our System (PSIMS) applies common global PROCESS SAFETY TRIANGLE emphasis on process safety management processes and a global computer system to across the company remains constant, as capture and communicate information on the we investigate, analyze, and learn from these safe handling, transport, use, and disposal and lower severity Tier 2, 3, and 4 events and of our products. ExxonMobil Biomedical indicators. We focus on best practices in design, Sciences, Inc. (EMBSI) coordinates with each Tier 1 mechanical integrity, and upgrades using of our business lines to monitor, advise, and advanced technologies, and we train employees evaluate a growing number of new regulatory in process safety and effective procedures. requirements on our products.
Tier 2 EMBSI assesses human and environmental Product stewardship and hazards along with risks of our products and product safety their components, and develops hazard com- ExxonMobil works to minimize risks and munication documents. In addition, ExxonMobil Tier 3 impacts associated with the manufacture, toxicologists, industrial hygienists, epidemiolo- use, and disposal of our products. We con- gists, physicians, and environmental scientists sider product stewardship issues in all stages, work to continually improve our understanding including inception, design and development, of occupational and environmental health. Tier 4 manufacture and storage, transport and distri- Customer communication is a large part of bution, marketing, use, and disposal. product stewardship. During development As part of product stewardship, we assess and deployment, we identify hazard and risk Process safety events fall into two categories: safety, health, and environmental aspects management practices—including appropri- Tier 1 and Tier 2. Tier 3 represents process as well as compliance with product safety ate uses, potential health and environmental safety “near-misses” and Tier 4 represents legislation, both where our products are effects, personal protection and exposure leading performance measures, such as made and in their intended markets. OIMS controls, fi rst aid measures, and disposal on-time maintenance performance. The lower considerations—and communicate this tiers are measured and tracked to prevent and other management systems help ensure events in Tiers 1 and 2. compliance with product stewardship regula- information to customers via Safety Data tions in more than 150 countries. Our Product Sheets, product data sheets, labels, and Stewardship Information Management technical guidance. We tailor our product safety warnings to comply with local
EMERGENCY PREPAREDNESS AND RESPONSE
Effective emergency preparedness is depen- contractors, and specialists from at least four (EPA) and including representatives from dent on competent response teams. To countries, and lasted two days. During emer- the State of Montana, was established. develop and practice emergency response gency drills, participants run through realistic More than 1000 people were involved in strategies, we establish Emergency Support scenarios including real-time decisions and the response and cleanup effort includ- Groups comprising representatives from interaction with local authorities. The Sakhalin ing ExxonMobil’s North America Regional business lines; human resources; law; drill involved deploying several marine vessels Response Team, the Clean Harbors and safety, security, health, and environment; for a simulated spill cleanup, modeling the Emergency Responder oil spill response public affairs; and other technical advi- trajectory of the spill, and conducting simu- organizations, and additional contractors. sors. To respond quickly and effectively to lated dispersant application with helicopters. EMPCo worked closely with the EPA and operational incidents, we routinely test these For the purpose of simulation, workers trav- the Montana Department of Environmental trained teams on a range of possible sce- eled to the location of the drill as they would Quality (MDEQ) to ensure cleanup goals narios, including simulated product spills, in an actual situation. Several representatives and objectives were clearly defi ned, and fi res, explosions, natural disasters, and from various Russian regulatory authori- subsequently completed as outlined by security incidents. ties participated. The exercise confi rmed the Unifi ed Command. Work now contin- our readiness to respond and helped us Every site conducts emergency drills in ues under the direction of the MDEQ and identify improvements to the Sakhalin Oil Spill accordance with regulatory requirements has now transitioned into reclamation and Response Plan. and OIMS guidelines. These drills range remediation activity. This includes a com- from routine fi re drills to full-scale exercises. Response in action—Yellowstone River prehensive soil and water monitoring and We operate in some parts of the world in Montana. On July 1, 2011, ExxonMobil sampling program. without clear emergency response require- Pipeline Company (EMPCo) experienced a At the Laurel Crossing, EMPCo installed ments. In these cases, we apply global best breach in its Silvertip Pipeline resulting in the new pipeline approximately 60 feet below practices to determine the frequency of release of an estimated 1509 barrels of crude the river bottom. In addition, new pipeline emergency drills. Each year, we conduct at oil into Yellowstone River near Laurel, Montana. was installed 30 feet or more below the river least one comprehensive drill in each of our EMPCo immediately began implementing its bottom near the shore at the Rock Creek operating regions. emergency response plans, drawing upon and Clarks Fork crossings. Inside a comprehensive response drill. local resources at the ExxonMobil Billings EMPCo takes full responsibility for the We conducted a comprehensive drill at Refi nery as well as experts from across the incident and cleanup, and continues to work our Sakhalin, Russia, facility in September country. A Unifi ed Command Center, led by cooperatively with all agencies involved in 2011. The drill included 230 employees, the U.S. Environmental Protection Agency investigating the spill. 2011 Corporate Citizenship Report 29 regulations; where product safety regula- Employee health tions do not exist, we apply responsible SUPPORTING POLIO ERADICATION ExxonMobil provides support programs IN ANGOLA standards. In 2011, we distributed more than and services to help our employees live 300,000 Safety Data Sheets to customers in healthier lives. We consider workforce The World Health Organization has made more than 130 languages. and community health issues as part great strides toward eradicating polio; Life cycle assessments. ExxonMobil of our project planning, using tools like only a handful of countries still report Chemical Company follows the International Environmental, Socioeconomic, and Health active cases. In Angola, one of the biggest Organization for Standardization (ISO Impact Assessments (ESHIAs) (see page 18). barriers to achieving eradication is access 14040:2006 and 14044:2006) in develop- We develop prevention programs and health to remote areas. The Angolan Ministry of ing life cycle assessments (LCAs). Two LCA care services to respond to emerging health Health received a $600,000 grant from examples include the assessment of our issues in a timely manner. During 2011, we the Block 15 consortium operated by High Barrier Metallyte™ oriented polypropyl- established a new infectious disease com- Esso Angola to purchase four-wheel- ene fi lms (OPP) relative to aluminum foil, a mittee to monitor and address emerging drive vehicles, motorcycles, and vaccine product used for similar applications. It dis- disease-related issues. storage equipment for health offi cials and played lower energy consumption, reduced trained community health volunteers to Culture of Health. ExxonMobil’s Culture of waste, and lower greenhouse gas (GHG) vaccinate Angolans in isolated parts of the Health is our U.S. site-based health and well- emissions. Another example involves our country. Angola reported only fi ve cases ness program. It provides a broad, systematic metallocene polyethylene (mPE) resins used of polio in 2011. approach to health promotion activities in packaging construction products, such as in the workplace, including resources for To complement our polio vaccine support, mortar and cement mix, relative to paper. The ExxonMobil employees and family members we also provided a $1 million grant to the analysis showed that mPE resins have several to achieve personal health goals. After testing Ministry of Health’s vaccination program environmental advantages, including require- this program at two work sites, we expanded in four provinces. Implemented in partner- ments for fewer raw material inputs. the program to all U.S. sites in 2011. Culture ship with the Angolan Red Cross, more of Health offers a state-of-the-art health than 200,000 children under fi ve years STAKEHOLDER ENGAGEMENT portal with a wellness library, meal plan- of age are being vaccinated against nine Customer life cycle ners, and wellness and fi tness trackers. The life-threatening childhood diseases: polio, assessment program also includes on-site biometric diphtheria, tetanus, measles, whooping screenings, annual health assessments to cough, yellow fever, hepatitis, meningitis, One of our customers specializing in detect potential health risks, and telephone- and pneumonia. industrial packaging, NORDFOLIEN GmbH, based lifestyle coaching. More than 13,000 approached ExxonMobil for help on an LCA individuals participated in this program in to understand the environmental impact 2011. Worksite-based program components of polyethylene versus paper packaging. are being added throughout 2012. We developed a charter for the collabora- tion and agreed that ExxonMobil Chemical Malaria Control Program. Malaria costs the would conduct the analysis. An indepen- African continent an average of $12 billion dent third-party external panel reviewed the in lost gross domestic product annually and LCA for completeness and transparency. impacts household incomes through lost The results showed that polyethylene sacks productivity and healthcare expenditures. had signifi cant environmental benefi ts over The locations where we operate in Africa paper alternatives, as they are lighter, have and parts of Asia Pacifi c are no excep- lower energy and GHG profi les, and are tion. ExxonMobil’s comprehensive Malaria more durable, minimizing product loss. We Control Program covers both employees and plan to continue engaging with our custom- contractors working in malaria-prone areas. ers on other LCAs. It includes awareness campaigns, mosquito bite prevention tools, and anti-malaria medi- cation, and promotes early diagnosis and Workplace security treatment to fi ght malaria. Protecting worker and community safety We track employee and contractor incidences also means ensuring security and protec- of malaria in eight countries with upstream tion of information. Our security programs operations. In 2011, 11 malaria cases were are designed to meet the challenges of reported out of the thousands of nonimmune the diverse locations where we operate. workers located in or visiting endemic areas. At ExxonMobil, Security is Everybody’s To learn about our efforts to eradicate global Business. In 2011, we focused on enhanced malaria in the communities where we operate, security countermeasures for people, assets, see page 42. and information in higher-threat locations where ExxonMobil operates. We also con- StopAIDS. Our workplace HIV/AIDS program, tinued implementation of risk assessment StopAIDS, combines educational programs processes to identify and implement asset- with access to community-based care and specifi c security enhancements. For more treatment to keep healthy workers disease- information about security at ExxonMobil, free, and to educate HIV-positive workers on see page 45. 30 exxonmobil.com
living with the illness. ExxonMobil does not We also support diversity-based educa- 2011 Percent Female Management and Professional New Hires by test for HIV, and HIV status is not a factor in tion programs such as the Hispanic Heritage Geographic Region2 determining an employee’s ability to work. Foundation, National Society of Black Worldwide total Asia Pacific Latin America Engineers, Society of Women Engineers, Europe United States Society of Hispanic Professional Engineers, North America (excluding United States) Employment policies and Africa/Middle East practices and the National Action Council for Minorities in Engineering, among others. We believe these 44% ExxonMobil focuses on developing a diverse strategic investments in education will help workforce of highly talented individuals to help 52% build a global pool of talent in science, technol- our business thrive. We use a long-term, career- 43% ogy, engineering, and mathematics (STEM) oriented approach that begins with global 44% fi elds to support the further development of the recruitment of outstanding talent and continues 35% oil and gas industry. Without education today, 36% with development from within through a wide we cannot advance technological innovation to 42% range of assignments and experiences. help meet our future energy needs. Diversity. ExxonMobil conducts business in At the end of 2011, about 39 percent of our almost every part of the world. The diversity employees were located within the United Management and Professional New Hires2 of ideas, perspectives, skills, knowledge, and States and 61 percent internationally. In 2011, Percent women Percent outside the United States cultures across our company facilitates inno- approximately 34 percent of our executives vation and is a key competitive advantage. were non-U.S. employees. We hired more than 08 39% Through a range of programs, activities, and 09 38% 2100 management and professional employ- investments, we strive to create and maintain 10 40% ees worldwide, about 79 percent of whom a diverse workforce, representative of the 11 44% were outside the United States. many geographies where we do business. 08 69% We developed our Global Workforce Diversity ExxonMobil is committed to promoting 09 63% Framework to attract, grow, and retain a leadership opportunities for women glob- 10 70% premier workforce. A series of web-based ally and improving the gender balance within 11 79% trainings and tools help our employees under- our company. Currently, women account for 2Recruiting numbers for 2011 exclude XTO Energy Inc. stand effective cross-cultural communication about 26 percent of our worldwide workforce, and cultural sensitivities. excluding company-operated retail stores. In 2011, 44 percent of management and profes- We support local employee networks around sional new hires were women, signifi cantly the world to foster a work environment com- higher than the percentage of women in our mitted to diversity and inclusion. These include broader employee population. Approximately the Asian Connection for Excellence (ACE); 14 percent of executive employees worldwide Black Employee Success Team (BEST); Global are women. Our commitment to gender equal- Organization for the Advancement of Latinos ity extends to all aspects of the employment (GOAL); People for Respect, Inclusion, and relationship, including recruitment, hiring, pro- Diversity of Employees (PRIDE); and Women’s motion, transfer, termination, wage and salary Interest Network (WIN). These groups often administration, and selection for training. sponsor educational and community service programs for interested employees.
LEADERSHIP FRAMEWORK
Our business activities require leaders who Global Organization can effectively work in a complex global Leader environment. A deliberate and focused effort Global across our company ensures we identify and Global Leader mentor individuals, design challenging work Team Leader Forum Enhance assignments, support on-the-job experi- Advanced executive ences, and provide training and education. Business Leadership strategic Team Leader Program capability to The ExxonMobil Leadership Framework achieve global Formulate and functional includes three major components: fun- General execute global excellence Unit Leadership strategies, lead damental business principles, essential Team Leader Program change in multicultural Broaden personal qualities, and behaviors to achieve contexts Enterprise managerial premier business results. We embedded this Leadership perspectives Supervisor Program and leadership Framework within our business practices capability Balance the and our people development processes. Supervisor complexity of Program global teams in Employee Moving from a multicultural individual environment contributor to supervisor 2011 Corporate Citizenship Report 31
To increase the representation of minorities in our U.S. operations, our hiring programs include outreach to identify diverse candi- dates. Based on U.S. Equal Employment Opportunity Commission reporting, minori- ties made up approximately 28 percent of our U.S. workforce and about 18 percent of offi cials and managers in 2011.
Policies against discrimination and harass- ment. Our Standards of Business Conduct govern our employment practices. These standards support our commitment to equal employment opportunities, prohibit harass- ment and discrimination in the workplace, and align with applicable laws and regulations in the countries where we operate. Any form ExxonMobil conducts business in almost every part of the world. The diversity of ideas, perspectives, skills, of discrimination by or toward employees, knowledge, and cultures across our company facilitates innovation and is a key competitive advantage. contractors, suppliers, and customers in any ExxonMobil workplace is strictly prohibited. The funding levels of qualifi ed pension Our global, zero-tolerance policy applies to 2011 Percent Women and Minorities plans comply with applicable laws or regu- all forms of discrimination, including dis- by Position in the United States crimination based on sexual orientation and lations. Defi ned benefi t pension obligations Based on U.S. Equal Employment Opportunity Commission reporting gender identity. Harassment, even in its most are fully supported by the fi nancial strength of the Corporation or the respective spon- Officials and managers Professionals subtle forms, directly confl icts with company Total employees policy and will not be tolerated. All employees soring affi liate. are subject to disciplinary action, includ- Flexible work environment. Our workplace 18% 31% ing termination, for any act of harassment. fl exibility programs help us attract and retain 28% We employ a comprehensive education, talent, address individual employee needs, Women training, and stewardship program to ensure and maximize employee productivity. Each this policy is understood, implemented, and country’s workplace fl exibility programs differ 18% followed by our employees throughout our based on legal requirements, infrastructure, 23% worldwide operations. Each affi liate has and culture. Examples of employee programs 28% Minorities adopted ExxonMobil’s global standards with providing fl exibility include an adaptable modifi cations only as needed to comply with workplace, modifi ed work weeks, part-time country laws. regular employment, extended part-time employment, and adjustable work hours. 2011 Workforce by Geographic Region3 Employee benefi ts and programs. Exxon (thousands of employees) Mobil Corporation is committed to being the Performance review process. During world’s premier petroleum and petrochemical Africa/Middle East the annual performance assessment and 4.3 company. Our benefi ts programs are part of a development process, all employees have a Canada 6.8 total employment package and are designed structured, documented discussion with their to support our business objectives and be United Asia Pacific supervisors about work goals, training objec- States 16.1 responsive to the needs of employees through- tives, and development needs. This process 32.2 Total workforce out a career into retirement. They also support provides the basis for ongoing employee 82.2 ExxonMobil in attracting and retaining the most coaching and continuous performance qualifi ed employees. improvement. Employees are actively devel- oped throughout the course of their careers Latin America Europe Providing access to healthcare at an 4.9 17.9 with training, mentoring, and opportunities to affordable cost helps employees reduce dis- 3Data exclude company-operated retail store employees. tractions associated with healthcare issues, join professional networks. quality of care, and related fi nancial concerns, Employee engagement. ExxonMobil strives enabling the employee to remain productive to communicate openly with our more than and focused on job responsibilities. Strong 82,000 employees. In 2011, presidents of healthcare plans and health-related programs the functional companies held more than also reinforce the Corporation’s commitment 19 town-hall-style forums and numerous to safety and wellness. meetings with employees, addressing topics Benefi t coverage for spouses is based on ranging from safety performance to long- legally recognized spousal relationships in the term planning. We hold these forums across individual countries where we operate. In the our operations. Employees have the opportu- United States, we have adopted the defi ni- nity to ask senior management questions on tion of spouse used in federal law. Employees any topic during these sessions. in countries where national law recognizes same-sex relationships receive spousal ben- Explore enhanced web content at efi ts under ExxonMobil programs. exxonmobil.com/citizenship 32 exxonmobil.com
Corporate Governance
HIGHLIGHTS % 34 82 10 out of10 stakeholder dialogues of outstanding shares rating from Governance- or meetings with institutional represented at the Metrics International, and socially responsible or Corporation’s Annual Meeting among top 1 percent of sustainable investors companies rated
PERFORMANCE OVERVIEW
What we said in 2010 What we did in 2011 What we plan to do Include management proposals for Included management proposals for Continue to recruit highly qualifi ed shareholder advisory votes on executive shareholder advisory votes on executive non-employee directors compensation in the 2011 proxy statement compensation in the 2011 proxy statement Conduct Business Practices Reviews Continue recruiting highly qualifi ed Participated in 34 stakeholder dialogues for all employees non-employee directors or meetings with institutional and socially Continue outreach to investors, includ- Continue outreach to institutional and responsible or sustainable investors ing participation in Sustainable Investment socially responsible or sustainable inves- Performed extensive internal and third- Research Analyst Network (SIRAN) calls tors and other interested parties party audits covering global operations on topics such as oil sands development Reviewed annual safety, security, health, Review annual safety, security, health, and environmental performance with the and environmental performance with the Public Issues and Contributions Committee PICC of the Board of Directors (PICC) of the Board of Directors Host the PICC to visit operations Took the Board of Directors to visit in Wyoming Alberta, Canada, to review affi liated opera- tions, including the Kearl oil sands project 2011 Corporate Citizenship Report 33
Sound corporate governance requires clear expectations of high ethical standards and integrity in all business activities and investment decisions. ExxonMobil’s ethics and high standards of business conduct allow us to operate in an economic climate where large-scale investments support our long- term business and contribute to the communities where we operate.
Board of Directors Board or Board committee meetings, and all Affairs, and Compensation Committees and have authority to call special meetings of the are routinely reviewed at Board and Board Our Board of Directors provides independent independent directors. committee meetings. Only independent direc- oversight of the Corporation’s affairs. All direc- tors serve on these committees, which met tors stand for election at our Annual Meeting Board appointment process. Achieving a between four and seven times in 2011. of Shareholders. At year-end 2011, 10 of 11 Board of Directors that is diverse in gender, directors and all members of key Board com- race, geography, experiences, and fi elds of The entire Board is responsible for risk over- mittees, including the presiding director, were expertise is critical to successful business sight. The committees help the Board carry independent as defi ned by New York Stock in a globalized market. The Board Affairs out risk oversight by focusing on aspects Exchange (NYSE) guidelines. In 2011, the Board Committee nominates director candidates relevant to their committee. Each committee’s of Directors met 10 times, including a visit to in accordance with the Guidelines for the charter is available on our website. Alberta, Canada, to review affi liated operations. Selection of Non-Employee Directors. The Executive compensation and strategic committee looks for highly qualifi ed non- Board leadership structure. At this time, advantage. At ExxonMobil, our compen- employee candidates with demonstrated the Board serves the best interests of the sation program is carefully structured to competency in a particular fi eld, and a shareholders through a leadership model with support long-term shareholder value given commitment to represent the interests of all a combined chairman of the Board and chief the capital-intensive nature of our business, shareholders. Other desirable qualities include: executive offi cer (CEO). With more than 36 long investment lead times, and the criti- years of service in both domestic and interna- • Financial expertise; cal importance of managing risk. The most tional positions, the current CEO possesses • Experience as the CEO or senior executive senior executives—including the CEO, named in-depth knowledge of the Corporation and of a signifi cant company or organization with executive offi cers, and more than 1000 other the challenges of an evolving energy industry. responsibilities for global operations; U.S. executives—participate in a common The Board believes these insights position compensation program. • Experience on one or more boards of him to provide exemplary leadership. The signifi cant public or nongovernmental organi- Compensation decisions for executives take Board retains the authority to amend the zations; and, into account several key criteria, includ- By-Laws to separate the chairman and CEO ing results in the areas of safety, security, positions at any time. • Expertise resulting from signifi cant pro- fessional or academically based scientifi c health, and environmental performance. Each year, the independent Board members or research activities. The Operations Integrity Management select an independent director to serve a System (OIMS) Framework, which estab- minimum of two years as presiding direc- In 2011, the Board included female, African- lishes common expectations for addressing tor. The presiding director chairs executive American, and international perspectives. inherent risks in our business, takes priority sessions of the independent directors and Current director qualifi cations are described over other business and fi nancial objectives. works closely with the chairman to develop in the proxy statement. ExxonMobil executives understand that their Board agendas, topics, and schedules, and Board committees. Corporate citizenship compensation will refl ect how effectively they review materials provided to the directors. topics fall under the purview of the Public implement this Framework. The design of the All directors may request agenda topics for Issues and Contributions (PICC), Board compensation program, including the long
PUBLIC ISSUES AND CONTRIBUTIONS COMMITTEE
The PICC reviews and provides advisory safety, security, health, and environment During 2011, the PICC also reviewed guidance on publicly signifi cant policies, provides the PICC with an annual overview ExxonMobil’s 2011 Outlook for Energy, programs, and practices, including corpo- presentation of our safety, security, health, Contributions Budget Guidelines for 2012, rate citizenship topics. According to PICC and environmental performance. The PICC and proposed 2012 Contributions Budget chairman, Mr. Edward Whitacre, Jr., “The was particularly interested in learning about of the Corporation. PICC’s charter is to advise the Corporation our safety program and water management The PICC members and other directors visit on public issues, especially those relating initiatives during the 2011 presentation. ExxonMobil operating sites and discuss to safety, health, and the environment, and In April, the vice president of public and insights. In 2010, the PICC visited the Port on overall contributions objectives, policies, government affairs met with the PICC Allen Lubricants Plant and in 2011, the and programs. This role allows us to assess to discuss stakeholder perspectives on PICC members and other directors visited these activities, monitor performance and natural gas and hydraulic fracturing and the the Kearl project in Alberta, Canada. In action plans to improve performance, and Corporation’s outreach strategy. During the 2012, the PICC plans to visit operations in make site visits to ensure adherence to meeting, the PICC also discussed our cor- Wyoming and will talk with employees and company policies and procedures.” porate blog exxonmobilperspectives.com review site-specifi c safety and environ- Assessing safety, security, health, and as a means of two-way communication with mental performance data. environmental performance is a key part of the general public. the PICC’s activities. The vice president of 34 exxonmobil.com
Ethics High standards of business conduct are a key competitive strength—critical to maintaining our global license to operate. Our presence in nearly every country of the world requires training on international trade laws, including the U.S. anti-corruption and antitrust laws, as well as those in other countries where we do business. All employees are expected to uphold the highest ethical standards of business integrity. They must comply with all applicable laws and accurately record and track all business transactions. Employees are subject to disciplinary action, includ- ing termination, for violations of our policies. Our Board of Directors provides independent oversight of the management of the Corporation. Employees receive training on our ethics policy every four years through Business Practices Reviews, including a detailed review of our vesting requirements and risk of forfeiture of rules—the proposal and the Board’s response Standards of Business Conduct; implementa- stock awards, ensures that senior executives and recommendation are published in our tion guidelines and procedures; and a review have a strong fi nancial incentive to protect proxy statement for review at the Annual of antitrust, competition, and anti-corruption the safety and security of our employees, Meeting of Shareholders. laws. These general training sessions, in addi- the communities and environment in which In 2011, shareholders or groups owning more tion to more comprehensive training given to we operate, and the sustainable value of the than 4 billion—or nearly 82 percent—of the relevant functions on a more frequent basis, company for shareholders. outstanding shares were represented at the are a condition of employment at ExxonMobil. The Compensation Committee carefully Corporation’s Annual Meeting. We engage in Standards of Business Conduct. Our considered the results of the 2011 advisory constructive dialogue with our shareholders Standards of Business Conduct defi ne the vote on executive compensation in which on a variety of issues throughout the year. For global ethical conduct of the Corporation 67 percent of the votes cast were in favor of example, the Episcopal Church submitted a and its majority-owned subsidiaries. These the company’s compensation program. The shareholder proposal on community environ- Standards uphold the values of human rights, Committee considered shareholder feedback mental impact the past few years. ExxonMobil labor, the environment, and anti-corruption. on executive compensation received through met with a representative from this organization The Board of Directors has adopted and a wide-ranging dialogue between manage- in October 2011 to discuss ways to enhance oversees the administration of the Standards. ment and shareholders. A more detailed community engagement at the Baton Rouge, No one has authority to make exceptions or description of the company’s dialogue with Louisiana, facility. We offered the representa- grant waivers to the Standards. Disciplinary shareholders and considerations by the tive an opportunity to visit an ExxonMobil site action is taken against any employee who Compensation Committee regarding the there to talk with local community members. violates these Standards. Employees are advisory say-on-pay vote is on page 33 of As a result of these activities, the shareholder expected to review the Standards each year. the company proxy issued April 12, 2012. proposal was not submitted for the 2012 While ExxonMobil is not a formal signatory of Annual Meeting of Shareholders. Communicating with directors. ExxonMobil’s the United Nations Global Compact, its values directors encourage open and transparent represent key elements of our Standards. communication on corporate citizenship topics. Individuals can email our non-employee direc- 2011 PROXY VOTE SUMMARY tors through the Corporate Governance page of our website or send written correspondence Percent vote for1 in care of the Secretary of the Corporation. Proxy item 2011 2010 2009 ExxonMobil employees work closely with 1. Election of Directors (average)2 96.0 95.3 97.5 directors in responding to these letters and 2. Ratifi cation of Independent Auditors2 98.8 98.9 98.5 emails. Directors sometimes request that 2 senior managers meet with shareholders to 3. Advisory Vote on Executive Compensation 67.2 - - address particular topics. 4. Frequency of Advisory Vote on 42.7 (3 years) - - Executive Compensation2 2.8 (2 years) - - Shareholder relations 54.5 (1 year) - - 5. Independent Chairman 31.3 - 29.5 Every year, shareholders submit proposals regarding ExxonMobil’s policies or opera- 6. Report on Political Contributions 23.6 - - tions for inclusion in our proxy statement. 7. Amendment of EEO Policy 19.9 22.2 39.3 Typically, managers and the Board con- 8. Policy on Water 6.9 6.7 - sider these proposals and the Corporation 9. Report on Canadian Oil Sands 27.1 26.4 - engages the proposal sponsor in a dialogue. 10. Report on Natural Gas Production 28.2 26.3 - If the Corporation and the sponsor reach a consensus, the proposal is often withdrawn. 11. Report on Energy Technology 6.1 6.7 - Otherwise—and unless excluded under 12. Greenhouse Gas Emissions Goals 26.5 27.2 29.0 U.S. Securities and Exchange Commission 1Abstentions count for quorum purposes, but not toward voting on these proposals 2Proposals submitted by the Board 2011 Corporate Citizenship Report 35
Internal audits. Regular internal audits and report suspected violations of laws and PricewaterhouseCoopers LLP conducted an self-assessments help ensure the rigor- company policies. The Corporation provides independent assessment that determined our ous implementation of our control systems several confi dential mechanisms for report- internal controls system is effective for fi nancial and Standards. ExxonMobil’s internal audit ing, including a 24-hour phone number and reporting. Regular self-assessments and audits team of more than 200 well-trained auditors mailing address. Employees can also report help ensure that every operating unit consis- annually audit about one-third of ExxonMobil’s violations as a part of supervisory reviews. tently implements our controls and standards. operations, conducting detailed assessments of Confi dentiality is respected throughout the facilities, business units, personnel, and records, investigation process, subject to legal require- Political advocacy and and thoroughly investigating noncompliance ments; penalizing or threatening an employee contributions with the Standards. These audits are conducted for fi ling a report is prohibited. A Hotline ExxonMobil supports policies that promote across all functions of the Corporation. Steering Committee comprising security, stable investment climates for long-term audit, law, and human resources personnel Bribery and corruption. Anti-corruption business viability. ExxonMobil makes political reviews all reports of suspected violations. practices are an essential component of our contributions to candidate committees, political The Committee provides a quarterly report to compliance program, given that we operate parties, associations, and other political organi- the Audit Committee, including any violations globally and in many challenging environ- zations, as permitted by applicable laws in the or major issues. Violations lead to disciplinary ments. The Anti-Corruption Legal Compliance United States and Canada, and as authorized actions, including dismissal. Summary outlines ExxonMobil’s commitment to by the Board of Directors. The Corporation comply with the U.S. Foreign Corrupt Practices Global management standards refrains from making political contributions Act (FCPA), the United Kingdom Bribery Act, in any nation other than the United States or and global anti-corruption standards in all and approaches Canada. In 2011, Exxon Mobil Corporation business relationships. ExxonMobil employees Our internal management systems help identify, contributed a total of $226,700 to legislative and contractors are prohibited from making track, and report the metrics that demonstrate and gubernatorial candidates and caucuses in payments to, or engaging in transactions with, and guide our performance. These systems 14 U.S. states. Information about our political government offi cials to improperly infl uence the enable us to comply with new regulations; where activities, policy, guidelines, and an itemized list performance of their offi cial duties. Maintaining laws and regulations do not exist, they provide a of corporate political contributions are available internal controls and keeping accurate and framework for maintaining our high standards. on our website. ExxonMobil’s employee- and complete transaction records are required. Our retiree-funded political action committee (PAC) Operations Integrity Management System. standard language for procurement contracts disbursed $631,500 to federal candidates The Operations Integrity Management System includes a requirement to comply with all laws in 2011. Based on these contributions, CQ (OIMS) establishes common expectations for and keep accurate books and records, and Moneyline listed the ExxonMobil PAC No. 84 in addressing safety, security, health, envi- where appropriate, contains specifi c anti-brib- size compared to other PACs. Among corporate ronmental, and social risks. OIMS provides ery commitments. For more information, please PACs, the ExxonMobil PAC ranked No. 33 in a systematic, structured, and disciplined see the case study on integrity in the supply size in terms of receipts from employees and approach to measure progress and track chain (page 36). retiree shareholders, and No. 36 in size of total accountability across business lines, facilities, contributions to candidates. All rankings are Training. Oil and gas exploration and pro- and projects. We evaluate opportunities to compiled from publicly available data fi led with duction often take us to remote parts of the improve the OIMS Framework every fi ve years the Federal Election Commission. world, with changing political and regula- and make regular upgrades and adjustments. tory climates. In 2011, approximately 13,400 In 2011, Lloyd’s Register Quality Assurance, ExxonMobil, like many U.S. companies, labor employees took part in anti-corruption training. Inc., reviewed our ongoing performance and unions, and other entities, lobbies the U.S. This training covers the basics of the FCPA, attested that OIMS is consistent with the Congress and state legislatures, and com- the United Kingdom Bribery Act, global anti- standard on environmental management plies fully with regulations by reporting federal corruption standards, recent developments systems of the International Organization for lobbying expenses in quarterly disclosure in enforcement, and compliance with our Standardization (ISO 14001:2004) and the reports to Congress. In 2011, ExxonMobil internal anti-corruption policy, guidelines, and Occupational Health and Safety Assessment reported lobbying expenses of $12.7 million. processes. Employees in positions assessed Series for health and safety management CQ Moneyline ranked ExxonMobil No. 21 for to be higher-risk receive live training every systems (OHSAS 18001:2007). For information lobbying expenses. We lobbied on a number year and within three months of entering their on how we implement OIMS across our opera- of public policy topics, including energy positions. Every two years, managers and pro- tions, please see the Kearl site tour (page 10), policy, trade, taxes, pipeline safety, security, fessional employees not in higher-risk positions the case study on integrity in our supply chain and climate policy. receive training. Every four years and in 2012, (page 36), and the Singapore site tour (page 48). all employees will attend mandatory half-day ExxonMobil also engages with trade associa- Control systems. Business Practices Reviews that include anti- ExxonMobil’s System of tions at the national, state, and local levels. corruption issues. ExxonMobil believes that Management Control Basic Standards defi nes Participation in these organizations helps face-to-face training is the most effective way to essential principles and concepts that drive support our positions on issues critical to train employees in anti-corruption compliance; our business controls. Our Controls Integrity the shareholders’ interests. Some of the almost all anti-corruption training is conducted Management System is designed to assess support we provide to trade associations may in an interactive live session. Additionally, we and measure fi nancial control risks, including be used for lobbying activities. ExxonMobil monitor world events and political changes and procedures for mitigating concerns, monitor- requires trade associations to report to us the advise employees as appropriate. ing compliance with standards, and reporting portion of dues used for lobbying purposes; results to the appropriate operations and we include these amounts in quarterly public Systems and practices for reporting viola- management groups within ExxonMobil. These Lobby Disclosure Act fi lings. tions. We reinforce our commitment to ethics company-wide fi nancial controls meet or and high standards of business conduct exceed the requirements of the Sarbanes-Oxley Explore enhanced web content at with the expectation for all employees to Act and NYSE listing standards. exxonmobil.com/citizenship 36 exxonmobil.com
CASE STUDY
Integrity in our Supply Chain
Third parties providing services to ExxonMobil can impact our operations and reputation. Currently we rely on more than 175,000 suppliers of goods and services, including more than 85,000 third- party contractor personnel. Because our global reach expands well beyond our fence lines, we seek and develop relationships with suppliers that uphold our commitment to operations integrity.
Our supply chain management process This process is used whether ExxonMobil economy. We comply with specifi c sup- begins when any of ExxonMobil’s business is procuring a pump for a refi nery, janito- plier-related requirements in each country lines identifi es operational or project needs rial services at an offi ce building, or hiring where we operate. requiring the procurement of third-party a fabricator to build an offshore structure. When selecting a supplier, we evaluate the goods, services, or materials. We apply a Potential suppliers and their capabilities bids submitted and make a determination standardized procurement approach that are then assessed based on operational based on quality, technical capabilities, and allows our operations to share the same criticality and level of risk associated cost. When we are procuring a component rigorous standards, accountability, and best with the material or service required. for a specifi c project, the safety and viability practices worldwide. Our procurement staff Considerations include: of the project may rely on assurances of is trained to conduct supplier prequalifi cation • Health and safety requirements; product quality. For example, if we need assessments, which include anti-corruption • Technical requirements; to purchase pipe for one of our upstream due diligence where appropriate, perform projects, we perform extensive analysis and restricted parties screening, and incorporate • Environmental requirements; testing to confi rm that the pipe complies standard legal terms and conditions into • Emergency response capabilities; with project specifi cations. For further infor- contracts. After pre-qualifi cation, our pro- • Security and human rights standards; mation on some of these standards, see the curement professionals communicate project • Design, construction, and project assur- Nigeria pipeline example (page 41). expectations or operational requirements ance and procedures; that a potential or existing supplier must meet. We use procurement plans to describe • Product quality assurance, including Local supplier development our needs and recommend methods to product stewardship; It is one of ExxonMobil’s priorities to consider achieve them. • Supplier operating, maintenance, and local suppliers as part of our project agree- control processes; and, ments with host countries. We want to build and maintain globally competitive supply Supplier qualifi cations • Financial qualifi cations. chain infrastructure wherever we operate to ExxonMobil has in place a disciplined Additionally, supplier selection takes into enhance supply chain security and reduce qualifi cation process for suppliers. Once the account both regulatory and ExxonMobil operational risk. Helping develop local suppli- business line has determined the operational policies regarding local hiring, material ers to service the oil and gas industry is part requirements, procurement clearly com- use, supplier diversity, indigenous peoples of our national content strategy. For more municates those requirements to potential support, historically underutilized seg- information, see page 41. suppliers and incorporates the operational ments of the population, and the local requirements into the proposed agreement.
SUPPLY CHAIN TRANSPARENCY
Our Statement on Labor and the Workplace health, the environment, and human rights. copies of any records concerning compli- articulates our support for the principles Furthermore, requests for quotations ance with contract requirements and the law. of the International Labor Organization issued by our procurement staff typically We select a certain percentage of suppliers (ILO) 1998 Declaration on Fundamental include clauses relating to the prohibition annually for such audits, which include a Principles and Rights at Work, namely the of forced or child labor and the payment compliance review on contract provisions. elimination of child labor, forced labor, and of wages in accordance with local laws. Human traffi cking issues have received workplace discrimination, and the recogni- Participants in such tenders are required to considerable attention in recent years. tion of the right to freedom of association adhere to those requirements as a condi- ExxonMobil proactively manages supply and collective bargaining. Through our tion of participating in the tender process. chain risks, including those associated with regimented procurement process, we seek An additional means of managing supply human traffi cking, through our Standards business partners that observe similar chain transparency involves auditing. A of Business Conduct and Statement on standards. Purchases arranged for by our typical clause in our contracts requires sup- Labor and the Workplace. We also seek to global procurement organization typically pliers and all their subcontractors to allow reduce the underlying conditions that lead include contract language that requires ExxonMobil access to all offi ces and work to human traffi cking by working to engender adherence to all applicable laws and locations, to interview supplier and subcon- economic growth and personal prosperity in regulations, which would include all laws tractor personnel, and to make and retain areas that otherwise offer few opportunities. and regulations regarding safety, security, 2011 Corporate Citizenship Report 37
Supplier monitoring STAKEHOLDER ENGAGEMENT We use OIMS to manage risk across our ExxonMobil “Buddy Manager System” operations. The OIMS Framework estab- lishes expectations for managing and We expect third parties working for us to perform in a manner consistent and compatible mitigating safety, security, health, environ- with ExxonMobil’s policies and business objectives. One best practice called the “Buddy mental, and social risks in every aspect of Manager System” is becoming widespread across our operations for enhancing the our business, including our supply chain. company-supplier relationship. Each primary supplier is assigned an ExxonMobil “buddy” After selecting suppliers, each business line who acts as a mentor, helping the individual or fi rm set performance objectives. “Buddies” is responsible for managing the supplier provide advice and guidance, and help suppliers build accountability with ExxonMobil. At relationship. Implementing OIMS Element 8— the Baytown Manufacturing complex, Rescar works as a third-party contractor providing Third-Party Services—calls for the moni- railcar switching and repair services. The assigned ExxonMobil “Buddy Manager” works toring and stewardship of third-party closely with Rescar senior management and the on-site team on improving the design performance. We provide feedback to and effectiveness of Rescar’s safety program. The ExxonMobil “Buddy Manager” con- suppliers, and when necessary, request that ducts periodic fi eld visits and site walk-throughs to verify and ensure Rescar is properly they correct defi ciencies. In certain cases, implementing safety plans. Over the years, this collaboration has signifi cantly improved we terminate the contractual relationship if Rescar’s safety performance at the Baytown complex. At many of our locations, we have performance does not meet expectations. several suppliers that work in similar capacities. We encourage collaboration on safety issues among these partners, as it helps improve performance and encourage innovation. Improving supply chain sustainability OIMS IN THE ACQUISITION PROCESS
ExxonMobil is working with our suppliers to Operations identify sustainable alternatives throughout the supply chain. Our procurement organization’s 2 3 4 Risk Facilities Information/ Total System Cost approach is intended to Assessment & Design & Documentation identify and reduce waste and ineffi ciency in Management Construction the supply chain. Additionally, we are assess- ing sustainability certifi cations for suppliers, Driver Evaluation products, and services. Our global procure- 1 5 6 7 11 ment organization has begun training staff Management Personnel Operations Management Operations specifi cally on sustainability considerations in Leadership, & Training & Maintenance of Change Integrity Commitment, & Assessment & our purchase-to-pay processes and we aim to Accountability Improvement align sustainability efforts with major suppliers.
8 9 10 Third-PartThird-Partyy Incident Community MINORITY- AND WOMEN-OWNED Services Investigation Awareness & BUSINESSES IN THE SUPPLY CHAIN & Analysis Emergency PPreparedness We cultivate diversity across our supply chain through our U.S.-based Supplier Diversity Program. This initiative proac- tively includes qualifi ed minority- and women-owned business enterprises (MWBEs) in our procurement sourcing 8 process. In 2011, we achieved a signifi - Third-Party cant milestone of purchasing materials Services and services worth $869 million in direct spend and $181 million in spend lever- Business Procurement aged through contracts where suppliers purchase from MWBEs on our behalf, 1. Evaluate and select based on criteria for a total annual spend of over $1 billion. 2. Define and communicate Supplier In 2012, we will continue to grow our busi- requirements ness relationships with over 1500 MWBEs 3. Manage interfaces between organizations in the United States and look for opportu- 4. Monitor and assess nities in other parts of the world for similar performance supplier diversity programs. 38 exxonmobil.com
Economic Development
HIGHLIGHTS 65+ 61% $278 thousand employees of our employees million in combined corpo- trained in 2011 are located outside the rate and employee giving United States in the form of cash, goods, and services worldwide
PERFORMANCE OVERVIEW
What we said in 2010 What we did in 2011 What we plan to do Work with the Medicines for Malaria Launched a research study with the Partner with the United Nations Venture to fund clinical trials of new Cherie Blair Foundation for Women on Foundation to develop a report examining anti-malarial drugs in Papua New Guinea mobile phone services that can help women the most effective investments to advance Fund 10 scholarships for a master’s entrepreneurs develop their businesses women’s economic empowerment degree in Global Health Science at Worked with the Medicines for Malaria Work with TRACE International to Oxford University to help train the next Venture to fund clinical trials of new conduct a transparency forum for govern- generation of health leaders in develop- anti-malarial drugs in Papua New Guinea ment offi cials in West Africa ing countries and emerging markets Completed funding of a two-year com- Continue efforts to achieve a 90 percent Approach a 90 percent Russian mitment for 10 scholarships for health Russian workforce in our Sakhalin-1 opera- workforce in our Sakhalin-1 operations leaders from developing countries and tions and projects, now targeted for 2013 and projects by 2012 emerging markets to obtain a master’s Strategize science, technology, Launch a Latin America degree in Global Health Science at engineering, and mathematics (STEM) Businesswomen’s Network Oxford University programs to achieve national content Launched a Latin America goals in Nigeria and Angola Businesswomen’s Network 2011 Corporate Citizenship Report 39
ExxonMobil is committed to developing local economic capacity in a way that benefi ts people, com- munities, and our business over the long term. This strategic objective is embedded into our project plans. Supporting strong local economies where we operate enables economic growth and positively affects community health, education, gender equality, security, and environmental protection.
Contributing to economic growth ExxonMobil management and staff, help local materially support transparency objectives. governments and contractors understand and ExxonMobil estimates that project-specifi c Poverty, restricted access to education, comply with international anti-corruption con- reporting could be both costly and diffi cult insuffi cient business and technical skills, ventions. We plan to work with TRACE in 2012 to implement. We believe that transparency lack of employment opportunities, and to conduct another workshop in West Africa. disclosure rules should be written so as to not corruption are just a few of the barriers to confl ict with host country laws or contractual economic growth in many countries where In August 2011, ExxonMobil participated in obligations. Project-specifi c disclosure called ExxonMobil operates. These barriers will not a Revenue Watch Institute capacity building for in the Dodd-Frank fi nancial reform could be eliminated through aid alone, but through program, hosted by the Catholic University place certain publicly traded, private sector the creation of business frameworks that of Central Africa in Yaoundé, Cameroon. companies at a competitive disadvantage enable the development of local economies The program brought together almost from securing new business opportunities, through skills development, job creation, and 40 civil society representatives from eight both by disclosing sensitive commercial data opportunities for investment. These issues African countries. ExxonMobil presented and by imposing different reporting standards are complex, and the private sector is limited on a variety of topics to provide partici- on private versus state-owned companies. in its ability to address them. Forming global pants with a business perspective of the partnerships is one part of creating long- basic knowledge and tools for responsible term benefi ts for local communities. revenue management and reporting. We will National content continue participating in similar programs Promoting social and economic development In 2000, the United Nations adopted eight around the world to help develop global in the communities and countries where we Millennium Development Goals (MDGs) transparency practices. operate is a business imperative. ExxonMobil aimed at improving living conditions and works to build local capacity and sustain opportunities for the world’s poorest people. ExxonMobil has actively participated in economic growth beyond the life cycle of As we expand our operations in developing Extractive Industries Transparency Initiative our projects through comprehensive national countries, ExxonMobil has the opportunity (EITI) since its inception in 2002 at both the content development programs. to help catalyze economic development secretariat and country levels, including and support local efforts that make prog- continuous participation on the EITI board as We design national content programs around ress toward the MDGs. Achieving these either a primary or alternate member. Nearly three focus areas: workforce development, goals depends on access to modern energy 20 countries where we have operations are in supplier development, and strategic commu- sources—a central aspect of our business. the process of becoming, or have become, nity investments. We work collaboratively with EITI members. The Corporation is supporting host governments and other stakeholders Transparency the application, validation, and membership to implement national content initiatives. To ensure a systematic, long-term approach, we As a core part of our commitment to maintain- processes of EITI participating countries integrate national content into overall project ing the highest standards of ethical behavior, such as Azerbaijan, Cameroon, Chad, execution through the ExxonMobil Capital we actively support transparent government Indonesia, Kazakhstan, Nigeria, and Norway Projects Management System (EMCAPS). revenue reporting, a responsibility we share and of potential new EITI countries including with our extractive industry peers. Australia, Brazil, Colombia, Mexico, Papua Every new upstream project in an emerg- New Guinea, and the United States. ing market must develop a project-specifi c We recognize that public disclosure of pay- national content plan. A plan consists of goals ments companies make to governments ExxonMobil’s practical experience imple- and objectives, an outline of the approach and governmental use of those payments menting EITI has shown that the best and requirements for the three focus areas, strengthens accountability and good gov- results are obtained when countries begin performance monitoring, and reporting. We ernance, reduces corruption, and promotes their disclosure processes in line with their integrate these plans into our day-to-day greater economic stability. To achieve the own legislation, culture, and traditions, operating procedures, project strategies, and shared goal of revenue transparency, we and adopt simple and straightforward procurement efforts. participate in transparency capacity building mechanisms that ensure multistakeholder initiatives, as well as a variety of multistake- engagement and commitments. The level Our National Content Development— holder discussions. of aggregation and granularity of disclosure Guidelines, Strategies, and Best Practices needs to consider each country’s laws and Guidebook contains the key elements of a Since 2006, we have provided in-kind support capacity. It also needs to protect indi- national content strategy and plan; models of TRACE International workshops in Chad vidual companies’ proprietary information. and tools for the successful development of and Equatorial Guinea. TRACE conducts Where disaggregated industry reporting is national content; and roles and responsibilities two-day anti-bribery law events that begin required, we work with that government and at the corporate, country, and project levels. with a workshop for the local staff of TRACE other interested parties. member companies, including ExxonMobil ExxonMobil operates in countries with a and their local contractors, and conclude Excessively detailed and disaggregated diverse range of needs, challenges, and with a high-level anti-bribery compliance disclosure would necessitate the develop- requirements. We carefully assess the social forum designed for government offi cials of ment of a separate set of global systems and economic conditions of each country the host country. These events, which draw to capture, calculate, allocate, aggregate, and consider local factors such as regula- the full support and participation of local and validate the data in ways that would not tory requirements, local development goals, 40 exxonmobil.com
stakeholder expectations, business environ- environment. Training typically covers ment, local capacity, and infrastructure. We ExxonMobil culture, ethics, and business incorporate the results of these assessments practices; safety practices; environmental into our national content planning. During regulations; the English language; skill and 2012, we plan to further refi ne national content facility-specifi c training; work assignments and planning, roles and responsibilities, and on-the-job training; and mentoring and coach- national content integration within EMCAPS. ing. Over the long term, this helps us develop a pool of talented employees to meet future busi- Workforce development ness needs both locally and around the world. At ExxonMobil, workforce development In Angola, we work strategically to achieve means growing our pool of diverse and our recruitment targets and to develop local talented employees by recruiting and training employees to their maximum potential. locally. Where pertinent, our contracts include Technical students take part in a two- to requirements that contractors and suppliers three-year intensive training program that hire and train a national workforce. Our goal includes traveling to Canada for specialized The Enterprise Development Center in Astana, is not only to maximize recruiting, but also technical training. In 2011, 31 production Kazakhstan, has provided training to about to develop and build workforce capacity, technicians completed the 18-month course 9000 local entrepreneurs since 2005. In 2011, including technical experts and leaders who and moved to on-the-job training. An addi- ExxonMobil launched a new training center in can add value locally and compete globally. Atyrau to develop suppliers in Kazakhstan’s oil tional 40 technicians began training in August and gas region. To achieve this goal, our national content pro- 2011. We invite high-potential local employees grams must overcome obstacles in identifying to work on projects with other ExxonMobil and attracting skilled labor and profession- affi liates to expose them to new opportuni- Training Expenditures and als, matching workforce skills to business ties and enhance their leadership abilities. Number of Employees Trained requirements, and retaining and developing a Since 2007, the proportion of local Angolan Spending (millions of dollars) local workforce over the long term. Employees trained (participants) employees to expatriate employees has been Local hiring. We believe we have a responsi- steadily increasing. In 2011, Angolans made 08 $69 bility to build a legacy of economic progress up 72 percent of our local workforce. 09 $71 10 $77 by providing local employment opportunities, Another example of capacity building is the 11 $80 and investing in the workforce of our host technical skills development of local com- countries. While local employment helps munities. ExxonMobil determined that young 08 48,000 us meet our hiring needs, it also advances Nigerians, especially those living in the oil 09 52,000 economic development and education in the 10 61,000 production areas of the country, lacked the countries where we operate. We implement a 11 65,000 education and technical skills necessary set of best practices to support local hiring, to compete for oil and gas industry jobs. including on-campus recruiting, employee To address this, we established a techni- networking, trade organizations, referrals, and cal training center in Eket, which has over Expatriates by Region of Origin external search fi rms. Such practices have time produced a large part of ExxonMobil’s Asia Pacific Africa/Middle East brought the percentage of nationals in our Nigerian workforce and has provided skilled 508 225 workforce in Kazakhstan to nearly 73 percent. staff for other employers as well. To date, we
Latin Europe By 2013, we expect Russian nationals to have hired nearly 500 process, mechanical, America 1057 make up nearly 90 percent of the workforce instrumentation, and electrical graduates from 148 at our Sakhalin operations. And, in Malaysia, Total the training center. More than 90 percent of our 3722 97 percent of our workforce is Malaysian, with approximately 2000 employees in Nigeria are 30 percent women. We aim to advance many nationals. of the host country nationals we train and North America hire through our national content program In Indonesia, our affi liate, Mobil Cepu Limited, 1784 into roles in other countries to further develop is developing a national workforce to operate their industry knowledge. and manage the Banyu Urip central processing facilities, pipeline, and fl oating offshore storage In 2011, approximately 61 percent of our terminal. The training program was established employees were located outside the United in 2007 utilizing a training center located at States. ExxonMobil expatriates (individuals Cepu. It takes approximately 15 months to working in a country other than their country complete the English language and basic oil of permanent residence) share their expertise and gas skills training program. The trainees and train and mentor nationals for operational then move into production operations to and leadership roles. In 2011, expatriates continue to acquire skills and competencies accounted for approximately 5 percent of our for operating and maintaining the facility global workforce. equipment. The program also involves train- Training and development. Rigorous train- ing at similar production operation facilities ing and development programs allow us to overseas, including the United States and meet local hiring objectives and develop local Canada. This training program specifi cally workforces. We use a proven global train- meets the Indonesian government’s objective ing curriculum customized to our operational to develop and maximize the country’s employ- ment opportunities. 2011 Corporate Citizenship Report 41
Ongoing corporate and technical training facilitates career development for all of our employees. In 2011, our major business lines together spent more than $79.9 million on employee training, reaching more than 65,000 participants. To strengthen our company’s technical capacity, approximately 39,000 participants attended more than 4600 professional technical training ses- sions. In addition, more than 3800 employees at various management levels participated in ExxonMobil’s leadership development training programs in 2011, 27 percent of whom were women and 60 percent non-U.S. employees. Our Upstream Technical Training Center is one of several world-class centers ExxonMobil promotes opportunities to develop the skills and experience of our local suppliers. Above, that deliver training programs every year on ExxonMobil’s Nigerian affi liate, Mobil Producing Nigeria, works with government offi cials to inspect the fabri- topics ranging from integrated exploration cation yard of locally sourced pipeline. to reservoir simulation to fast-drill borehole management. International contractors participated as well in city, Astana, to help achieve the local govern- establishing local sources for iron ore for pipe ment’s goal to diversify the economy beyond Supplier development coating and developing highly-skilled welders. the oil and gas industry and support the Supplier development programs ensure that our As a result, extensive tests performed both development of small- and medium-sized procurement activities strengthen host country locally and internationally on the pipes manu- businesses. Starting with ExxonMobil and economies and promote ExxonMobil as a factured in Nigeria confi rmed that they met or the United States Agency for International partner of choice. Our ultimate goal is to build exceeded our technical specifi cations. Development’s joint sponsorship, the Astana and maintain a reliable and globally competi- EDC during the past six years has pro- In some cases, ExxonMobil can best tive supply chain wherever we operate. This vided training through International Labor address infrastructure demands and develop means overcoming obstacles such as limited Organization (ILO) certifi ed technicians to local capacity by working with suppliers as a infrastructure and inadequate fi nancing for local 9000 entrepreneurs with a focus on female group. We have launched enterprise centers businesses, and often requires helping our sup- entrepreneurs. Based on the success of the in Chad, Kazakhstan, and Papua New pliers meet our safety standards. center in Astana, ExxonMobil opened another Guinea that develop the capacity of local EDC in 2011 in the oil and gas producing In 2011, a local manufacturer delivered and suppliers and improve their business skills. region of Atyrau, a traditionally underserved installed 2000 metric tons of specialized The Papua New Guinea liquefi ed natural gas region of the country. Atyrau EDC plans steel pipeline in the Edop-Idoho fi eld offshore (PNG LNG) project opened an Enterprise to train more than 1600 entrepreneurs by Nigeria, representing the fi rst time the oil and Center in April 2010, and this past year year-end 2012. This initiative reinforces gas industry has used pipe made in-country received their fi rst independent contract to ExxonMobil’s commitment to developing the for an offshore application. ExxonMobil’s conduct staff training. local economy. Nigerian affi liate Mobil Producing Nigeria In 2005, ExxonMobil’s affi liate, ExxonMobil worked for more than four years with the Kazakhstan Inc., established an Enterprise manufacturer and a government agency to Development Center (EDC) in the capital prepare the contractor to meet our specifi ca- tions. This partnership has led to contracts creating hundreds of direct and indirect jobs STAKEHOLDER ENGAGEMENT for Nigerians. The local manufacturer has Workforce development in Papua New Guinea pending orders for more than 100 kilometers of specialized pipe, and it plans to continue At our PNG LNG project, we are exceeding our workforce forecast for Papua New Guinea to apply international technical standards as nationals. The current construction workforce includes more than 8500 Papua New Guinean they work to meet local demand with globally workers, approximately 60 percent of the total construction workforce. Training local workers competitive quality. is an essential element of our Papua New Guinea-specifi c national content plan. The limited local fabrication capacity in Nigeria, In 2011, six engineers from our Graduate Training Development program began operations along with strict certifi cation standards, had and maintenance technician training. Our next nine recruits, including one woman, will been obstacles in establishing local manufac- begin their program in 2012. turing capacity in the past. To overcome these hurdles, ExxonMobil arranged for joint visits Gerard Schulze, one of our fi rst Papua New Guinean graduates, with a with the manufacturer’s employees to South degree in mechanical engineering, described his experience. “When I started Africa and South Korea to study mill facili- I had very little to no experience with the process and chemical engineering ties and materials procurement approaches. fi elds so it was a bit intimidating. The amount of manuals and documents that They also sent contractor employees to the I had to read and understand in order to get up to speed with the process United States to learn more about engineer- side of things was very overwhelming at fi rst. However, with the help of fellow engineers ing standards. In Nigeria, ExxonMobil retained and technical training, things began to pick up. I look forward to the many challenges and experienced inspectors to train the manu- career development opportunities that are yet to come.” For more information on our work- facturer in proper pipe-milling procedures. force development, visit pnglng.com. 42 exxonmobil.com
IMPLEMENTING STRATEGIC COMMUNITY INVESTMENTS
Corporate Level Initiatives: 2011 Highlights
ExxonMobil Malaria Initiative. Last year, Math and Science Initiative. In 2011, Women’s Economic Opportunity Initiative. with support from ExxonMobil, Malaria Astronaut Bernard Harris traveled to Africa A new partnership with the Cherie Blair No More’s NightWatch program reached to encourage more than 1000 students to Foundation for Women will begin with more than 5 million Cameroonians with reach their dreams by studying science, comprehensive research on cellular phone educational messages about bed-net use. technology, engineering, and math (STEM). technology. The fi ndings from this research Partnering with local celebrities and Dr. Harris also met with community leaders, will identify mobile phone applications to community leaders, a message to remind educators, and key policy makers to discuss advance women’s economic opportunities. people to use bed nets is broadcast at 9 p.m. the need for strong STEM initiatives and the During the second phase of the project these each night when mosquitos take fl ight. positive effects they bring. Learn more about applications will be piloted in three countries: During 2012 this program will be imple- this historic visit, as well as other ExxonMobil Nigeria, Egypt, and Indonesia. Please visit mented in other African countries. Please programs supporting math and science edu- exxonmobil.com/womensinitiative. visit exxonmobil.com/malaria. cation at exxonmobil.com/citizenship.
Focus on malaria prevention and control. International health achieved. The World Health Organization’s World Malaria Report offi cials estimate malaria kills nearly 655,000 people annually—most 2010 shows a 10-percent decline in global malaria deaths between of them pregnant women and children under the age of fi ve. In addi- 2008 and 2009. While we are seeing some success in ending tion to the tremendous human costs, this disease leads to losses of deaths from malaria, there is still more work to be done. productivity and economic opportunity in developing economies. In 2011, we awarded around $11 million to more than 25 organiza- Since 2000, ExxonMobil and the ExxonMobil Foundation have con- tions across Africa and in the Asia Pacifi c region. Work funded by tributed more than $111 million toward the fi ght against malaria. Our these grants includes many types of malaria prevention and control funding has allowed our projects and operations to reach more than initiatives like research into malaria vaccines and treatments and 66 million people by training nearly 180,000 healthcare workers and improved malaria prevention education. For example, $500,000 providing 13.1 million bed nets, 1.6 million doses of anti-malarial went to support a malaria diagnostic laboratory in Ghana, to drugs, and more than 875,000 rapid diagnostic kits. We also bring benefi t efforts in the region. our expertise in business management to ensure desired results are
Strategic community We selected these focus areas based on our Our country-level community investments, investments ability to provide functional support beyond stewarded locally, represent a key aspect check writing, and each is linked closely to of our national content strategy. We focus Through public-private partnerships and our continued operations. Women make up local investments on many of the social and ongoing stakeholder engagement, we work half the world’s population, yet earn only economic challenges identifi ed in our national to improve social and economic conditions 10 percent of the world’s income. Math and content planning process. Around the world, wherever we operate. This is the third element science are increasingly important in today’s country-specifi c investments address needs of our national content approach. careers, yet students’ academic performance ranging from community water access to We make strategic community investments in these fi elds is declining. Malaria and its inoculations against disease. When determin- at both the corporate and country level, and complications impact the household incomes ing where and how to invest, we consider the each serves different needs. Our corporate of families in Africa. Each of these pressing development goals of each community and activities through the ExxonMobil Foundation issues threatens economies and communi- the benefi t to our operations. In Angola, we include a focus on three global issues: ties around the world. Helping to address align our strategic community investments women’s economic participation, advancing these issues enables the communities around the Angolan government’s priorities of math and science education, and prevention around us to thrive. education, health, environment, agriculture, and control of malaria. and family, which directly impact the individual 2011 Corporate Citizenship Report 43
2011 Community Investments by Focus Area (millions of dollars) Country-Led Initiatives: 2011 Highlights Employee and Arts and culture retiree giving $4.5 $43.7
Other Civic and education community $18.5 $63.0 Worldwide total1 Public $278.4 Environment policy $6.0 research $7.8 Health $24.4 Pre-college education $56.7 United appeals and Higher education workplace giving $45.2 $8.6
2011 Community Investments by Geographic Region (millions of dollars)
Mexico. The Ministry of the Environment Indonesia. ExxonMobil’s affi liates created United States and Centre for Development and a microfi nance program to develop the $161.3 Population Activities (CEDPA) have formed a entrepreneurial skills of Indonesian women unique alliance with ExxonMobil to support living in underprivileged communities. These the country and the company’s common women normally would not qualify for loans Worldwide total1 priorities: environmental stewardship and through Indonesia’s banking system due Canada $278.4 Europe/ women’s economic participation. to their lack of a credit history or steady $13.3 Caspian employment. Additionally, many Indonesians $30.1 The week-long workshop focuses on Latin America fear negative judgment from taking a bank $1.7 training key members of the Ministry loan. This microfi nance program makes Africa/ Asia Pacific of Environment's Advisory Council for Middle East $26.1 small collateral-free loans and equips new $45.9 Sustainable Development in order to borrowers with fi nancial skills through 1 strengthen their communities via diverse Total contributions include ExxonMobil corporate and employee peer mentorship. Through the end of 2011, and retiree giving through ExxonMobil’s matching gift, disaster projects that address a wide range of relief, and employee giving programs. more than 15,000 Indonesian women have environmental and social issues. Since borrowed approximately $500,000 with 2009, 48 men and women from the Council close to a 100 percent loan performance have participated in programs on advocacy, ratio. By helping women overcome cultural gender, and the environment, all of which barriers and gain community recognition, are emerging issues in Mexico. the program leads to better outcomes for families and the surrounding community.
well-being and thus the productivity of the in the United States and $110 million sup- Employees and retirees donated $44 million Angolan work force. For example, more than ported communities in other countries. For through ExxonMobil’s matching gift, disaster 70,000 Angolans now have direct access to more information on both our corporate and relief, and employee giving programs. This modern health services, thanks to a $950,000 country-specifi c strategic community invest- includes more than $3.6 million donated by contribution to build the fi rst medical center in ments, please see our website. ExxonMobil employees, retirees, dealers, and the Andulo municipality, Bié province. distributors to support disaster-relief efforts in response to the magnitude 9.0 earthquake Our worldwide spending includes contribu- Employee volunteerism that hit Japan in 2011. When combined with tions to nonprofi t organizations; we also and giving corporate donations, ExxonMobil—together invest in social projects through various Through company-sponsored volunteer pro- with our employees and retirees—contributed joint-venture arrangements, production-shar- grams, more than 23,000 ExxonMobil employ- $278 million to community investments ing agreements, and projects operated by ees, retirees, and their families donated more worldwide. others. In 2011, Exxon Mobil Corporation, our than 728,900 volunteer hours to 5300 chari- divisions and affi liates, and the ExxonMobil table organizations in 43 countries in 2011. Explore enhanced web content at Foundation provided a combined $234 million Of this, 11,000 participants donated more than exxonmobil.com/citizenship in cash, goods, and services worldwide. Of 168,100 hours to more than 1100 organizations the total, $124 million supported communities in countries outside the United States. 44 exxonmobil.com
Human Rights and Managing Community Impacts
HIGHLIGHTS 100 % 5 79 % of registered grievances number of countries of our private security in Papua New Guinea in which training was personnel contracts have are investigated and tracked provided for new lead been enhanced to include through fi nal closure country managers provisions to address human rights concerns
PERFORMANCE OVERVIEW
What we said in 2010 What we did in 2011 What we plan to do Assess company policies and Reviewed company policies and Continue to review existing practices processes relative to the United Nations processes relative to the U.N. Framework toward making appropriate adjustments (U.N.) Framework and Guiding Principles and Guiding Principles on Business and relative to expectations under the U.N. on Business and Human Rights Human Rights and determined areas for Framework and Guiding Principles on Complete human rights training in continuous improvement Business and Human Rights priority countries and assess follow-up Completed human rights training Continue to update human rights needs for those who received training in sensitive countries, with additional training for sensitive countries, as well in the last three years sessions for new lead country managers as means of reaching broader base of Develop a computer-based human in fi ve countries employees with duties relevant to human rights training module for effi cient, Broadened human rights training rights issues wider availability programs to reach a more diverse group Launch the Upstream Socioeconomic Update the Upstream Socioeconomic of personnel Management Standard across all the Management Standard Updated the Upstream Socioeconomic upstream companies and continue to Management Standard develop associated guidance 2011 Corporate Citizenship Report 45
Oil and gas development requires operating in a variety of cultures and economic structures around the world. Our approach to engaging with the communities near our sites demonstrates our funda- mental respect for human rights and our belief that strong, informed communities lead to a stable business environment.
Community impacts and distinctly different roles of governments and ExxonMobil’s Statement on Labor and the relationships business with regard to human rights—the gov- Workplace articulates our support for the ernments’ duty to protect human rights and the principles of the ILO Declaration, specifi cally Oil and gas projects and operations can affect corporations’ responsibility to respect them. the elimination of child labor, forced labor, individuals, communities, and the environment. and workplace discrimination, and the right The U.N. Framework and Guiding Principles We strive to identify and mitigate potentially to freedom of association and collective bar- on Business and Human Rights were released negative impacts and enhance the positive gaining. We require all employees to comply in 2011 to provide further guidance on outcomes of our activities. By doing our job to with our policies. For information on our sup- implementing the “protect, respect, remedy” the highest ethical standards, complying with pliers, please see the case study on integrity framework. These Principles emphasize applicable host-country regulatory require- in the supply chain (page 36). ments, and respecting local cultures and operational due diligence: corporations should be aware of potential adverse impacts customs, we build supportive relationships in Addressing security concerns the communities where we operate. and implement prevention measures. We plan to formalize an Upstream Environmental, Security and respect for human rights can ExxonMobil’s upstream socioeconomic man- Socioeconomic, and Health Impact and should be compatible. ExxonMobil agement process covers: Assessment (ESHIA) Technical Requirement is committed to ensuring the security of • Risk assessment and management; in 2012, and to ensure that our upstream company personnel and operations in a manner that respects human rights and • Human rights; projects address any human rights impact assessment gaps that may exist. fundamental freedoms. • Community relations; Framework on Security and Human Rights. • Indigenous peoples; Providing human rights training. Our human rights awareness training program is based on We actively participate in the Voluntary • Cultural heritage and diversity; ExxonMobil guidelines, practices, and priorities. Principles on Security and Human Rights, • Land use and resettlement; a forum that provides for discussion and Training focuses primarily on employee • Economic development; and, information-sharing among extractive awareness, company policies and industry sector companies, governments, • Transparency and corruption. approaches, company resources, and our and nongovernmental organizations. These commitment to respect human rights. Each We address these issues by adhering to Voluntary Principles affi rm the constructive session also includes information on the corporate policies and expectations (page role that business can play in supporting and Voluntary Principles on Security and Human 32), complying with host-country regulatory advancing human rights and security. Rights, the requirements of our Framework requirements, applying universally recognized on Security and Human Rights, and imple- ExxonMobil’s Statement and Framework on principles, engaging with external groups menting the Framework in a given country. In Security and Human Rights helps implement (page 7), and building local economic capacity 2011, we continued our approach of provid- the Voluntary Principles. The Framework (page 38). ing human rights training to key affi liates. includes guidance on working with host In 2011, we revised our Upstream Our focus has been on training lead country government security personnel, instituting Socioeconomic Management Standard managers and certain staff. In 2011, such memoranda of understanding regarding host and expanded its application to all of the training was provided in fi ve countries; we government-assigned security personnel, upstream companies. The Standard pro- also delivered dedicated human rights training developing approaches for interacting with vides a set of best management practices to a broader scope of employees working in private security providers, and reporting and and minimum expectations for the upstream Papua New Guinea. putting in place recordkeeping templates. companies. We believe a consistent approach Approximately 79 percent of our private secu- In 2012, as we work to implement new processes helps our contractors, partners, and employ- rity personnel contracts include requirements and guidance under our revised Upstream ees effectively manage socioeconomic issues to address human rights concerns. Socioeconomic Management Standard, we and maintain our global license to operate. also plan to update our human rights training Establishing strong partnerships with the We used the recent update as an opportunity to refl ect changing international guidance and local community is the foundation of the to enhance the usability of the Standard, to reach a broader group of employees. Papua New Guinea liquefi ed natural gas incorporate progressing international (PNG LNG) project’s security strategy. We protocols and expectations, and expand Policies and labor practices. Our commitment have faced some security challenges as the application of the Standard across to human rights includes our workforce and construction continues. We address these ExxonMobil’s Upstream business. is supported by our Standards of Business challenges through the implementation of our Conduct, which is consistent with the spirit Security Plan, which is regularly monitored Respecting human rights and intent of the U.N. Universal Declaration and reviewed. Building on our experience Our approach to human rights is consistent of Human Rights and the International Labor in Papua New Guinea and other regions, with the policy framework outlined in the Organization (ILO) 1998 Declaration on ExxonMobil has implemented a range of 2008 report of John Ruggie, the U.N. Special Fundamental Principles and Rights at Work. physical security countermeasures and con- Representative on Business and Human tingency plans. Rights. That framework recognizes the 46 exxonmobil.com
Consultation with stakeholders We aim to help develop human, social, and economic capacity in a way that benefi ts people, communities, and our business. Achieving this goal requires collaborative partnerships and active consultation with a range of stakeholders. Our Best Practices in External Affairs (BPEA) initiative focuses on building positive external relationships and is our strategic planning and management tool for external affairs. It governs community awareness programs, government relations, and national content development. The BPEA process identifi es the specifi c needs, expecta- tions, and interests of host communities and PNG LNG project team member Marilyn Wingi distributes a community newsletter on the project. Effective aligns these needs with our community invest- stakeholder engagement means providing local groups a communication channel to voice concerns related ment efforts. to a project. Ensuring mutual understanding, trust, and respect in our stakeholder relationships During 2011, we strengthened security a specialized maritime safety and rescue means providing local groups and individu- measures at our PNG LNG project facilities training course in Brisbane, Australia. We also als with a communication channel to voice and worked to enhance police presence. To supported a course whereby Royal Papua and resolve concerns related to a develop- help build the skills of Papua New Guinea New Guinea Constabulary instructors trained ment project without fear of retribution. Our security personnel, selected team members line offi cers on the Voluntary Principles on Upstream Socioeconomic Management attended a Site Security Contact Conference Security and Human Rights. Standard includes provisions for establish- in Melbourne, Australia, while others attended ing a systematic and transparent grievance mechanism process.
Indigenous peoples. ExxonMobil is commit- STAKEHOLDER ENGAGEMENT ted to engaging with indigenous communities Papua New Guinea grievance mechanisms in a manner that is respectful of their cultures and customs. Through open consultation, we The PNG LNG project uses a grievance process managed by ExxonMobil affi liate, Esso work to understand and incorporate indig- Highlands Limited. We capture concerns and complaints from local communities and enous perspectives into project planning, manage them through a computer-based Information Management System (IMS). We design, execution, and ongoing operations. investigate and respond to every grievance received, tracking and recording all grievances Our approach is consistent with the prin- through fi nal closure. ciples of the ILO Convention 169 Concerning To reach those in the more remote areas of Papua New Guinea potentially affected by the Indigenous and Tribal Peoples in Independent project, we introduced a special grievance card. These cards record the same information Countries, the U.N. Declaration on the Rights of as the IMS, but can be easily used in the fi eld and sent back to the Port Moresby-based Indigenous Peoples, the International Finance Community Affairs department for processing. Corporation (IFC) Performance Standards on Environmental and Social Sustainability, and Sometimes, after careful analysis, we determine that a grievance relates to third parties the World Bank Operational Policy and Bank unrelated to the project. The Papua New Guinea government is working to place govern- Procedure on Indigenous Peoples. Our proj- ment offi cers in the fi eld to assist with such concerns. In other cases, we recognize an area ects and operations in Alaska, Canada, Papua for additional focus and work with the grievant to implement a remedy. New Guinea, and Sakhalin Island all involve As may be expected with a project of this working in communities of indigenous peoples. 2011 Percentage of Grievances Registered by Category at PNG LNG scale and complexity, and in a country with Often, the fi rst consultation with any group customary land rights, many community con- of indigenous people is to determine how Social Project cerns relate to compensation for land access. 9% 4% they prefer to be engaged. Each community Government Additionally, access to business develop- establishes its own preference for how often Misinformation 5% 9% ment and employment opportunities can be they meet with us, how long, and whom they Other Security 15% a source of economic-related grievances. choose to represent the community’s wishes. 1% This is particularly the case where onshore In Alaska, we established a working group pipelines are being installed. Many jobs Environment with the indigenous community in Kaktovik, Land 13% associated with pipeline construction require a village of about 300 residents located in 27% short-term, highly skilled labor. Local commu- the region of our North Slope Point Thomson Economic nities often object to the limited employment project. The working group, comprising 17% opportunities available to them as a result. leadership from Kaktovik and ExxonMobil, Community development projects are meets several times a year. At the same helping to address these types of concerns. time, we conduct community meetings, open to all residents, twice a year to provide 2011 Corporate Citizenship Report 47 project updates. At Kearl in Alberta, Canada, heritage sites and identifi cation, classifi ca- Imperial Oil consulted with the First Nations’ tion, and documentation of chance-fi nds. We Industry Relations Corporations to develop train earth-moving equipment operators and a Reclamation Planning Group. The planning employ spotters to help recognize and identify group is just one of several mechanisms for cultural heritage artifacts and conduct arche- seeking indigenous input at Kearl (page 10). ological salvage activities at sites discovered during pre-construction surveys. We work to respond to community concerns throughout the life cycle of a project or opera- Land use and resettlement. We respect tion. During exploration and development, property rights in the countries where we alter the project design where possible to we operate, including those of traditional respond to community concerns. In Papua land users. The IFC revised Performance New Guinea, we worked with community Standards, effective in 2012, requires clients members who practice subsistence fi shing to to obtain the free, prior, and informed consent preserve access to local fi shing areas during of indigenous peoples before initiating devel- jetty construction and modifi ed project plans opment activities on traditional lands. We are in order to avoid a popular fi shing reef. interested and engaged in the manner these A Fort Nelson First Nation elder shares information new IFC Standards will be implemented. about traditional territory near the Horn River project Once our operations commence, we work during a consultation with an Imperial Oil employee. to mitigate the risk of those operations on While the updated Upstream Socioeconomic Through consultation, we work to understand and local populations. For example, in Sakhalin, Management Standard includes consider- incorporate indigenous perspectives into project Exxon Neftegas Limited’s (ENL) main opera- ations for securing free, prior, and informed planning, design, execution, and operations. tions are within 20 kilometers of the Uilta, consultation, our goal is to obtain the consent an indigenous people of 350 representa- of local communities and other key impacted tives. For many centuries, the Uilta have stakeholders regarding our operations. In captured wild reindeer, domesticated them, practice, we strive for broad consensus and and migrated with the herds across northern seek to ensure participative consultation Sakhalin. To support operations on Sakhalin as a key part of our planning and operating Island, ENL built a bridge across Chayvo processes. Bay. Before the bridge was built, the reindeer We minimize involuntary resettlement through herders crossed the bay by boat while their project design; when resettlement is unavoid- reindeer swam. ENL now stops all traffi c to able, we seek to ensure the appropriate allow the herders to access the bridge on restoration of the livelihoods of displaced their annual reindeer drive. persons. In all cases when resettlement is We are sensitive to our local communities’ unavoidable (e.g., for our PNG LNG project), concerns about balancing their cultural we apply international best practice aligned heritage with the need for economic devel- with the IFC’s Performance Standards, in opment, even after our operations have conjunction with applicable host-country ceased. Wherever we work with indigenous regulatory requirements. peoples, we support both local employment When physical and economic displacement initiatives and cultural heritage programs occurs, we develop and implement resettle- through national content and strategic com- ment action plans that include landowner munity investments, respectively. In Horn consultation, and surveying and mapping of River, Canada, we encourage local supplier housing structures, gardens, and other assets. development through procurement and safety In Papua New Guinea, we negotiate appropri- workshops, while supporting the Annual ate compensation with affected landowners Summer Gathering and Trappers’ Rendezvous or users in the presence of a third-party law as part of the First Nations’ efforts to pass fi rm provided by the project. The resettled traditional knowledge from one generation to landowner or user then identifi es a new home the next. At the same time that we train and and garden site. They are provided assistance hire local workers and suppliers in Papua New to re-establish a household and gardens at Guinea, we work to preserve the country’s the new location, including the introduction of signifi cant cultural heritage. To this end, we improved agricultural techniques. We conduct follow a Cultural Heritage Management Plan livelihood restoration activities and monitor for our project activities and implement a cul- and evaluate progress for two years against a tural heritage tracking system, which collates pre-resettlement baseline. Thus far in Papua and manages data collected since 2009. The New Guinea, 17 locations were identifi ed Cultural Heritage Management Plan describes where resettlement is deemed necessary. procedures for pre-construction surveys and the protocol for managing chance-fi nds of heritage value. We provide cultural heritage awareness and chance-fi nds training for Explore enhanced web content at exxonmobil.com/citizenship applicable project personnel, including infor- mation on types of Papua New Guinea cultural 48 exxonmobil.com
ExxonMobil’s integrated Operations Integrity: Singapore facilities produce the base materials Delivering Value in Downstream found in products used by millions of consumers and Chemical Operations every day all over the world.
Employees and contractors at our integrated manufacturing complex in Singapore focus on effi cient, safe, and environmentally responsible operations by using worldwide expectations established through ExxonMobil’s Operations Integrity Management System (OIMS). This site tour captures operations integrity in action, including the challenges of integrated manufacturing.
Overview of the Singapore Safety, health, and the Contractor safety. OIMS Element 8— integrated facility workplace Third-Party Services—requires the facility to evaluate and select third-party services ExxonMobil has operated in Singapore for Process safety. OIMS Element 2—Risk using criteria that include an assessment over 40 years. Integration of our refi nery Assessment and Management—requires of capabilities to perform work in a safe and chemical facilities allows us to upgrade the facility to manage process safety at the and environmentally sound manner. each molecule to its highest value as site through the identifi cation, mitigation, we leverage the advantages of a global and elimination of hazards and risks. ExxonMobil employees promote their functional organization and co-located safety culture every day. While 2011 ExxonMobil uses a comprehensive risk manufacturing. The 605-thousand-barrel- was not an incident-free year, the site assessment process to identify hazards, per-day refi nery produces primarily implemented a series of safety initiatives assess risk levels, and follow up to gasoline, diesel, jet fuel, propane, naphtha and remains dedicated to the goal of ensure risk management decisions are base oil, asphalt, and wax, and serves achieving zero injuries. The application of implemented. With the philosophy of “we as the chemical plant’s primary source OIMS principles drives expectations for cannot fi x what we do not know,” empha- of feedstock. The chemical plant in turn safe performance of our employees and sis is placed on a healthy risk discovery produces the basic building blocks for contractors. process. Hazard identifi cation comes from high-performance plastics and specialty multiple sources, including operational unit This petrochemical expansion shows how chemicals used to make consumer goods hazard reviews, equipment inspections, all workers share ExxonMobil’s safety such as clothing, upholstery, diapers, food fi eld audits, learnings from incidents and values on-site. In mid-2010, the project’s storage, and cell phones. near misses, and employee and contrac- on-site workforce peaked at more than Our ongoing, multi-billion-dollar chemical tor input. Workers also undergo on-site, 22,000. Employees and contractors, plant expansion in Singapore is the largest hands-on training to ensure they can working side-by-side, came from nearly in the history of ExxonMobil Chemical and perform the work competently and safely. 30 countries, spanning six continents, will more than double the plant’s capacity to And, we focus on effective procedures, and speaking more than eight languages. satisfy Asia Pacifi c’s growing petrochemical including best practices for higher-risk Despite these challenges, the expansion demand. When complete, Singapore will be activities, such as start-up of operations, project workers achieved about 64 million ExxonMobil’s highest capacity integrated which is a key area of emphasis as we cumulative hours worked with no lost-time refi ning and chemical complex. bring new facilities online. incidents at the end of 2011. 2011 Corporate Citizenship Report 49
Employees and contractors are achiev- wastewater treatment unit will also use a In addition to addressing community ing safety results through programs membrane bioreactor to treat wastewater, concerns, fl aring reductions allow us to implemented from the start of the resulting in high-quality effl uent that can decrease GHG emissions and effi ciently petrochemical expansion. An on-site be recycled and used as cooling water. recover our process streams. We plan Safety Training Center helps workers meet to continue evaluating fl aring sources performance expectations by helping Managing climate change risks and analyzing system defi ciency items to them understand hazards and safe work further reduce fl aring in 2012. OIMS Element 6 also requires the busi- practices. Workers must attend and pass ness to establish goals for environmental an Enhanced Safety Orientation Course performance, including greenhouse gas that includes modules on safety induc- VIGNES SWAMINATHAR (GHG) emissions. The facility must identify tion and oil and petrochemical safety. We ENERGY LEADER, alternatives, if applicable, and employ envi- SINGAPORE REFINERY use safety leading indicators to steward ronmental improvement initiatives. safety performance. Also, employees and I start my day by Reducing energy consumption is a part contractors attend events, such as the reviewing information of operations integrity. Projects executed project’s yearly safety carnival, to refresh from the data visualiza- by Singapore’s Energy Special Emphasis safety fundamentals. tion program and shift Team saved approximately $4.5 million We recognize safety challenges will arise as superintendent reports in 2011. Since 2002, we have achieved a the site moves from construction to opera- to understand the previous day’s 16 percentage-point reduction in energy tions. Our detailed execution plans prepare operations. This information is used to intensity. During 2012, we plan to reduce us to address these challenges in a disci- identify issues related to energy opti- this by another 1 percent. plined manner, and uphold our commitment mization and helps us propose steps to safety in every decision we make. The fl are system at the Singapore’s inte- to improve our performance. Managing grated site serves as a safety relief valve for energy projects can be challenging, Environmental performance unplanned interruptions, such as a loss of but it is a fascinating role. I interface power or the plant being unable to process with engineers from different func- OIMS Element 6—Operations and or refi ne recovered materials. In 2010, tions to determine the optimal energy Maintenance—requires operation of a cross-functional fl are reduction team projects. My role requires long-term facilities within established parameters enhanced fl are monitoring and utilization, planning and looking at the “bigger, and according to regulations, calling for and revitalized the fl are gas compressor future picture,” with results often not effective procedures, structured inspec- system. Flare unit engineers monitor and visible in the near term. But it is always tion and maintenance programs, reliable troubleshoot the fl are system daily. Site fulfi lling to see what we’ve achieved equipment, and qualifi ed personnel to con- management encourages fl aring reduction after many months of planning. Not sistently execute procedures and practices. goals and incorporates fl aring topics into only do we generate signifi cant energy Singapore is natural-resource constrained, daily employee operational briefi ngs. savings for the plant, but I’m also which poses operational challenges for land happy to be part of the larger effort to The refi nery’s 40-percent fl are reduction use, energy effi ciency, water consump- help reduce our emissions and envi- in 2010 versus 2009 was equivalent to tion, and air emissions. ExxonMobil has ronmental footprint. a 14,700 metric ton reduction of carbon successfully addressed these challenges dioxide (CO2). In 2011, the site achieved a through OIMS by focusing on fl awless fl are reduction equal to 7800 metric tons operations and continuous improvement. of CO2, or 32 percent, compared with Built primarily on reclaimed land, the 2010. At the chemical plant, we reduced chemical plant generates the majority of fl aring nearly 50 percent since 2007 and its electricity and steam on-site, mostly 12 percent from 2010. through cogeneration. Once online, the pet- rochemical expansion is expected to meet both plants’ steam and electricity needs through additional cogeneration capacity.
The chemical plant’s third-party vendors assist in reusing solid carbon waste. In 2011, instead of disposing it into Singapore’s limited landfi lls, we sent about 6000 metric tons, or 30 percent of carbon waste, for reuse, mainly for energy recovery purposes.
Freshwater is scarce in Singapore, so we reduce its use on-site through innova- tive measures. In 2011, we completed a The addition of a second seawater intake system for the petrochem- world-scale petrochemi- cal facility in Singapore ical expansion. The system will reduce to our existing integrated potable water consumption and our use of operations will help meet water treatment chemicals. The project’s increasing demand in Asia. 50 exxonmobil.com
IPIECA/GRI Content Index Our corporate citizenship reporting was guided by the International Petroleum Industry Environmental Conservation Association/American Petroleum Institute (IPIECA/API) Oil and Gas Industry Guidance on Voluntary Sustainability Reporting (2010). This report also cross-references the Global Reporting Initiative (GRI) G3.1 Sustainability Reporting Guidelines. These standards can be downloaded at ipieca.org and globalreporting.org.
Reporting Overview IPIECA /API GRI Where Reported Letter from the Chairman and CEO 1.1 1 About ExxonMobil 2.1, 2.2, 2.3, 2.5, 2.8, 4.8, EC1, EC9 2-3 The Outlook for Energy: A View to 2040 E3 1.2, EC2 4-5 2.4, 2.6, 3.1, 3.3–3.6, 3.9 (GRI, IPIECA), inside front cover, 6, 50, Report Philosophy and Materiality 3.12, 3.13, 4.17 inside back cover, back cover Engagement 2.8, 3.2, 4.4, 4.14-4.16 7
E1, E2, E4, E6, E7, E8, E9, E10, HS3, 3.7–3.11, EC1, EN8, EN13, EN16, Performance data HS5, SE4, SE15, SE11, SE14, SE13, EN20, EN22, EN23, EN30, LA1, LA2, 8-9 SE17, SE7, SE9, SE10 LA7, LA13, HR2, SO6
4.16, 4.17, EN8, EN13, EN14, EN18, Operations Integrity: E1, E5, E6, SE1, SE2 10-11 Developing Unconventional Resources at Kearl SO9, SO10
Citizenship Focus Areas IPIECA /API GRI Where Reported Environmental Performance Environmental stewardship through responsible 2.10, 4.8, 4.16, 4.17, DMA-EN, SO1, 13, 18 management SO10 Biodiversity and ecosystem services E5 4.12, EN11, EN12, EN13, EN14, EN15 13-16 Hydraulic fracturing SE1 4.16, 4.17, EN26, SO9, SO10 14 Freshwater management E6 EN8, EN9 15 Spill performance E8 EN23 15-16 Emissions and waste E7, E10 EN20, EN22, EN28, EN30 16-17 Site remediation EN13 19 Case Study: Technology E2, HS4 EN5, EN6, EN18, EN26 20-21 Managing Climate Change Risks 3.9, EN3, EN5, EN7, EN16, EN18, EN6, Mitigating GHG emissions in our operations E1, E2, E4 23-24 EN30 Developing cutting edge technology E2, E3 EN6, EN18 24 Encouraging responsible product use EN6, EN26 24 Public policy debate SE14 1.2, EC2, SO5 24-25 Safety, Health, and the Workplace Safety, security, and health management DMA-LA 27 Personnel safety HS1, HS3, HS5 4.8, LA7 27-28 Product stewardship and safety HS4 4.11, 4.12, DMA-PR, PR1, PR3 28-29 Emergency response and preparedness E8, HS5 4.11, EN23 28 Employee health HS2 LA8 29 DMA-LA, LA1, LA2, LA3, LA12, LA13, Employment policies and practices SE15, SE16 30-31 LA14, EC3 Corporate Governance Board of Directors 4.1, 4.2, 4.3, 4.4, 4.5, 4.7, 4.9, 4.10, LA13 33-34 Shareholder relations 4.4, 4.16, 4.17 34 Ethics SE11, SE12, SE18 SO2, SO3, SO4 34-35 Global management standards and approaches 4.8, 4.11, 4.12, LA10 35 Political advocacy and contributions SE14 SO5, SO6 35 Case Study: Integrity in our Supply Chain SE7, SE9, SE12 EC6, HR2,HR5, HR6, HR7 36-37 Economic Development Contributing to economic growth DMA-SO, EC9, 4.12 39 Transparency SE13 4.12, 4.13 39 National content SE1, SE5 4.8, DMA-SO 39-40 Workforce development SE17, SE6 EC7, LA10, LA11 40-41 Supplier development SE7 EC6 41 Strategic community investments SE4, SE5 EC1, EC8, EC9, LA8 42-43 Employee volunteerism and giving EC1, EC8 43 Human Rights and Managing Community Impacts Community impacts and relationships SE1, SE2, SE3 4.8, DMA-SO, SO1 45 4.8, 4.12, 4.13, DMA-HR, HR2, HR3, Respecting human rights SE8, SE9 45 HR5, HR6, HR7 Addressing security concerns SE10 4.8, 4.12, 4.13, HR2, HR8 45 Consultation with stakeholders SE1, SE2, SE3, SE5 4.8, 4.12, SO1, HR9, HR11 46-47 Operations Integrity: Delivering Value in Downstream E2, E4, E6, E10, HS5 EN5, EN8, EN18, EN22 48-49 and Chemical Operations
DMA: Disclosure on Management Approach. GRI indicators in italics are partially reported. Indicators not in italics are fully reported, but may not be fully reported in individual sections of this report. Environmental Resources Management, Inc. (ERM) reviewed ExxonMobil’s 2011 Corporate Citizenship Report against the International Petroleum Industry Environmental Conservation Association/ American Petroleum Institute (IPIECA/API) Oil and Gas Industry Guidance on Voluntary Sustainability Reporting (2010) and the Global Reporting Initiative (GRI) G3.1 Sustainability Reporting Guidelines. ERM found that the report contents address the indicators shown in this index. ASSURANCE STATEMENT
Terms of Engagement. This Assurance To form our conclusions, the assurance safety, health, and environmental indica- Statement has been prepared for Exxon was undertaken as a sampling exercise and tors that are useful for assessing corporate Mobil Corporation. covered the following activities: performance and reporting information Lloyd’s Register Quality Assurance, Inc. • Reviewing the reported information to consistent with IPIECA/API Guidance. (LRQA) was commissioned by Exxon Mobil confi rm the inclusion of all core safety, health It should be noted that: Corporation (ExxonMobil) to assure its and environmental performance indicators • Processes were in place to ensure that processes used to produce the Corporate referenced in the IPIECA/API Guidance; sites contributing to core safety, health, Citizenship Report for the calendar year • Reviewing the documented reporting and environmental metrics understood 2011 (hereafter referred to as “the CCR”). requirements against the applicable industry corporate reporting obligations and were Our terms of engagement were to review guidelines to assure consistency of scope, included in corporate safety, health, and the processes for reporting safety, health, defi nition, and reporting for each of the environmental reporting; and environmental core IPIECA performance relevant indicators; • Methods used for calculating each metric indicators and ExxonMobil-selected additional • Reviewing the reporting processes at were defi ned clearly and communicated; indicators. Verifying the accuracy of data and Headquarters and at each of the functional • Processes were in place to ensure that information was not included in the assurance. business levels to evaluate the processes the quantitative indicators were checked for LRQA has reviewed ExxonMobil’s reporting used by ExxonMobil to assure completeness, completeness, consistency, and accuracy; processes since 2005 (for the 2004 CCR). consistency, and conformance to reporting • Responsibility for annually reviewing and Management Responsibility. ExxonMobil’s requirements across its global operations; updating reporting guidelines was clear, management was responsible for prepar- • Reviewing the data-reporting processes with improvement in methodology regularly ing the Report and for maintaining effective at a sample of 11 operating sites to assess undertaken; internal controls over the data and informa- local understanding and implementa- • Guidelines for GHG reporting were tion disclosed. LRQA’s responsibility was to tion of reporting requirements. Sites consistent with, and specifi cally refer to, carry out an assurance engagement on the selected were Antwerp Refi nery, Belgium; the API Compendium for GHG Emissions Report in accordance with our contract with Singapore Joint Site (refi nery and chemical Methodologies for the Oil and Gas Industry ExxonMobil. plant), Singapore; Upstream Production, (February 2004); and, Germany; Baton Rouge Plastics Plant, Ultimately, the Report has been approved by, • Active engagement with external Louisiana; Pensacola Specialties and remains the responsibility of ExxonMobil. stakeholders provided information for Elastimers Plant, Florida; and lubricant LRQA’s Approach. Our verifi cation has determining material issues. facilities in Wakayama, Japan; Notre Dame been conducted against the requirements of de Gravenchon, France; Taichung, Taiwan; LRQA’s Recommendations. Observations LRQA’s Report Verifi cation procedure. The Serviburnu, Turkey; Tianjin, China; and and areas for potential improvement objectives of the assurance engagement Taicang, China; were provided in a report to ExxonMobil were to verify the integrity of the processes Management. These observations do not • Reviewing the stakeholder engagement used to determine material issues for report- affect our conclusions. ing, and to evaluate consistency with the processes at Headquarters; and, following industry guidelines: • Reviewing the processes used to • IPIECA/API, Oil and Gas Industry aggregate the data and information at the Guidance on Voluntary Sustainability corporate level for inclusion in the Report. Reporting (2010); and, Level of Assurance. The opinion expressed Andrea M. Bockrath On behalf of Lloyd’s Register Quality • API, Compendium of Greenhouse Gas in this Assurance Statement has been Assurance, Inc. (GHG) Emission Estimation Methodologies formed on the basis of a reasonable level 30 March 2012 for the Oil and Gas Industry (February 2004). of assurance. LRQA’s Opinion. Based on LRQA’s 1330 Enclave Parkway, Suite 200 approach, it is our opinion that ExxonMobil’s Houston, Texas 77077 reporting system was effective in delivering LRQA Reference: UQA0110889
This document is subject to the provision below: This Assurance Statement is only valid when published with the Report to which it refers. Lloyd’s Register Quality Assurance Limited, its affi liates and subsidiaries and their respective offi cers, employees or agents are, individually and collectively, referred to in this clause as the “Lloyd’s Register Group.” The Lloyd’s Register Group assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever provided, unless that person has signed a contract with the relevant Lloyd’s Register Group entity for the provision of this information or advice, and in that case, any responsibility or liability is exclusively on the terms and conditions set out in that contract. Because of the inherent limitations in any internal control, it is possible that fraud, error, or noncompliance with laws and regulations may occur and not be detected. Further, the verifi cation was not designed to detect all weakness or errors in internal controls so far as they relate to the requirements set out above, as the verifi cation has not been performed continuously throughout the period and the verifi cation carried out on the relevant internal controls was on a test basis. Any projection of the evaluation of control to future periods is subject to the risk that the processes may become inadequate because of changes in conditions, or that the degree of compliance with them may deteriorate. The English version of this statement is the only valid version. The Lloyd’s Register Group assumes no responsibility for versions translated into other languages. Corporate Headquarters 5959 Las Colinas Blvd. Irving, Texas 75039-2298 exxonmobil.com
Note: Exxon Mobil Corporation has numerous affi liates, with many names that include ExxonMobil, Exxon, Mobil, and Esso. For convenience and simplicity, those terms and terms such as Corporation, company, our, we, and its are sometimes used as abbreviated references to specifi c affi liates or affi liate groups.
ExxonMobil is a publicly traded company. The New York Stock Exchange (NYSE) is the principal exchange on which Exxon Mobil Corporation common stock (symbol XOM) is traded. Worldwide, ExxonMobil markets fuels and lubricants under three brands.