2007 Corporate Citizenship Report table of contents about this report
1 Corporate citizenship at ExxonMobil This report was produced in accordance with the reporting guidelines and indicators of the International Petroleum Industry Environmental Conservation Association (IPIECA) and the 2 CEO statement American Petroleum Institute (API) Oil and Gas Industry Guidance on Voluntary Sustainability 4 Engagement activities Reporting (April 2005). The majority of these indicators are also consistent with the indicators used by the Global Reporting Initiative (GRI) in the Sustainability Reporting Guidelines 8 Summary of citizenship activities Version 3.0 (G3). 10 Outlook for energy Our 2007 Corporate Citizenship Report describes our efforts in a range of areas relating to 12 Business overview the financial, environmental, and social performance of the Corporation. The report is intended for anyone interested in learning more about our corporate citizenship. 14 Environmental performance We address our corporate citizenship accomplishments, the challenges we face, and our 26 Workplace future plans to meet these challenges. In addition to describing our approach to corporate 34 Corporate governance citizenship, including our engagement activities and performance in the most material issues to our business operations, the report also provides an overview of our energy outlook to 2030, 40 Transparency and human rights which shapes our corporate citizenship challenges. In this year’s report, we are interpreting 44 Community development trends in our citizenship performance data in terms of our company operations. Additional information about our company, our operations, and our management systems can be found 52 IPIECA/GRI content index on our Web site (exxonmobil.com).
We value your feedback on this report and our performance in addressing financial, environmental, and social issues. Comments for improvement received for the 2006 Corporate Citizenship Report were incorporated into this report. We solicited feedback through a variety LRQA Assurance Summary Statement. of mechanisms, including our corporate reporting Web site (exxonmobil.com/citizenship), Lloyd’s Register Quality Assurance, online surveys, business-reply cards, and interviews with opinion leaders from nongovernmental Inc. (LRQA) believes the ExxonMobil organizations (NGOs), academia, and financial institutions. Business for Social Responsibility reporting system is effective in deliver- (BSR), an advisory organization on corporate social responsibility of which we are a member, ing safety, health, and environmental also provided a detailed review of our 2006 report. indicators, which are useful for assessing corporate performance and for reporting For additional information and to provide comments, please contact: information consistent with the IPIECA/ Ms. Noa Gimelli API Guidance. For the full assurance Corporate Citizenship statement, see the inside back cover. ExxonMobil 3225 Gallows Road Fairfax, VA 22037 E-mail: [email protected]
On the cover: The design represents the five material areas discussed within the report (see our materiality analysis on page 6).
2007 Corporate Citizenship Report
Note: This report covers ExxonMobil and all of its corporate subsidiaries under the brands ExxonMobil, Exxon, Mobil, and Esso. The report reviews our corporate citizenship performance as of December 31, 2007. Most environmental data are reported in metric units. Financial information is reported in U.S. dollars. corporate citizenship report / 1 corporate citizenship at ExxonMobil
ExxonMobil’s primary role—and most important benefit to society—is to safely provide reliable and affordable supplies of energy to people around the world. Doing this well is essential to improving standards of living, and we are committed to doing so in a financially, environmentally, and socially responsible manner.
a closer look
Our business model incorporates high decision-making processes. We also standards of integrity, legal compliance, actively encourage our employees at all Standards of Business Conduct governance practices, and management levels to get involved by making financial control systems, and is key to achieving contributions and volunteering their time sustainable performance and good corporate and services. Controls citizenship. How we achieve business results Integrity Operating ethically and responsibly is Management everywhere we operate is as important as System embedded in our business culture through the results themselves. Operations Integrity our Standards of Business Conduct, and Management At ExxonMobil, corporate citizenship is is monitored, enforced, and improved System (OIMS) embedded in our business model and upon through our globally deployed effectively integrates good corporate gover- systems, which include the Controls Integrity nance, safety, and environmental and social Management System, Operations Integrity responsibility into all aspects of our global Management System (OIMS), Best Practices business. When we promote stable operating in External Affairs (BPEA), and Framework Managing corporate citizenship environments, sound governance systems, on Security and Human Rights. and skilled workforces, we promote our Our Standards of Business Conduct Our corporate citizenship activities also help own success. provide each employee with guidelines reduce known barriers to development in on ethics, conflicts of interest, non- We take our commitment to corporate countries where we operate, which helps discrimination, and harassment in citizenship seriously, and we apply the create stability and progress. We address the workplace. Our Controls Integrity same consistency, discipline, and ingenuity development challenges by delivering Management System and Operations in meeting our obligations as we do in affordable energy; creating jobs; generating Integrity Management System (OIMS) how we manage our financial resources. revenues for governments; supporting social form the framework by which we At ExxonMobil, being active and involved investments and philanthropic activities in manage safe, reliable, and ethical citizens in the communities where we live the areas of local capacity, education, and operations globally as well as corporate and operate begins at the top. Our corporate health; and participating in public policy citizenship issues. citizenship commitments are governed by dialogue and advocacy activities. This allows Look for this icon to find out how the Board of Directors and its Public Issues, us to have a positive impact on the com- we integrate corporate citizenship Board Affairs, Contributions, Compensation, munities where we operate and is consistent throughout our operations. and Audit Committees. We expect our with the objectives of the United Nations employees to integrate corporate citizenship Millennium Development Goals. into their work-related activities and 2 / corporate citizenship report
CEO statement a long-term perspective
environmental workplace performance Leading the industry with our Conducting our business in a workforce safety and health manner that is protective of performance as a result of our the environment and addresses high standards for managing our greenhouse gas emissions operations worldwide
See page 14 See page 26
Rex W. Tillerson Chairman and CEO
At ExxonMobil, we know our business has a direct leading global corporate citizen. We also have a responsibility to listen. We incorpo- impact on many lives. The oil and gas we produce— rate input from shareholders and others into our approach for addressing corporate and the technologies we have developed—make it citizenship issues. possible for millions of people around the world to light our commitment and heat their homes, fuel their vehicles, and power in five areas their businesses. Our 2007 Corporate Citizenship Report details ExxonMobil’s commitment in five Energy helps economies grow and Companies like ours play an important role areas: environmental performance, work- individuals prosper, and is essential to in meeting the world’s energy needs. Meeting place, corporate governance, transparency modern society. Fulfilling this need for these needs is a tremendous challenge. and human rights, and community develop- energy is the foundation of our business and Today, the world uses the energy equivalent ment. In this year’s report, we share our a source of motivation for our company’s of approximately 250 million barrels of oil successes in these areas and highlight 81,000 employees. every day. By 2030, as populations grow and challenges that remain. operating responsibly economies expand, global energy demand s Environmental Performance. Companies is expected to be about 40 percent higher are responsible for managing the environ- ExxonMobil is committed to operating in a than it was in 2005. mental impact of their operations. The responsible manner toward all whose lives ExxonMobil is focused on helping meet issue of greenhouse gas emissions is we touch—our employees, our shareholders, global energy demand while also meeting being considered by a broader community our customers, and the communities in our responsibilities as a corporate citizen. that includes not only energy companies, which we do business—and our shared As the world’s largest publicly traded environmental groups, and scientists, but also environment. This commitment is an international energy company, we bring a energy consumers, policy makers, and the integral part of our decisions. We know unique perspective to discussions on how media. ExxonMobil supports an increased that operating responsibly wherever we best to meet the world’s energy needs, awareness of how energy shapes our world do business makes ExxonMobil a better and we recognize our important role as a as well as discussions on policies that seek company—a better employer, a better to reduce greenhouse gas emissions. neighbor, and a better corporate citizen. corporate citizenship report / 3
corporate transparency community governance and human rights development Sustaining our commitment to high Helping to establish transparency Supporting community programs ethical standards, legal compliance, agreements to disclose government that reduce known barriers to and operations integrity through revenues in the countries in which development through strategic our company-wide Standards of we have significant investments investments in health, education, and Business Conduct See page 40 opportunities for women and girls See page 34 See page 44
We continue to take action to reduce green- Transparency and Human Rights. In looking forward house gas emissions in our operations and s this report, you will find a discussion of to develop new technologies that enable Meeting the world’s energy needs—safely, our efforts to help establish transparency more efficient energy use. We are also responsibly, and reliably—has been agreements with governments of countries committed to participating in the continuing ExxonMobil’s mission for more than in which we have significant investments public dialogue on this important issue. 125 years. We approach this commitment as well as our efforts to address corruption with discipline, a long-term view, and a through our support of the Extractive s Workplace. We have been leading the results-oriented attitude. industry with our low incident rates for Industries Transparency Initiative. workforce safety and health. In 2007, we ExxonMobil strives to be the world’s premier Community Development. ExxonMobil achieved our best-ever safety and health s petroleum and petrochemical company. We believes in creating a positive and lasting performance. We remain committed to are proud of our financial and operating re- social impact in the countries in which we long-term capacity building in the countries sults, but we are equally proud of our culture operate. Our operations strengthen economic where we operate. Our approach to national of integrity and commitment to act in a safe growth through investment, employment, content development at the local level and responsible manner toward employees, and the purchase of local goods and serv- includes investments, creation of jobs, the environment, and local communities. And ices. We focus on supporting community and the transfer of knowledge and skills to we look forward to building upon this record programs that reduce known barriers to employees, contractors, and suppliers. of accomplishment. The same strengths that development. Our strategic community have enabled our past achievements prepare investment activities include enhancing s Corporate Governance. ExxonMobil is us to succeed in the future. committed to sound corporate governance health conditions, improving education, and and high ethical standards wherever we con- expanding opportunities for women and girls. Helping meet the world’s growing energy duct business. Our company-wide Standards These investments help to alleviate poverty, needs in a responsible way is a challenge of Business Conduct provide our workforce promote social progress, and increase ExxonMobil is proud to take on. across all operations with guidelines on economic growth. ethics, conflicts of interest, nondiscrimi- nation, and harassment in the workplace. Rex W. Tillerson Chairman and CEO 4 / corporate citizenship report
engagement activities communication and engagement
We engage with the communities in which we operate Engagement is a key component of our corporate citizenship strategy. It helps us as well as with governments, nongovernmental identify those issues that are most material to our business operations, which we discuss organizations (NGOs), shareholders, customers, in this Corporate Citizenship Report (see our suppliers, employees, and others to help identify materiality analysis on page 6). and manage issues of mutual concern and interest. Our engagement takes many forms, including internal and external dialogues, e-mail com- We do this with the goal of fostering understanding, munications ([email protected]), publications such as the Corporate trust, and cooperation on key issues. Citizenship Report, and content on our Web site (exxonmobil.com).
broad-based engagement activities
~2.5 36 437 speaker million countries with communities governments governments forums in shareholders individuals exploration and and NGOs production 24 ~2000 acreage countries institutions
Engaging with governments Incorporating community engagement Interacting with institutional to effectively advocate our activities into all aspects of our business to and individual shareholders to company’s position on issues share information on operational processes discuss our performance and listen of mutual interest and listen to external concerns to concerns throughout the year
s .EGOTIATION AND DIALOGUE WITH HOST COUNTRIES s Community consultation and feedback s Meetings with shareholders, including the s 3HARING OF RELEVANT INFORMATION WITH GOVERNMENTS mechanisms embedded in our Best Practices Annual Meeting of Shareholders and regulators on legislative impacts in External Affairs (BPEA) s 3HAREHOLDER DIALOGUES AND SHAREHOLDER MAGAZINE s 0ARTICIPATION IN THE Extractive Industries s %NVIRONMENTAL 3OCIAL AND (EALTH )MPACT s 0ROXY STATEMENT Assessments (ESHIAs) for new projects to Transparency Initiative (EITI) s 1UARTERLY EARNINGS COMMUNICATIONS Summary incorporate community concerns s 0ARTICIPATION IN THE DIALOGUE ON THE Voluntary Annual Report, and Financial and Operating Review s #OMMUNITY ENGAGEMENT IN EMERGENCY Principles on Security and Human Rights s 3ECURITIES AND %XCHANGE #OMMISSION lLINGS preparedness response planning and drills s -EETINGS WITH ANALYSTS INCLUDING THE Example: We continued working with the s #ITIZENSHIP %NGAGEMENT &ORUMS TO SHARE annual meeting governments of Azerbaijan, Equatorial Guinea, perspectives with NGOs, socially responsible Kazakhstan, Madagascar, and Nigeria to help investors, academics, and think tanks throughout s #ORRESPONDENCE WITH NON EMPLOYEE DIRECTORS implement the Extractive Industries Transparency the United States, Europe, Asia, and Africa individually or as a group Initiative. This work included drafting language s 3PEAKER FORUMS AT UNIVERSITIES COMMUNITY Example: In 2007, we held 18 meetings with for memorandums of understanding, developing groups, and business organizations worldwide reporting templates and guidelines, defining terms shareholder groups, including the California s 0ARTNERSHIPS WITH LOCAL .'/S AND ASSOCIATIONS of reference, giving presentations, and participating Public Employees’ Retirement System (CalPERS), in workshops. California State Teachers’ Retirement System Example: Starting in 2006 and continuing in (CalSTRS), Ceres, the Episcopal Church, F&C 2007, we established the Chad-Cameroon land Asset Management, Interfaith Center on Corporate use mitigation action plan to address issues of Responsibility (ICCR), Investor Network on Climate increased land requirements. As part of the project, Risk (INCR), the Needmor Fund, Rockefeller Family multiple and ongoing consultations have been Fund, Teachers’ Retirement System of the City of conducted with representatives from impacted New York, and Walden Asset Management. communities in the oil field area. corporate citizenship report / 5
To be effective, our outreach efforts must be s Energy security and environmental s Community development: Through feed- built on honest, transparent, accurate, and matters, including climate change: Through back and dialogue with local and international timely information. Over the past year, our speeches and dialogues around the world, we NGOs, we tailor our international corporate engagement activities covered a wide range are presenting our views on energy security giving to meet the needs of the communities of topics, including environmental, gover- and climate change, and we are working to re- in which we operate (see page 44). nance, and social issues. These efforts have duce our emissions, improve the efficiency of In 2008, we plan to increase the frequency helped ExxonMobil shape our approach to our consumers’ use of energy, and develop with which we hold meetings and discussions addressing challenges in our operations. new energy technologies (see page 15); with third parties to supplement our In 2007, examples of topics raised that we s Human rights: Through ongoing par- Citizenship Engagement Forums, an found to be most relevant to ExxonMobil ticipation and involvement in the Voluntary expansion of our Opinion Leader Dialogues. and that are incorporated into our business Principles on Security and Human Rights, we Forums are held to increase understanding plans included: developed our Framework on Security and of the varied views of the issues, and the Human Rights and are also initiating human company’s positions and actions. rights training (see page 42); and,
~10 million customersdrivers per day suppliers~170,000 employees ~81,000 purchased fuel at total suppliers global workforce retail chains
Communicating with our Ongoing day-to-day Engagement between our customer base, including end-users contact and negotiation workforce and ExxonMobil of our products as well as industrial with suppliers worldwide management through our open-door and wholesale customers communication policy s Customer feedback and customer care programs s ,OCAL SUPPLIER TRAINING IN NEGOTIATION s %MPLOYEE FORUMS s #USTOMER SERVICE ORGANIZATIONS AND SURVEYS business planning, and bidding s %MPLOYEE PARTICIPATION IN VARIOUS COMMITTEES s #USTOMER SEMINARS AND SYMPOSIA EVENTS s .ATIONAL CONTENT DEVELOPMENT s $IVERSITY MANAGEMENT COUNCILS s /NGOING BUSINESS TO BUSINESS COMMUNICATIONS s Supplier diversity program targeting women- s %MPLOYEE DIVERSITY NETWORK GROUPS and minority-owned businesses and interactive conference calls s 5NION REPRESENTATION s &INANCIAL SUPPORT TO ADVOCACY GROUPS FOR s %MPLOYEE HUMAN RESOURCES INTRANET SITES Example: In 2007, Customer Care for ExxonMobil local businesses and women- and minority- handled more than 60,000 inquiries from North owned enterprises s #ONlDENTIAL EMPLOYEE HOTLINE American customers. These included a wide range of topics such as requests for service station Example: Supplier training programs were Example: In 2007, members of the company’s information, customer experience feedback, and conducted in conjunction with locally developed Management Committee hosted 32 employee general inquiries about Exxon Mobil Corporation. enterprise centers in Angola and Chad. In addition, forums in the United States and 28 abroad. Forums other businesses were mentored through our allow employees to engage directly with senior microfinance and microcredit programs on Sakhalin management on a range of issues. This year, issues Island, Russia. In Chad, more than 200 suppliers included financial, safety, and environmental per- have been trained in the use of the ExxonMobil formance across business lines; the company’s electronic bidding system. We also provided future plans; and ExxonMobil’s position on global dedicated training on ExxonMobil processes climate change. and systems to suppliers in Nigeria. 6 / corporate citizenship report
engagement activities materiality analysis
At ExxonMobil, we use materiality analysis to identify The materiality analysis helps us to ensure that the content of the 2007 Corporate social and environmental challenges and opportuni- Citizenship Report is useful to readers, promotes better internal understanding of ties that are important to external audiences, and to corporate citizenship issues, and shapes our prioritize them in our business strategies. ongoing approach to corporate citizenship by targeting rapidly emerging issues and A combination of external stakeholder By linking our nonfinancial performance with aligning these with our business strategies. engagement and internal strategic alignment our business strategies, we focus our efforts We discuss these material issues in the con- ensures that this process is transparent on longer-term value drivers that contribute text of ExxonMobil operations specifically. and credible. to the success of our company.
1. 2. 3. Identify issues of concern Assess issues identified Focus on material areas Framed by our projections for global Informed by diverse perspectives Defined by our analysis energy demand and supply as described s )N DEPTH INTERVIEWS WITH GLOBAL The issues that were identified as most in our Outlook for Energy nongovernmental organizations material to external groups and that We are focused on safely and reliably are critical to our company’s business s )N DEPTH INTERVIEWS WITH ACADEMIA helping to meet growing energy demand strategies are organized according to to improve the quality of life for people s )N DEPTH INTERVIEWS WITH lNANCIAL five material areas. institutions around the world, while working to reduce Environmental performance our impact on the environment and enhance s s %MPLOYEE INPUT THROUGH SURVEY CARDS our contribution to the communities in which s Workplace s $ETAILED REVIEW BY "USINESS FOR we operate. Material issues are defined as Corporate governance those that may have a significant current or Social Responsibility (BSR) s Transparency and human rights potential impact on our company, that are Direct feedback was used to identify the s of significant concern to external groups, environmental and social issues of most s Community development and that we are able to address in a concern to our key external groups. We reasonable manner. also reviewed internally the issues that have the most significant impact on our business strategy. corporate citizenship report / 7
environmental performance
s managing climate change risks s protecting biodiversity s case study: sustaining global water supplies
community workplace development s workplace safety
s strategic community s workplace health investments s employment policies s education partnerships and practices and investments s national content development s case study: supporting s case study: economic progress combating the spread of HIV/AIDS
transparency corporate and human rights governance
s international transparency s product stewardship and anti-corruption programs s ethics s political involvement s human rights
ExxonMobil’s Outlook for Energy
4. Review priority issues Addressed in the context of ExxonMobil these as priority issues (as presented above relative importance of the issue to both operations specifically in each material area) at the beginning of external and internal audiences. This assess- each section of the report. Priority issues ment was reviewed by senior management. In ExxonMobil’s 2007 Corporate Citizenship were determined by using a three-tiered Report, we discuss the most significant and internal review system that included the strategic issues in more detail and introduce 8 / corporate citizenship report
summary of citizenship activities 2007 achievements, challenges, and future plans
2007 achievements
Best-ever 3 percent 23 percent $ 1 billion+ Established energy efficiency reduction in reduction in combined invested in the ExxonMobil performance greenhouse gas emissions of volatile cogeneration Environmental Record-low emissions from organic compounds, projects since Services organization environmental 2006 level nitrogen oxides, 2004 to improve to better manage number of spills, performance and sulfur dioxide efficiency and our remediation and including zero spills from our operations reduce emissions nonoperating site from company- since 2004 activities operated marine vessels
Best-ever Trained Developed Emphasized Continued combined employee thousands of more effective development of to roll out our and contractor contractor supervisors processes and tools our workforce and strategy for national workforce lost-time and managers on to deliver human gender diversity content development workplace incident rate safety leadership resources services worldwide as part in our developing and expectations as part of an of an ongoing effort and operating areas Upgraded ongoing effort safety training and expectations for truck and passenger vehicle operators
10 out of 10 $ 89 billion 101 percent Adopted Updated score from in effectively of reserves replaced Board of Directors’ Corporate Governance GovernanceMetrics stewarded investments Statement on Guidelines to include International in our Upstream, 110 percent Incentive provision of New corporate Downstream, and of reserves replaced Compensation Jersey law for calling governance Chemical businesses over last five years in Case of of special shareholder over the last five years, Restatement meetings including $21 billion in 2007 alone
Partnered Continued Developed Served with interested to play leadership role human rights training in leadership role to governments as in shaping industry presentation for use help address human they move toward support for the in global operations rights issues as transparency transparency in Extractive Industries a representative and human managing their oil Transparency Initiative on the Voluntary rights and gas interests Principles on Security and Human Rights Steering Committee
$ 40 million $ 11 million + Supported $ 1 billion + $ 125 million in grants awarded awarded as grants local nongovern- invested in education committed to support to the Africa Health since 2005 to the mental organizations worldwide in the the National Math Initiative since 2000 Educating Women (NGOs) in Angola last 30 years and Science Initiative community and Girls Initiative and Indonesia to to improve math and development develop their capacity science education in to effectively partner the United States with multinational companies corporate citizenship report / 9
challenges future plans s #ONTINUING THE PACE OF IMPLEMENTATION OF ENERGY EFlCIENCY OPPORTUNITIES s )MPROVE ENERGY EFlCIENCY BY AT LEAST PERCENT BETWEEN AND s )MPLEMENTING PLANNED PROJECTS TO REDUCE mARING IN .IGERIA GIVEN SECURITY across our worldwide refining and chemical operations and partner funding issues s #ONTINUE HISTORICAL TREND IN SPILL REDUCTION s -EETING INCREASING ENERGY NEEDS WHILE DECREASING GREENHOUSE GAS EMISSIONS s 2EDUCE THE NORMALIZED EMISSIONS OF VOLATILE ORGANIC COMPOUNDS AND s #ONTINUING TO REDUCE OUR ENVIRONMENTAL FOOTPRINT PARTICULARLY IN ECOSYSTEMS nitrogen oxides from our chemical operations by 5 percent per year with sensitive characteristics s 2EDUCE UPSTREAM HYDROCARBON mARING VOLUMES BY PERCENT OVER THE s -EETING RIGOROUS IMPROVEMENT TARGETS ESTABLISHED THROUGH OUR next several years as our planned projects are implemented Environmental Business Planning s $EVELOP COST EFFECTIVE TECHNOLOGIES TO INCREASE FUTURE ENERGY SUPPLIES improve energy efficiency, and reduce greenhouse gas emissions
s )MPROVING FURTHER OUR INDUSTRY LEADING PERSONNEL SAFETY PERFORMANCE s %MPHASIZE HAZARD RECOGNITION AND REDUCE RISK TOLERANCE IN OUR WORKFORCE s 3TRENGTHENING SYSTEMS TO IDENTIFY AND REDUCE THE RISK OF PROCESS through behavior-based safety tools safety incidents s %NHANCE USE OF HUMAN FACTORS TECHNOLOGY TO ADDRESS ISSUES SUCH AS worker fatigue and ergonomics s 3USTAINING EFFECTIVE MALARIA AND ()6!)$3 CONTROL PROGRAMS IN !FRICA s 7ORK THROUGH THE !MERICAN 0ETROLEUM )NSTITUTE TO DEVELOP INDUSTRY INDICATORS s $EVELOPING THE CAPACITY OF LOCAL ECONOMIES AND THE LOCAL WORKFORCE for process safety to benefit from our operations beyond the life span of a project s #ONTINUE TO IMPROVE SECURITY MEASURES TO FURTHER ENHANCE THE PROTECTION of our people and assets s #REATE ECONOMIC OPPORTUNITIES FOR LOCAL BUSINESSES DEVELOP LOCALLY competitive supply chains, and expand and publicize details of national content development on our Web site s #ONTINUING TO DELIVER SUPERIOR RETURNS ACROSS THE BUSINESS LINES s -ANAGE SUCCESSION OF NON EMPLOYEE DIRECTORS TO MAINTAIN EFFECTIVE s )MPROVING MUTUAL UNDERSTANDING OF COMPANY POSITIONS AND CORPORATE independent oversight citizenship issues with shareholders s #ONTINUE TO DEMONSTRATE HIGH ETHICAL STANDARDS s %NSURING THAT CORPORATE GOVERNANCE PRACTICES FACILITATE EFFECTIVE MANAGEMENT s (OLD FREQUENT MEETINGS AND DISCUSSIONS WITH SOCIALLY RESPONSIBLE of enterprise risks and support growth in shareholder value investors, institutional investors, and other interested parties s #ONTINUING TO COMMUNICATE OUR PRINCIPLES BASED Corporate Governance s 3UPPLEMENT THESE SHAREHOLDER MEETINGS WITH #ITIZENSHIP Guidelines with shareholders Engagement Forums s #ONTINUING TO MINIMIZE POTENTIAL RISKS OF OUR BUSINESS ACTIVITIES AND s #ONTINUE TO REVIEW AND ENHANCE CORPORATE GOVERNANCE POLICIES AND products on people and the environment procedures to ensure best approaches are in place considering current circumstances
s 'AINING THE CONSENT OF HOST GOVERNMENTS FOR INCREASED DISCLOSURE ON s #ONTINUE SUPPORTING TRANSPARENCY INITIATIVES THAT APPLY UNIVERSALLY TO financial revenues from oil and gas all companies s -AINTAINING SECURITY AT OPERATIONS WITHIN A FRAMEWORK THAT PROMOTES s #OMPLETE HUMAN RIGHTS AWARENESS TRAINING respect for human rights s (OST HUMAN RIGHTS WORKSHOP FOR COMPANIES .'/S AND GOVERNMENTS s 0ROMOTING THE Voluntary Principles on Security and Human Rights in joint in Latin America to provide information and tools for managing human ventures in which ExxonMobil has minority participation rights challenges
s 3UPPORTING ECONOMIC GROWTH AND DEVELOPMENT IN COUNTRIES IN !FRICA TO MAKE s #ONTINUE TO EXPAND GEOGRAPHIC REACH OF THE Global Women in Management progress toward meeting the United Nations Millennium Development Goals Program to Nigeria and Mexico in 2008 and to the Middle East and Latin s 0ARTNERING WITH LOCAL .'/S IN DEVELOPING COUNTRIES TO EFFECTIVELY IMPLEMENT America in 2009 to help build capacity of local NGOs and manage in-country programs s 3UPPORT SIX ADDITIONAL Global Women in Management Program workshops s )MPROVING THE PERFORMANCE OF STUDENTS IN MATH AND SCIENCE TO TRAIN FUTURE reaching 156 women and two additional coaching workshops for more than scientists and engineers 50 new coaches s (OST THREE -ICKELSON %XXON-OBIL 4EACHERS !CADEMY SESSIONS IN TO train 600 elementary school teachers 10 / corporate citizenship report
outlook for energy view to 2030
worldwide economic output global energy intensity world energy demand by sector (trillions of dollars, 2005-dollars) (barrels of oil-equivalent/thousand dollars gross domestic (millions of oil-equivalent barrels per day) product, 2005-dollars) power generation transportation industrial residential and commercial average annual growth average annual growth average annual change average annual change average annual growth average annual growth 90 1980-2005 (%): 2.9 2005-2030 (%): 3.0 3 1980-2005 (%): -1.0 2005-2030 (%): -1.6 330 1980-2005 (%): 1.8 2005-2030 (%): 1.3 0.7
60 2 220 1.2
1.7 30 1 110 1.5
1980 2005 2030 1980 2005 2030 1980 2005 2030
Our outlook is focused on the world’s rising energy Power Generation and Growing Electricity Demands. The largest end-use needs and how we expect these needs to be met. sector today—and the one with the great- est volume growth going forward—is power The challenges reflect the global scope of this task generation. Both economic development as well as substantial objectives related to economic and rising prosperity drive the demand for electricity. As developing countries become development, energy security, and the environment. more prosperous and billions of people move up the economic curve, demand for electric- ExxonMobil’s Outlook for Energy summarizes close to 3 percent annually through 2030, ity will increase significantly. Meeting this our assessment and projections for expected similar to historical trends. demand will require strong growth in fuel global energy demand and supply through While growing, the global economy is supplies for power generation. 2030. It is the outcome of an ongoing process becoming more energy efficient. Energy that has been conducted for decades. The On a global basis, coal will remain the larg- intensity—the amount of energy used per process considers fundamental drivers of overall est source of power through 2030, although unit of economic output—has improved sig- energy demand, including economic progress, natural gas will see the largest increase in nificantly over the past 25 years. The rate of population growth, and substantial gains in use. While more efficient technologies and improvement is likely to increase as advanced energy efficiency. In addition, our outlook reflects cleaner fuels will continue to penetrate the technologies are developed and deployed. a wide variety of factors affecting the use of power generation sector, the predominance As a result, energy intensity in 2030 will be particular types of energy, including supply and of coal will have significant implications for almost 50 percent below the level of 1980. demand technologies, potential public policy overall carbon dioxide (CO2) emissions. initiatives, and economics. The findings influ- Global energy demand—expressed in mil- Expanding Transportation Demand. The ence our long-term strategies and investment lions of oil-equivalent barrels per day—is fastest growing sector—and the one most plans. Additional information on the Outlook expected to increase by 1.3 percent per year important to oil demand—is transportation, for Energy is available on our Web site on average from 2005 to 2030, even with which includes vehicles, ships, trains, and (exxonmobil.com/energyoutlook). significant efficiency gains. The vast majority airplanes. Transportation is essential to of the increase in demand will be in develop- Progress Drives a Growing Need for today’s world—whether aiding the provision ing countries, where economies are growing Energy. The world’s economy runs on of goods and services, or getting people most rapidly and modern energy supplies energy. Future energy use will be driven by to local or international destinations. Global are still a precious commodity for millions of a growing global population that continues economic progress, growing populations, people. While the use of renewable fuels will to seek better living standards. Global and rising individual prosperity will remain continue to grow, oil, natural gas, and coal economic output, as measured by gross strong drivers of transportation demand. will remain the primary sources of energy domestic product, is likely to increase by through 2030. corporate citizenship report / 11
world energy demand by fuel renewables energy-related CO2 emissions
(millions of oil-equivalent barrels per day) (millions of oil-equivalent barrels per day) (billions of metric tons of CO2 per year) oil natural gas coal nuclear biomass and other hydroelectric and geothermal OECD* countries non-OECD* countries renewables wind, solar, and biofuels average annual growth average annual growth average annual growth 330 2005-2030 (%): 1.3 45 2005-2030 (%): 1.5 40 2005-2030 (%): 1.2 1.5 8.7 2.0 2.0 30 220 0.9 30 1.9
1.7 20 110 15 0.7 10 1.2 0.1
1980 2005 2030 1980 2005 2030 1980 2005 2030 *Organisation for Economic Co-operation and Development
As the number of vehicles continues to rise, “modern” renewables (wind, solar, and energy efficiency will become increasingly biofuels) are likely to grow rapidly, at about conclusions from our important. Significant gains are expected to 9 percent per year on average, supported by Outlook for Energy come from evolutionary changes to conven- government subsidies and mandates. These tional engine technologies, along with market energy sources currently represent about 1 Economic progress will drive energy penetration of advanced vehicle technologies. 0.5 percent of world energy and are expected demand significantly higher by 2030, to reach approximately 2 percent by 2030. up nearly 40 percent versus 2005, even Global Energy in Perspective. Meeting with substantial gains in efficiency. the growing need for reliable and affordable Rising Energy Demand and CO2 This growth will be concentrated in the energy supplies remains a tremendous Emissions. Global energy-related CO2 emis- non-OECD countries, where economies challenge. Access to resources, large invest- sions are likely to increase by 1.2 percent per are growing rapidly and where billions ments, ongoing technology development, and year on average, with non-OECD countries of people require access to growing sound energy markets, including international representing close to 95 percent of the quantities of energy to improve their trade, are critical. In assessing the global annual growth over the outlook period. quality of life. energy future, the expected contribution of all Addressing rising CO2 emissions while primary energy sources should be recognized. providing more energy to support progress 2 Oil, natural gas, and coal will be and better living standards is a significant indispensable to meet the demand for Oil consumption, driven by transportation challenge. While a variety of options exist to reliable and affordable energy for the and industrial demand, will likely increase at mitigate CO2 emissions, each carries a cost foreseeable future. Since renewable 1.2 percent per year. Natural gas consump- ultimately borne by individuals. Effectively fuels start from a small base, they will tion is expected to grow at 1.7 percent per addressing this issue requires a thorough not significantly alter the global energy year, driven by increasing demand for power understanding of the scale, cost, and trade- mix over the outlook period, even with generation from efficient fuels with relatively offs involved, recognizing the importance rapid growth. Fossil fuels are expected low carbon intensity. Demand for coal— of energy to human progress. to continue to provide 80 percent of which has a high carbon intensity—is likely energy in 2030. to rise less than 1 percent per year. Nuclear Economic expansion is a desire for billions of power generation is expected to grow people around the world, and providing the 3 Significantly addressing global significantly, particularly after 2020. energy necessary for growth is imperative. CO2 emissions growth will require the Our approach to addressing these challenges combination of many challenging and Renewable fuels will also gain share, with an is pragmatic, with a long-term perspective. essential elements, including global overall growth rate of 1.5 percent per year. We remain committed to finding practical, participation, step changes in energy Most of this segment is made up of traditional broad-based solutions that will help ensure efficiency, significant technology gains, biomass (for example, wood, charcoal, and availability of reliable and affordable energy and massive investment over decades. dung), hydroelectric, and geothermal energy for people around the world. with relatively modest growth. In contrast, 12 / corporate citizenship report
business overview company profile
2007 business highlights
capital liquids and refinery petroleum chemical net income and exploration gas production throughput product sales prime product $ 40.6 expenditures 4.2 million sales $ 5.6 million 7.1 million billion 21 oil-equivalent barrels barrels 27.5 million billion barrels per per day per day metric tons day
Record earnings Highest-ever Produced more Throughput on Sales performance Sales grew in performance in investment in capital barrels per day par with 2006 as remained strong, 2007 with premium each of our and exploration than any of our divestments offset compared with product sales volume business lines projects competitors by volume growth 2006 figures 8 percent higher
ExxonMobil is the world’s largest publicly traded of lube basestocks and a leader in marketing finished lubricants, asphalt, and specialty integrated petroleum and natural gas company. products. Worldwide, we market products Our company and its affiliates are present on a under the Exxon, Mobil, and Esso brands. Chemical. ExxonMobil is a leader in the global scale. petrochemical industry with interest in 49 wholly owned and joint-venture facilities We operate facilities and market products production operations in 24 countries around around the world. We hold strong positions around the world, and explore for oil and the world. In 2007, seven major upstream in many of the largest-volume and highest- natural gas on six continents. We lead the projects started production. ExxonMobil sells growth petrochemicals in the global economy. industry in almost every aspect of the energy natural gas in almost all major and developing The company is one of the largest producers and petrochemical business. markets to power companies, industrial of olefins, the basic petrochemical building users, and distributors. Total 2007 oil and To help meet the world’s growing energy block. We are also one of the largest produc- gas production available for sale averaged needs, ExxonMobil is involved in the ers of polyolefins, which include polyethylene, 4.2 million oil-equivalent barrels per day. exploration and production of crude oil and the largest-volume plastic, and polypropylene, natural gas; the manufacture of petroleum Downstream. ExxonMobil’s network of one of the fastest-growing polymers. More products; and the transportation and sale reliable and efficient manufacturing plants, than 90 percent of chemical capacity is of crude oil, natural gas, and petroleum transportation systems, and distribution employed in businesses where we rank first products. We are a major manufacturer centers provides clean fuels, lubricants, and or second in worldwide market position. and marketer of commodity and specialty other high-value products and feedstocks Technology. Many oil and gas resources are petrochemicals and have interests in electric to customers around the world. ExxonMobil found in remote areas with difficult operating power generation facilities. Our extensive has interests in 38 refineries located in 21 environments. The complexity of these envi- research programs support operations, countries and markets its products through ronments places greater emphasis on tech- enable continuous improvement in each more than 32,000 retail service stations. Our nological innovation. Over the past five years, of these businesses, and explore emerging products and services are also provided to ExxonMobil has invested about $3.5 billion in energy sources and technologies. nearly 1 million customers worldwide through research. As new technologies are developed, our three business-to-business segments— Upstream. ExxonMobil’s asset base is large, our global functional organization enables Industrial and Wholesale, Aviation, and geographically diverse, and economically rapid deployment and value capture. We have Marine. In 2007, refinery throughput averaged robust across a range of business environ- remained an industry leader in technology 5.6 million barrels per day, and petroleum ments. The company holds exploration and by focusing on both breakthrough concepts product sales were 7.1 million barrels per production acreage in 36 countries and and process modifications that enhance day. ExxonMobil is the world’s No. 1 supplier performance across our business lines. corporate citizenship report / 13
business highlights data 2004 2005 2006 2007 Company profile Net income, billions of dollars 25.3 36.1 39.5 40.6 1 Sales and other operating revenue, billions of dollars 291 359 365 390 Net liquids production, millions of barrels daily 2.6 2.5 2.7 2.6 Natural gas production available for sale, billions of cubic feet daily 9.9 9.3 9.3 9.4 2 Oil-equivalent production, millions of oil-equivalent barrels daily 4.2 4.1 4.2 4.2 Refinery throughput, millions of barrels daily 5.7 5.7 5.6 5.6 3 Petroleum product sales, millions of barrels daily 7.5 7.5 7. 2 7.1 Chemical prime product sales, millions of metric tons 27.8 26.8 27.4 27.5 4 Taxes to governments, billions of dollars 87 99 101 106 Benefits to employees, billions of dollars (wages, salaries, pensions, and other benefits) 11 12 12 13 Spending with suppliers, billions of dollars 162 211 212 230 Long-term debt at year end, billions of dollars 5.0 6.2 6.6 7.2 Total assets at year end, billions of dollars 195 208 219 242 citizenship performance data Interpretation: An interpretation indication is provided where the performance trend is considered to be generally desirable ( • ), undesirable ( • ), or mixed ( • ) by ExxonMobil. No interpretation is provided if not applicable. 2004 2005 2006 2007 Interpretation Environmental performance Marine vessel spills (owned/operated and long-term leased), number of hydrocarbon spills > 1 barrel 1 0 0 0 • Other spills (not from marine vessels), number of oil, chemical, and drilling fluid spills > 1 barrel 474 370 295 252 • Hydrocarbons spilled, thousands of barrels 60 12 40 8 • Controlled hydrocarbon discharges to water, thousands of metric tons 2.2 2.0 1.9 1.7 • Total hazardous waste disposed, thousands of metric tons 391 297 238 168 • Sulfur dioxide (SO2) emitted, millions of metric tons 0.28 0.25 0.24 0.21 • Nitrogen oxides (NOx) emitted, millions of metric tons 0.18 0.16 0.16 0.15 • Volatile organic compounds (VOCs) emitted, millions of metric tons 0.40 0.36 0.31 0.29 • Volatile organic compounds (VOCs) emitted, metric tons per 100 metric tons of throughput or production Upstream 0.086 0.084 0.071 0.073 • Refining 0.023 0.018 0.016 0.015 • Chemical 0.059 0.049 0.043 0.039 • Greenhouse gas emissions, absolute (direct equity, CO2-equivalent emissions), millions of metric tons 139 138 146 141 • Greenhouse gas emissions, normalized (direct equity, CO2-equivalent emissions, excluding cogeneration), metric tons per 100 metric tons of throughput or production Upstream 21.5 21. 2 22.5 21.3 • Downstream 18.3 17.3 17.6 17.4 • Chemical 45.8 44.3 43.9 41.6 • Hydrocarbon flaring (worldwide activities), millions of metric tons 7.1 7.7 8.2 8.1 • 5 Energy intensity, normalized versus GEMS* base year (2000)—refining 95.3 93.8 93.9 93.2 • 6 Energy intensity, normalized versus GEMS* base year (2001)—chemical steam cracking 94.5 92.2 91.6 90.6 • Cogeneration capacity in which we have interest, gigawatts 3.6 4.3 4.3 4.5 • Environmental expenditures, billions of dollars 2.9 3.3 3.2 3.8 Workplace 7 Number of regular employees at year end, thousands 86 84 82 81 Fatalities—employees 0 3 3 0 • Fatalities—contractors 6 5 7 8 • 6 Lost-time incident rate—employees (per 200,000 work hours) 0.044 0.069 0.049 0.030 • 6 Lost-time incident rate—contractors (per 200,000 work hours) 0.062 0.054 0.052 0.063 • 6 Lost-time incident rate—total workforce (per 200,000 work hours) 0.053 0.061 0.051 0.046 • 6 Total recordable incident rate—employees (per 200,000 work hours) 0.39 0.39 0.33 0.32 • Total recordable incident rate—contractors (per 200,000 work hours) 0.42 0.45 0.43 0.43 • Total recordable incident rate—total workforce (per 200,000 work hours) 0.41 0.42 0.38 0.37 • Percent of workforce—non-U.S. 62 63 63 63 Percent new professional hires—non-U.S. 78 73 72 71 Percent women—global workforce (excluding company-operated retail stores) 23 23 24 25 • Corporate governance Capital and exploration expenditures, billions of dollars 15 18 20 21 8 Distributions to shareholders, billions of dollars 15 23 33 36 Corporate political contributions—U.S. state campaigns and national 527s, millions of dollars** 0.34 0.34 0.41 0.27 Transparency and human rights Number of transparency agreements 3 4 5 5 Community development 9 Community investments, millions of dollars 132.4 167.6 170 206.6 • 9 United States 95.2 112.7 109.1 124.1 9 Rest of world 37.2 54.9 60.9 82.5
1 Sales and other operating revenue includes purchases / sales contracts with the same counterparty in 2004 7 Regular employees are defined as active executive, management, professional, technical, and wage and 2005. Effective January 1, 2006, these purchases/sales contracts were recorded on a net basis. employees who work full time or part time for the Corporation, and are covered by the Corporation’s 2 Gas converted to oil-equivalent at 6 billion cubic feet = 1 million barrels. benefit plans and programs. 8 3 Petroleum product sales reported net of purchases / sales contracts with the same counterparty. Cash dividends to ExxonMobil shareholders and share purchases to reduce shares outstanding. 9 4 Income, sales-based, and other taxes and duties. Historical data adjusted to include employee- and retiree-giving. 5 Historical data adjusted to reflect updated methodology by third party (Solomon Associates). * Global Energy Management System 6 Historical data updated to reflect improved information. ** 2007 Data has been corrected since publishing the 2007 Corporate Citizenship Report to reflect both contributions to U.S. state campaigns and national 527s. 14 / corporate citizenship report environmental performance
priority issue case study managing climate sustaining global change risks water supplies Reducing greenhouse gas Managing water use—developing emissions through technological measures to reduce water use advances in energy production in ExxonMobil operations and initiatives that reduce See page 24 consumer emissions
priority issue protecting biodiversity Minimizing our environmental footprint by incorporating high standards to protect and mitigate potential impacts to biodiversity
ExxonMobil strives to conduct business throughout managing our the world in a manner that is protective of the environ- environmental performance Our Operations Integrity Management ment and compatible with the environmental and System (OIMS) helps us manage economic needs of the communities in which we our safety, health, and environmental risks worldwide (see page 37). Through OIMS, operate. We are committed to improving our we communicate expectations, measure progress, and drive continuous improvement environmental performance through scientifically in environmental performance. OIMS meets sound and practical solutions with the goal of driving the standard for environmental management systems (ISO 14001:2004) established by the incidents with real environmental impact to zero. International Organization for Standardization. corporate citizenship report / 15
a closer look
Risk Management and Emergency Preparedness. Risks associated with safety, security, health, and the environment are inherent in the energy and petrochemical business. Recognizing these risks, ExxonMobil takes a disciplined and system- atic approach to business continuity planning and emergency preparedness. Meeting growing energy demand and addressing climate risks To strengthen our capability to respond “The challenges of energy security, economic growth, and environmental protection quickly and effectively to operational are increasingly merging, leading to an unusual confluence of public policy issues. incidents, we routinely test the trained Positioned at the three-way intersection of these challenges are energy companies like teams at our operating sites on a range of ExxonMobil, which have become the focus of much public policy debate. Although possible scenarios. These scenarios include ExxonMobil is the largest of the publicly traded international energy companies, we responding to simulated product spills, fires, account for no more than 2 percent of the world’s daily energy needs. explosions, natural disasters, and security incidents. In 2007, we conducted six major There are legitimate concerns about the risks of climate change due to rising regional emergency response drills in Bermuda, greenhouse gas emissions resulting from the world’s enormous requirements for fossil California, Cyprus, the Gulf of Mexico, fuels and changes in land use around the planet, both of which are associated with Malaysia, and Sakhalin Island, Russia. We global economic growth. But there is all too often also a tendency to underestimate also conducted a corporate response drill the size and scope of the energy demand challenge ahead, to overestimate the ability involving ExxonMobil Aviation. In addition, we of alternative energy sources to meet this demand, and to underestimate the role conducted numerous drills and workshops petroleum-based technologies can play in solving the challenges we face. around the globe to validate the readiness of The climate change challenge has been decades in the making—and is likely decades ExxonMobil affiliates to address an influenza in the managing. It is worldwide in its extent, with potential impacts touching all corners pandemic outbreak. Additional information of the globe. And, it too, involves enormous complexity. The variables are nearly on our emergency prevention and response countless, and the cause-and-effect chains convoluted. Without question, evidence systems is available on our Web site shows that the earth’s average temperature has warmed approximately 0.7 degrees (exxonmobil.com/emergencyresponse). Celsius in the last century. Without question, many global ecosystems, especially polar Environmental Management and Planning. ones, are showing signs of warming. Without question, emissions and concentrations Our environmental management processes of carbon dioxide (CO2)—one of several greenhouse gases—have increased during this are guided by our Protect Tomorrow. Today. same time period. The burning of fossil fuels and changes in land use are significant initiative, which outlines our expectations for sources of CO2 emissions. delivering superior environmental perfor- It has become increasingly clear that climate change poses risks to society and mance and achieving industry leadership in ecosystems that are serious enough to warrant action—by individuals, by businesses, priority areas of importance to each business. and by governments. Companies have a responsibility to take action to combat the rise Our Environmental Business Planning (EBP) of greenhouse gas emissions, and ExxonMobil is doing so in several substantive ways process, which integrates environmental (see page 16). Any effective and sustainable approach to addressing climate risk must improvement into overall business plans also incorporate common-sense, proven risk-management principles—assessing costs and strategies, is used by our businesses and benefits, and taking the actions most likely to achieve benefits at the lowest cost. to identify key environmental drivers that We all must engage in the search for solutions if we are to succeed. Many thoughtful are specific to their processes and activities, policy proposals have been put forward in Europe and the United States, aimed at set targets in key focus areas, and identify reducing greenhouse gas emissions. ExxonMobil has been—and is committed to projects and actions to achieve those targets. being—a constructive participant in the dialogue on climate change, lending what For example, eliminating spills is an impor- insights and expertise we have for consideration. We will not all share the same tant leadership priority for our businesses, perspectives or views, of course. However, I believe that diversity of opinion ultimately while reducing flaring is a significantly higher enriches public discourse. But we do all share a commitment to addressing the risks priority for our production businesses where of climate change in meaningful ways.” flare levels are higher. Additional informa- tion about EBP is available on our Web site Based on remarks by Rex W. Tillerson, Chairman and CEO, Exxon Mobil Corporation, at the (exxonmobil.com/ebp). Royal Institute for International Affairs (Chatham House) in London on June 21, 2007. 16 / corporate citizenship report
a closer look
ExxonMobil’s actions to reduce greenhouse gas emissions Wherever we operate, we meet local regulations for environmental performance, At ExxonMobil, we are seeking ways to reduce greenhouse gas (GHG) emissions from and where there are no local regulations, our own operations as well as from energy use by consumers. We are working on we operate to standards that we believe are technologies with the potential for near-term impact on emissions, while at the same protective of the environment. We base these time looking for breakthrough technologies for the future. To make a meaningful standards on sound science and compre- contribution to future GHG reductions, new technologies must be cost-effective and hensive risk assessments. For example, have the potential to be deployed on a large scale. Our research on both near-term ExxonMobil Development Company, which and future technologies is conducted by our own research staff, in partnership with manages ExxonMobil’s major new upstream academic and private groups, and through programs such as the Global Climate and projects worldwide, developed Environmental Energy Project at Stanford University. Standards for nitrogen oxides emissions, offshore drill cuttings discharges, flare and venting reduction, water management, near-term developing solutions waste management, and land use. These activities beyond 2030 Standards allow us to identify environmental improvement opportunities early in project planning when they can be implemented most effectively. s "IOFUELS
s %NERGY EFlCIENCY reducing improvements s #ARBON CAPTURE GHG and storage priority issue s #OGENERATION emissions s %NERGY EFlCIENCY from energy s &LARE REDUCTION managing climate production s 'ASIlCATION s #ARBON STORAGE s 3OLAR ENERGY change risks ExxonMobil shares with policy makers, industry, and consumers the global challenge of addressing risks posed by increases in global greenhouse gas (GHG) emissions. s %NGINE RESEARCH While climate change remains extraordinarily s 4IRE AND AUTOMOTIVE complex, increasing scientific evidence parts technology s !DVANCED makes it clear that rising GHG emissions improving s ,ITHIUM ION BATTERY transportation consumer materials pose risks to society and ecosystems. use of s %NERGY STORAGE These risks justify the development and energy s Homogeneous Charge Compression Ignition s (YDROGEN FOR VEHICLES implementation of responsible actions by technology governments, companies, and individuals. s Advanced fuel economy motor oil Taking sensible action today is necessary to develop effective and meaningful solutions, both for the short term and long term. Technological advances—in how Read more about each of these topics on pages 17 to 20. the world produces energy as well as how energy is used by consumers—will be critical. Meaningful approaches must be affordable to consumers in the developed and developing world and allow for contin- ued economic growth and improvement in global living standards.
ExxonMobil believes that the long-term objective of a climate change policy should be to reduce the risk of serious impacts on society and ecosystems, while consid- ering the importance of energy to global corporate citizenship report / 17
economic development. Managing these We are on track to meet our target of improv- greenhouse gas emissions (absolute) risks will require effort and decisions over ing energy efficiency across our worldwide direct equity, CO2-equivalent emissions (millions of metric tons) downstream upstream chemical many decades. During that time, policies refining and chemical operations by at least cogeneration and Hong Kong power need to be flexible to respond to evolving 10 percent between 2002 and 2012. This scientific knowledge, experience with policy target is consistent with the American 04 139 implementation, and changes in the global Petroleum Institute’s Voluntary Climate 05 138 economy and technology. This flexibility is Challenge Program in the United States. 146 critical for identifying and progressing the 06 Cogeneration. Cogeneration is the simul- most cost-effective solutions to address 07 141 taneous production of electricity and useful the risks posed by rising GHG emissions. heat or steam. By capturing the by-product We are reducing GHG emissions from our heat that would otherwise be lost when own operations as well as from energy use power is generated, we are able to make by consumers. Our approach is to seek the steam or use the heat directly within our most attractive solutions, which are both greenhouse gas emissions (normalized) manufacturing and production facilities. direct equity, CO2-equivalent emissions excluding cogeneration cost-effective and have the potential to be (metric tons per 100 metric tons of throughput or production) The latest turbine technology allows cogen- deployed at a large scale. eration to be approximately twice as efficient 04 18.3 as traditional methods of separate steam 05 17.3 ExxonMobil’s actions to reduce and power production. 06 17.6 greenhouse gas emissions 07 17.4 As an industry leader in the use of cogenera- downstream Reducing Greenhouse Gas tion applications, we have interests in about 04 21.5 05 21.2 Emissions from Energy Production. 100 cogeneration facilities in more than 06 22.5 In 2007, GHG emissions from our equity 30 locations worldwide. We have invested more 07 21.3 operations were 141 million metric tons. than $1 billion into cogeneration projects upstream
Despite changes in our businesses toward since 2004, bringing the combined power 04 45.8 more energy-intensive production, our GHG generation capacity at facilities in which we 05 44.3 emissions were reduced by about 5 million have an interest to more than 4.5 gigawatts 06 43.9 metric tons from 2006. About 3 million metric 07 41.6 in 2007. With new facilities under construc- chemical tons of this reduction resulted from efficiency tion around the world, we expect to increase actions taken in 2007, while the balance of this capacity to more than 5 gigawatts in the the reduction was due to changes in our next three years. Our cogeneration project operations and better GHG emissions mea- in Antwerp, Belgium—on schedule to start surement in some of our facilities. Through up in 2008—will integrate recovered heat into greenhouse gas emissions reduction from ExxonMobil actions in 2006 and 2007 efficiency actions taken in 2006 and 2007, we the refinery process, which is unique in the direct equity, CO2-equivalent emissions (millions of metric tons) reduced GHG emissions by about 5 million industry for a large-scale project. energy efficiency and cogeneration flare reduction metric tons in 2007, equivalent to remov- Flare Reduction. Across our operations, we ing about 1 million cars from roads in the 06 2 are working to reduce flaring of gas that has United States. 07 5 no economic outlet as well as gas that is Energy Efficiency Improvements. In 2007, flared as a result of maintenance or unex- our operations consumed approximately pected operating events. ExxonMobil 1.55 billion gigajoules of energy and achieved Development Company developed Flare best-ever energy efficiency in our Refining and Venting Reduction Standards for use hydrocarbon flaring from upstream and Chemical businesses. in the design of major upstream projects. oil and gas production We continue to implement procedures and (millions of metric tons) Through our Global Energy Management projects to improve operations reliability and System (GEMS), we have identified oppor- 04 6.5 thereby reduce the flaring associated with tunities to improve energy efficiency by unexpected operating events and equipment 05 7.1 15 to 20 percent at our refineries and maintenance. In 2007, total hydrocarbon chemical plants, and have implemented 06 7.7 flaring from our worldwide activities was about 60 percent of these. Over the past 07 7.7 8.1 million metric tons. several years, we have been improving the energy efficiency of our Refining and Chemical businesses at a rate two to three times faster than the industry. 18 / corporate citizenship report
a closer look
Reporting greenhouse gas emissions Our operations in Nigeria continue to be the largest source of flaring among our ExxonMobil has reported our greenhouse gas (GHG) emissions since 1998. We base operations globally. To eliminate routine gas our calculations on the guidance provided in the internationally endorsed Compendium flaring in Nigeria, we are investing more than of Greenhouse Gas Emission Estimation Methodologies for the Oil and Gas Industry $4 billion in gas utilization and commercial- (American Petroleum Institute) and the Petroleum Industry Guidelines for Reporting ization projects. Progress on these projects Greenhouse Gas Emissions (International Petroleum Industry Environmental Conservation is challenged by operational and security Association). Calculating GHG emissions from specific petroleum products, such as issues as well as partner funding. Our East gasoline or diesel fuel, is straightforward because their carbon content is well-known Area Project compression platform came and essentially all of this carbon is converted to carbon dioxide when the fuel is onstream in 2006 and is currently re-injecting combusted as a transportation fuel. However, identifying which fuel sales are attributed about 1.3 million metric tons of gas per year. to which member of the petroleum industry is difficult because the supply system for The full impact of this project and others crude and petroleum products is complex, with multiple changes of ownership. under development is expected to continue There is a wide range in the fraction of GHG emissions that are generated from petroleum to reduce flaring in years to come. industry operations relative to consumer use of petroleum products. On a global basis, We continue to be an active member of the the International Energy Agency estimates that on average about 10 percent of World Bank’s Global Gas Flaring Reduction petroleum-related GHG emissions are from industry operations. ExxonMobil believes Partnership, exploring additional opportuni- that producers, refiners, distributors, and end-users should each be responsible for ties for gas recovery and addressing barriers managing and reporting the emissions generated from activities under their control. To to implementing economically feasible alter- this end, we are taking actions to reduce emissions from our own operations and are natives to gas flaring. We remain engaged working on technologies to help consumers reduce their emissions (see page 19). with governments seeking to progress gas utilization and commercialization programs.
Our refineries continued implementation of Distribution of GHG emissions from use of petroleum Flaring Best Practices and reduced flaring by approximately 15 percent in 2007. For consumer use of petroleum products oil industry operations example, our Altona refinery in Australia constructed a light hydrocarbons recovery unit, which significantly reduced flaring. Since start-up in 2007, this unit recovered more than 10,000 metric tons of light hydrocarbons for sale as liquefied petroleum gas and gasoline.
Carbon Capture and Storage. We are ~90. ~10. involved in carbon capture and storage percent percent projects in several locations. These projects recover carbon dioxide (CO2) that would otherwise be released to the atmosphere and inject it into oil and gas reservoirs or deep saline aquifers. We continued our partnership with the European Commission and other organizations in the CO2ReMoVe project, designed to develop and demonstrate reliable methods for monitoring CO2 storage in geological reservoirs. Over the next few years, the project will evaluate a range of technologies to monitor the injection and storage of CO2. One of the sites being studied is the Sleipner Field, offshore Norway, where we have participated in the capture and geologic storage of more than 1 million metric tons of CO2 each year since 1998. We also supported the joint-industry Carbon corporate citizenship report / 19
a closer look
Capture and Sequestration Technologies Engine Research. ExxonMobil researchers, How ExxonMobil helps Program at the Massachusetts Institute of together with major vehicle and engine consumers in Canada Technology and the International Energy manufacturers such as Toyota and Caterpillar, Imperial Oil Limited, our Canadian Agency’s Greenhouse Gas Research and are developing more efficient, cleaner-burning affiliate, has supported the Clean Air Development Programme. internal combustion engines and engine Foundation’s Car Heaven Program control systems that could improve the In addition, within our internal operations, we since its inception in 2000. In Canada, fuel economy of future vehicles by up to continue to gain valuable experience in CO2 the program facilitates retiring older, 30 percent versus current gasoline engines. recovery at our LaBarge Shute Creek facility higher-emitting vehicles at no cost to in Wyoming. A proposed project will expand Tire and Automotive Parts Technology. the owner and provides incentives for the sale of CO2 for enhanced oil recovery Together with tire manufacturers, we are the purchase of new vehicles or other and reduce CO2 emissions by 2 million metric introducing a new tire lining technology that cleaner alternatives. To date, the Car tons per year. uses up to 80 percent less material in the Heaven Program has helped to remove manufacturing process. This makes tires more than 73,000 vehicles from Developing Solutions Beyond lighter and keeps them properly inflated Canada’s roads, preventing smog- 2030. We conduct internal research longer, both of which contribute to greater forming emissions of 12,000 metric as well as work with universities and other fuel efficiency. Car parts, such as bumpers tons and carbon monoxide emissions businesses to develop global energy tech- and fuel tanks, made from advanced of 50,000 metric tons. nologies designed to significantly reduce ExxonMobil plastics help reduce vehicle greenhouse gas emissions in the long term. weight by about 10 percent, which helps This includes proprietary research efforts improve fuel efficiency by more than in areas such as gasification, biofuels, and 5 percent. carbon capture and storage. For example, we are conducting research on more efficient ,ITHIUM )ON "ATTERY -ATERIALS ExxonMobil and cost-effective technologies for separat- Chemical Company developed a new gen- ing CO2 and studying long-term CO2 storage eration of separator films that are expected in geological formations. to improve the power, capacity, and safety of lithium-ion batteries used in hybrid and We are a founding sponsor of the Global electric vehicles. Lighter, smaller, and more Climate and Energy Project (GCEP) at durable batteries will help improve the energy Stanford University. Now entering its sixth efficiency and affordability of hybrid and year, this pioneering research effort is focused electric vehicles. on identifying breakthrough energy technolo- gies that reduce GHG emissions and have Homogeneous Charge Compression the potential to be deployed on a large scale. Ignition Technology. ExxonMobil is working with vehicle and engine manufacturers to GCEP funding continues to support develop Homogeneous Charge Compression scientists at Stanford University as well as Ignition technology for gasoline engines. at other research institutions in the United This technology enables gasoline engines to States, Australia, Japan, and Europe. In achieve the high efficiency levels of diesel 2007, GCEP announced awards totaling engines, resulting in improved fuel economy. $15 million to support eight new collaborative research programs in areas such as Advanced Fuel Economy Motor Oil. In the advanced transportation, batteries, solar United States, ExxonMobil’s Lubricants and energy, advanced conversion of coal, Specialties organization will launch Mobil 1 and advanced materials and catalysts. Advanced Fuel Economy, a synthetic motor oil that is expected to improve fuel economy Improving Consumer Use of Energy. by up to 2 percent,* compared to those We actively support initiatives to grades most commonly used. If one-third reduce consumer emissions from the use of U.S. motorists reduce their gasoline con- of our products in the transportation sector. sumption by 2 percent, it would prevent the These include research efforts with external emission of about 8 million metric tons of partners to address the fuel and vehicle as carbon dioxide per year, equivalent to taking a single system to improve efficiency. about 1.5 million cars off the road.
*Actual savings are dependent upon vehicle/engine type, outside temperature, driving conditions, and current engine oil viscosity. 20 / corporate citizenship report
marine vessel spills (owned/operated Developing Solutions Beyond operations. We have implemented cost- and long-term leased) 2030. In conjunction with QuestAir effective new technologies and adopted new (number of hydrocarbon spills) Technologies in Canada, Plug Power Inc. in operating practices to reduce air emissions, > 1 barrel in volume < 1 barrel in volume the United States, and Ben Gurion University driven in part by new regulatory requirements 04 7 in Israel, we are developing an on-vehicle but also in response to community priorities. 1 6 hydrogen production system. The system As a result of these efforts, our combined 05 2 converts conventional hydrocarbon fuels, emissions of VOCs, SO2, and NOx decreased 2 such as gasoline or diesel, into hydrogen to by 23 percent from 2004 levels. For example, 06 5 power a fuel cell contained within the vehicle. at our Meerhout polymers plant in Belgium, 5 This technology could be up to 80 percent we are implementing an innovative approach 07 3 more fuel-efficient and emit 45 percent less to reduce VOCs emissions by recycling gas at 3 CO2 than today’s internal combustion engine. higher pressure. This will reduce our energy costs by 4 percent and our VOCs emissions reducing our by about 30 percent. This change, together environmental impact with other efforts, will decrease the plant’s air other spills (not from marine vessels) Spill Prevention. ExxonMobil is committed emissions by about 40 percent and reduce (number of oil, chemical, and drilling fluid spills > 1 barrel) to the prevention of spills from our opera- energy consumption by about 10 percent spills to water spills to soil tions. Our industry-leading spill performance from 2003 levels. 04 474 is a result of ongoing upgrades, key equip- We continued upgrading our U.S. manufac- 38 436 ment replacements, and comprehensive turing facilities to reach the target of reducing 05 370 inspection and surveillance programs. The our combined NOx and SO2 emissions by 41 329 number of spills in 2007 was down by about 70 percent from our 2000 baseline levels. By 06 295 15 percent from 2006 and continued a trend 31 264 year-end 2007, we achieved between 50 and that has resulted in an average 13-percent 60 percent of our reduction target. All seven 07 252 reduction per year since 2000. In 2007, our 26 226 of our U.S. refineries have implemented some total volume spilled was about 8000 barrels, reduction measures and are continuing to most of which was recovered at the site make further upgrades. Upgrades and facility of the spill. improvements for air emissions reduction Despite achieving a record low in both the include selective catalytic reduction to control air emissions of VOCs, SO2, and NOX NOx emissions, installation of sulfur recovery (millions of metric tons) number and volume of spills in 2007, we continue to strive for further improvement. processes, and additional flare gas recovery. 04 0.40 We conduct spill reduction awareness com- For example, our Baytown olefins plant in 05 0.36 munications and workshops in key areas. We Texas just completed a multiyear investment 06 0.31 program expected to reduce NOx emissions 07 0.29 also prioritize and incorporate spill reduction VOCs opportunities into site-specific environmental by about 1000 metric tons per year. New
04 0.28 plans. For example, in our Malaysian upstream facilities include proprietary ultra-low-NOx 05 0.25 operation, we launched a Field-Wide Spill burners that achieve a 50-percent reduction 06 0.24 Prevention Program in 2007 to promote more over the Best Available Control Technology 07 0.21 effective on-the-deck cleaning. for steam-cracking furnaces. SO2
04 0.18 We are particularly proud of our marine spill At several of our refineries and chemical 05 0.16 performance in 2007. There were no spills plants, we use innovative optical imaging 06 0.16 from ExxonMobil-operated vessels, and technology to efficiently inspect valves, 0.15 07 connectors, pumps, and other piping system NOx spills from our marine operations—whether operated by ExxonMobil or not—amounted components for leaks. This infrared video to a fraction of a teaspoon of oil per million camera system also helps the sites to detect barrels transported. emissions from storage tanks, heating and cooling equipment, and other sources, Air Emissions from Operations. ExxonMobil enabling rapid repairs. ExxonMobil engi- is working to reduce the emissions of volatile neers have conducted studies to expand the organic compounds (VOCs), sulfur dioxide capabilities of this new technology and have (SO2), and nitrogen oxides (NOx) from our shared the learnings with industry through numerous publications and presentations. corporate citizenship report / 21
Waste Management. ExxonMobil uses a ExxonMobil employees, contractors, and our ExxonMobil considers that biodiversity tiered approach to reduce both hazardous neighbors through remediation, reclamation, conservation can go hand-in-hand with eco- and nonhazardous waste. We first work to and site management services. Best-in-class nomic development through careful manage- reduce waste at its source. If the waste is not property management programs are proac- ment of the environment. Through strategic fully eliminated, we recycle or reuse materials tively deployed to prevent, contain, and community investments, we also support where possible. Any remaining waste is mitigate environmental risks. Ultimately, our programs that build the local capacity of either treated to render it nonhazardous goal is to enhance asset and community communities to maintain and protect their or disposed of in compliance with local value while at the same time creating oppor- natural resources. Our efforts are an integral regulations. For example, at our LaGrange tunities for beneficial use of idle properties. part of national content development (see films plant in Georgia, we developed a page 31) and implemented through our For example, ExxonMobil is actively new method for cleaning equipment that planning tools such as Best Practices in remediating the former Fairmont coal and eliminated 90 percent of the hazardous waste External Affairs (BPEA). coke production facility in West Virginia, generated and also significantly reduced the which we sold more than 60 years ago but Identifying Sensitive Areas. For new costs associated with the handling and re-purchased in 1997 after the owner went projects and developments, we conduct disposal of these wastes. Additionally, bankrupt. We developed an on-site recycling Environmental, Social, and Health Impact ExxonMobil Development Company program to blend contaminated materials Assessments (ESHIAs) and integrate developed an Environmental Standard for with coal, which is used by a nearby power assessment results into project decision- waste management for use in the design plant as a fuel source. Since 2004, more than making. Our assessments consist of an of major upstream projects. This Standard 300,000 metric tons of waste material have evaluation of biological, chemical, and establishes project planning and full-cycle been reused by the power plant rather than physical characteristics, including people’s waste management requirements. needing disposal, providing sufficient input health and socio-economic needs as an Over the last five years, we successfully material to generate electricity for about integral part of the environment. With the reused or recycled on average about 30,000 homes for one year. The site is being help of computer specialists, map builders, 40 percent of the hazardous waste gener- redeveloped for commercial use. and land use experts, we typically analyze ated. The amount of hazardous waste for surrounding land use in each project’s Regulatory Compliance and Expenditures. disposal decreased by more than 50 percent development area. This enables engineers In 2007, our worldwide environmental from 2004 to 2007. Our total hazardous waste to collaborate with environmental and expenditures totaled about $3.8 billion. This disposed in 2007 was 168,000 metric tons, socio-economic experts to identify sensitive includes about $1.5 billion in capital expendi- about 30 percent less than in 2006. areas before construction begins. With ture and $2.3 billion in operating expense. the use of satellite imagery, we are able Water Management. We have a responsi- Fines and settlements paid in 2007 represent to better assess how areas are impacted bility to surrounding communities and the about one-tenth of one percent of our total by the project and identify ways in which environment for managing our water use, environmental expenditures. facilities could be redesigned to reduce especially in areas where water availability is their impacts. limited. ExxonMobil continually seeks ways priority issue to reduce water use and preserve water Developing Mitigation Actions. We updated quality through the design and operation protecting biodiversity our Environmental Aspects Guide in 2007 of our facilities, recycling and reuse, and Because our business spans the globe, we to improve identification and development measures to prevent water pollution (see case operate in a variety of ecosystems, some of appropriate mitigation steps to address study on page 24). In 2007, our operations with sensitive characteristics. To address potential environmental impacts associated had a net consumption of 323 million cubic this challenge, we work under the indus- with our operations. We use a five-step pro- meters of fresh water. try’s highest standards of environmental cess to ensure that 1) potential environmental management. ExxonMobil sites incorporate impacts are identified and characterized; Site Remediation. Consistent with our biodiversity protection through their respec- 2) the natural, social, and regulatory setting is commitment to continuous improvement, we tive Environmental Business Planning efforts understood; 3) other applicable and relevant established the ExxonMobil Environmental to limit our footprint in sensitive locations. criteria are considered; 4) alternatives are Services (EMES) organization in 2007 to These are tailored to accomplish environ- identified; and 5) significance is assessed. manage and steward our remediation and mental and biodiversity protection targets nonoperating site activities around the that are specific to each location. Additional world. The mission of EMES is to protect information is available on our Web site the environment, health, and safety of (exxonmobil.com/biodiversity). 22 / corporate citizenship report
a closer look
Mitigating potential impacts on biodiversity around the world
Examples of our mitigation actions around the world include developing codes of practice for field activities to protect specific species and sensitive habitats, undertaking extensive reclamation efforts to restore degraded sites to environmentally acceptable conditions, and participating in initiatives that enhance the wildlife and habitat attributes of our properties.
Canada Sable Offshore Energy Project, Nova Scotia ExxonMobil developed a code of practice to provide operational guidance for miti- gating impacts to the Gully—a submarine canyon recognized as an area of extremely high biological productivity and desig- nated as a Marine Protected Area by the Canadian government. This code addresses, among other issues, vessel routing and aircraft flights near the Gully as well as waste management.
United States St. Mary’s Island, Houston, Texas ExxonMobil successfully restored St. Mary’s Island, providing almost Brazil Equatorial Guinea 5 hectares of nesting habitat for coastal Mamirauá and Amanã Sustainable Bioko Island, Gulf of Guinea Development Reserves, Central shorebirds, foraging habitat for upland ExxonMobil has been supporting the Bioko Amazon Region and wading birds, marine edge habitat Biodiversity Protection Program to protect for marine fish, and resting areas for ExxonMobil has been supporting the wildlife, including endangered primates migrating species. The site has been Esso-Mamirauá Environmental Education and sea turtles. As a result, we are building certified since 2003 by the Wildlife Program to promote environmental awareness and expertise among the local Habitat Council. awareness. The program supports 20 rural academic, government, and civil communities schools located inside the Mamirauá on the importance of biodiversity. We also Reserve, provides materials on environ- contributed to generating scientific under- mental education and natural resources standing necessary for policy makers to management, and develops environmental reach the decision to institute a new law ambassadors to share with others informa- that bans hunting of endangered primates tion on protecting the environment. on the island. corporate citizenship report / 23
Germany Saxonia, Schleswig-Holstein, and Hamburg ExxonMobil has been supporting refores- tation projects since the 1990s to address concerns about acid rain as well as a variety of other environmental issues, including the importance of trees for the sequestration of carbon dioxide. We have planted more than 800,000 trees over 300 hectares of sparsely wooded areas through 2007.
Russia Chayvo Production Facility, Sakhalin Island ExxonMobil has been helping to preserve and protect Steller’s Sea Eagles by design- ing our facilities so that they avoid existing nest sites. We created a 700-meter buffer zone around each nest located near our operations, which is kept clear of people and machinery during the sensitive nesting season.
Cameroon Indonesia Australia Pipeline Right-of-Way Soil South Lhoksukon Field, Liquefied Natural Gas Plant-Gorgon Erosion Control Aceh Province Project, Barrow Island Our joint venture in Cameroon has launched ExxonMobil has been implementing a ExxonMobil and its co-venturers have a three-year revegetation and erosion control revegetation project for a site approaching committed to providing $45 million to campaign, which is being implemented by a its end of production phase, covering address potential impacts on biodiversity, local contractor, using natural fertilizer and an area of 20 hectares. We are planting supplementing our 2003 commitment indigenous grasses. We are restoring areas about 16,500 trees to re-establish a of $30 million for additional conservation that have remained bare three years after our sustainable native plant community similar benefits to the state. This includes support- initial reclamation efforts along the pipeline to its original environmental condition ing increased protection of turtle popula- right-of-way due to the harsh climate, steep and to improve wildlife habitat. tions in areas away from Barrow Island slopes, and poor soil conditions. and ongoing responsibility for removing non-indigenous species if introduced following commencement of the project. 24 / corporate citizenship report
case study sustaining global water supplies: managing water use
global concern our approach Water scarcity and reduced water s -ANAGING WATER USE IN OUR quality threaten all parts of the operations around the world world. Water is essential in the s $EVELOPING MEASURES TO REDUCE water use in our operations production and processing of oil and gas, in terms of both technical s )MPLEMENTING TECHNOLOGICAL and operational innovations and safety issues. s -AKING STRATEGIC COMMUNITY investments
Water sustains life on earth, and access to clean water patterns. Water is essential in the production and processing of oil and gas, in terms of is essential to economic development. The majority of both technical and safety issues. ExxonMobil is actively engaged in managing water use global human health issues are linked to poor hygiene in our operations around the world. We track and the lack of safe drinking water. About 1.1 billion our water use at facilities and understand its significance at the global level. Where water people in developing countries are estimated to lack scarcity is a potential issue, we consider adequate access to clean water, while 2.6 billion lack opportunities to reduce consumption. ExxonMobil addresses water use the same access to basic sanitation. way we evaluate the implications of any other potential environmental impact associ- On a global basis, industry accounts for create strategies to effectively respond to this ated with our operations. This is consistent 23 percent of water withdrawn from the challenge will also be able to better manage with our risk assessment approach, which environment for human use. The largest operating costs in the future. Approaches ensures that environmental improvement water consumer within industry is the power include developing new technologies and opportunities are identified and implemented. generation sector due to its needs for cooling increasing operational efficiency to improve Particularly where water scarcity is a potential water. The refining and petrochemicals water use in operations. problem, our Environmental Aspects Guide industries also use water for cooling as well helps us develop appropriate mitigation as within the chemical processes themselves. developing measures to reduce water use in measures for our operations. Both developed and developing nations ExxonMobil operations ExxonMobil Development Company are increasingly faced with issues of water developed an Environmental Standard for scarcity and reduced water quality. Access To address this growing global concern, we water management, which requires major to clean water vitally affects the health of conducted a water survey in 2006 to identify upstream projects to meet specific criteria for people and the ability of businesses to areas in which we operate where water is discharges and consumption. The Standard operate around the world. Businesses that a potentially scarce resource and to better establishes project planning and design understand our operations’ water use corporate citizenship report / 25
looking forward
requirements for major upstream projects Across our Australian sites, we implemented to reduce unnecessary usage of water measures to reduce water consumption. resources—both surface and groundwaters. In some cases, we also created water use awareness campaigns to educate surround- ExxonMobil operations around the world ing communities about our water-saving integrate water improvement targets in their initiatives. While each site approached the respective Environmental Business Planning problem differently, our major Australian efforts. Our approaches include technologi- facilities established Water Conservation cal and operational innovations as well as Sustaining global water Teams to identify opportunities for water strategic community investments to enhance supplies requires investing savings and implemented water conservation water use efficiency and reduce water quality in education training for employees and contractors deterioration. Where appropriate, activities on-site. Because of this initiative, water Responsible management of our include on-site water reuse, purchase of gray reduction projects are already demonstrating operations is a critical component water (treated wastewater) for use as process great results, with some sites reducing water of ExxonMobil’s contribution to water, and enhancements in processes to use by up to 50 percent. For example, addressing global water supply issues. decrease water needs. water use at our Longford site decreased A sustainable global solution, however, Technological Innovation. As part of an to 3000 cubic meters a day in 2006, repre- requires global involvement—that is upcoming capacity expansion at our senting a 40-percent reduction over 2001. why ExxonMobil and its affiliates are Singapore chemical plant, we will be installing Water use at Long Island Point in 2006 was committed to investing in environmental innovative wastewater treatment technology the lowest on record, and in 2007 the site education of students, the general to reduce the impact of the expansion on further reduced its water use by 33 percent— public, and future decision makers. water use. Unlike a traditional wastewater equivalent to the average annual water use For example, our Canadian affiliate, treatment plant, this technology produces of approximately 350 households. Imperial Oil Limited, is partnering with high-quality water that can be reused, thus At our Slagen refinery in Norway, we started the nonprofit SEEDS Foundation to reducing overall water demands as well as using otherwise unusable groundwater bring environmental education to the generation of sludge that needs disposal. instead of fresh water in our desalter junior- and high-school students in The design targets a reduction in water use operations. This represents approximately Canada. Through its Habitat in Balance of 1.7 million to 2.2 million cubic meters per 25 percent of our total water intake. As a Program, the Foundation developed year, which would offset up to 15 percent of result, we reduced our freshwater intake by a tool that will help students make the increased water consumption associated approximately 200,000 cubic meters per year. critical decisions about water with the expansion. management in business development Strategic Community Investments. In 2007, Operational Innovation. At the Cold Lake scenarios. The Web-based tool, we supported a project in eastern Thailand operation of our Canadian affiliate, Imperial developed in 2007, will be available in focused on preserving sensitive rainforest Oil Limited, water is used to generate steam, 15,000 Canadian schools, providing and mangrove areas, and providing suffi- which is injected into the reservoir to heat students with a framework to cient water supplies to support surrounding the viscous hydrocarbon so that it can be understand the complex challenges agricultural and community use. ExxonMobil recovered. Due to the large volume require- of water use and management. constructed 80 check dams of local materi- ments for steam, specialized techniques were als over an area of more than 2000 hectares. In the United States, ExxonMobil has developed for recycling water produced with These dams are designed to slow water flow supported the Environmental Literacy hydrocarbon. Nearly all produced water is along steep slopes, which also reduces top Council since its founding in 1997. The recycled, thus reducing the amount of water soil nutrient loss and prevents wildfires due Council fosters environmental literacy needed to about one-tenth of the amount to increased humidity. Communities assisted by providing Web-based and printed required previously. The operation recycles with the construction of the dams and information to the general public as about 98 percent of the water produced now ensure their maintenance. As a result, well as resources to teachers who during oil recovery operations. Imperial Oil 11,000 community members benefit directly reach thousands of students. Its work Limited also developed the use of brackish from adequate water supplies and indirectly covers a range of topics, including the (saline) water as an alternative water supply. from reduced top soil nutrient loss and challenges to conserving the global This nonpotable water alternative is used dur- increased biodiversity. water supply, ecosystems, droughts, ing periods of high water demand and allows and floods. the operation to inject more steam without increasing its need for fresh water. 26 / corporate citizenship report workplace
priority issue priority issue workplace safety employment Protecting the safety of our policies and employees, contractors, customers, practices and the public by implementing policies to manage personnel and Fostering a work environment free of process safety harassment and discrimination that encourages employee growth and engagement with management
priority issue workplace health Addressing employee and community health risks through workplace malaria control, HIV/AIDS prevention programs, and strategic management of emerging health issues
ExxonMobil is committed to conducting our business safety and health in a manner that protects the safety and health of our management Our company-wide Operations employees, contractors, customers, and the public. Integrity Management System (OIMS) We strive for an incident-free workplace and have set helps us implement our policies for managing safety, health, and environmental risks (see a global safety and health goal of zero injuries and page 37). It is our primary tool for managing both personnel and process safety. OIMS illnesses. We believe that our commitment to safe, meets the requirement of the international secure, and incident-free operations will contribute occupational health and safety management system specification (OHSAS 18001:1999). to improved operations reliability, lower costs, and Through OIMS, our work processes are higher productivity. clearly described, risks are identified and mitigated, critical procedures are developed, and workforce responsibilities are defined. corporate citizenship report / 27
case study combating the spread of HIV/AIDS Focusing on sub-Saharan Africa— keeping our workforce healthy and disease-free through prevention, treat- ment, and local capacity building See page 32
priority issue national content development Promoting national content develop- ment by training local employees and contractors, purchasing local goods and services, and strategi- cally investing in communities
To meet OIMS expectations for risk manage- incident rates of 0.37 recordable incidents observations, and suggest ongoing improve- ment, each operating site is expected to and 0.046 lost-time incidents per 200,000 ments in safety procedures. follow up and investigate incidents, includ- work hours for our combined employee We emphasize the importance of strong ing “near misses,” to identify root causes and contractor workforce. There were no safety leadership to our employee and con- and contributing factors. In addition, sites employee fatalities, but we are saddened to tractor workforce to further strengthen our determine actions needed to reduce the risk report that we had eight contractor fatalities safety culture. In 2007, more than 1300 of of similar incidents and implement changes in 2007. These fatalities were the result of our contractor supervisors and managers to prevent recurrence. Additional informa- operating incidents (six) and third-party acts participated in leadership workshops tion about our safety and health policies as of violence (two). conducted by ExxonMobil Development well as OIMS is available on our Web site Company. With each member of our work- (exxonmobil.com/managementsystems). priority issue force, we are focusing on improved hazard
Our approach to safety and health manage- workplace safety recognition and a lower tolerance for risk. ment is yielding results, but we will not be Through this emphasis and increased safety Workforce Safety. Our employees and satisfied until we have achieved a work observations, our Fuels Marketing Company, contractors receive rigorous training before environment in which Nobody Gets Hurt—our for example, reduced the number of commencing work in our facilities. They unifying goal. Our employee and contractor passenger vehicle accidents by more than participate in safety teams, conduct safety workforce lost-time incident rate is industry- 50 percent in 2007 from the 2004 level. leading. In 2007, we achieved new record-low 28 / corporate citizenship report
total recordable incident rate To contribute to industry-wide safety priority issue (incidents per 200,000 work hours) improvement, we share best practices ExxonMobil employees ExxonMobil contractors workplace health and lessons learned among ExxonMobil API U.S. petroleum industry employee benchmark* organizations and within our industry. We ExxonMobil operations depend on a healthy 2.0 co-sponsor the Robert W. Campbell Award, workforce. We take health issues seriously, which honors companies that achieve high whether work-related or not, that impact 1.5 levels of excellence by integrating safety, our workforce wherever we operate in the health, and environmental management into world. Based on ExxonMobil’s internal guid- 1.0 their overall business operating systems. ance for reporting illnesses, which draws Additional information on this and other on U.S. Occupational Safety and Health 0.5 safety and health awards is available on Administration (OSHA) recordkeeping our Web site (exxonmobil.com/awards). regulation, there were 41 work-related 00 01 02 03 04 05 06 07 illness cases among our employees in 2007. *2007 API U.S. petroleum industry benchmark data not available at time of printing. Process Safety. We design inherent safety Of these cases, two led to lost work time. into our facilities by implementing sound The main causes of our illness cases were standards and procedures during facility repetitive stress injuries and hearing impair- design, construction, and start-up activities. ment. We employ a number of programs and lost-time incident rate Additionally, we have quality-assurance pro- metrics to identify and manage work-related (incidents per 200,000 work hours) cesses to verify that materials received meet illnesses, including those not captured by ExxonMobil employees ExxonMobil contractors design specifications and that construction OSHA recordkeeping guidance. API U.S. petroleum industry employee benchmark* is in accordance with applicable standards. Workplace Malaria Control Program. 0.5 For example, at our Sakhalin-1 Project in Russia, we installed a special high-integrity ExxonMobil has the most comprehensive 0.4 pressure protection system to protect the Malaria Control Program of any operator in Africa, covering both employees and 0.3 export oil system. We also protected storage tanks with unique double-rimmed floating contractors. The program combats malaria 0.2 roofs to reduce the likelihood of roof failure through awareness, bite prevention, anti- malarial medication, and early diagnosis 0.1 due to water or snow load. and treatment. Over the last three years, We operate our facilities within established 00 01 02 03 04 05 06 07 we successfully decreased the number of *2007 API U.S. petroleum industry benchmark data not available at time of printing. operating envelopes and applicable regu- malaria cases among our employees and lations. To operate in this way requires contractors. In 2007, we recorded no cases structured inspection and maintenance of malaria among our (nonimmune) expatriate programs, regular testing of integrity critical employees, and there were no reported equipment, and strict procedures to maintain cases of serious malaria among our national safe operating envelopes. Additionally, (semi-immune) employees. ExxonMobil we apply advanced technologies in many business travelers to malaria-prone areas of our manufacturing facilities to alert are also expected to comply with the Malaria operators to investigate potentially abnormal Control Program. operating events. Employee StopAIDS. Our comprehensive We evaluate and train our employees and workplace HIV/AIDS program, StopAIDS, contractors on an ongoing basis to ensure combines risk mitigation education with that individual and team skills match the access to community-based care and treat- requirements needed for safe and reliable ment. Now in its fourth year, the program operations. For example, our Upstream has been implemented in our sub-Saharan business has a competency assurance pro- African operation sites and is expanding to cess for operating and maintenance staff Indonesia and Sakhalin Island, Russia. Read that involves identifying the requirements more about our efforts to combat the spread for every position and a gap analysis of of HIV/AIDS in our case study on page 32. employee skills. It includes training and mentoring on the job. In some complex projects, this also involves assigning new operators to ongoing operations elsewhere, after completion of basic training. corporate citizenship report / 29
a closer look
Strategic Health Management. In develop- To further strengthen our security program, Continuing to meet our goal ing countries, ExxonMobil employs a strategic we are continuously looking for improvement of Nobody Gets Hurt management approach to track employee opportunities and integration of security into Since 2000, we have reduced our health and to develop prevention programs existing systems and processes, including workforce lost-time incident rates by and health care services to respond to OIMS. These efforts include increased work- an average of more than 15 percent per emerging health issues in a timely manner. force involvement and improved capabilities year. We are continuing this trend and for reporting and analysis. In 2008, we will Our Environmental, Social, and Health to meet this challenge, we are strength- reinforce the Security Is Everybody’s Business Impact Assessment (ESHIA) process helps us ening our focus in the following areas: message by introducing enhanced aware- identify opportunities for addressing potential ness programs and training site personnel on Human Factors: We are developing health impacts associated with our projects. s specific security program elements. We have training for our managers and workers By incorporating workforce and community developed a program to share successful on key concepts of human factors health considerations into project planning, security processes among security personnel technology—such as worker fatigue we also support the broader economic at ExxonMobil facilities worldwide. and ergonomics—and how to integrate and social development of the communities solutions into our operations. We are in which we operate (see national content also building a Human Factors Network development on page 31). We look for priority issue to leverage available expertise for opportunities to strengthen existing infra- employment policies best practice transfer and global structure by improving on-site emergency and practices support; and, capability and upgrading hospitals located ExxonMobil actively fosters a produc- in the immediate vicinity of our operations. s Vehicle Safety: From 2004 to 2007, tive work environment that allows each we had eight employee and contractor For example, as part of our Sakhalin-1 of our 81,000 employees throughout our fatalities due to vehicle-related Project, Exxon Neftegas Limited invested global operations to contribute fully to the incidents. These incidents occurred significant funds to upgrade hospitals and achievement of superior business results. outside our facilities and involved medical equipment in the towns of Dekastri, Open-door communication promotes fair- factors beyond our control. To address Nogliki, and Okha in Russia, rather than ness, respect, and effective engagement these risks, we rigorously train our building separate facilities to meet the between management and the workforce. heavy-vehicle operators. In addition, medical needs of our workforce. These We provide numerous opportunities for we recently updated our passenger investments have broadened the capabilities interaction, including regular employee and light-service vehicle operator of the hospitals’ surgeons and trauma forums with senior management on a variety guidelines and will provide further specialists as well as enhanced the quality of business issues and other topics of training to our workforce. In 2008, of medical services available in the area employee interest and concern (see page 5). we plan to develop country-specific to both the residents and our workforce. Our employment practices are governed vehicle safety management plans. security by our Standards of Business Conduct, Our high-quality security program, which support our commitment to equal employment opportunity and prohibition of which includes personnel awareness representative organizations for the purpose regarding potential threats, helps ensure that harassment in the workplace (see page 36). of engaging in collective bargaining in a we can continue to operate in a safe and Additional information about our employment manner consistent with applicable laws, rules, secure manner. In 2007, we continued imple- policies and practices is available on our Web and regulations as well as local customs. menting physical and procedural security site (exxonmobil.com/managementsystems). measures at many of our sites to effectively We support elimination of coerced or Equal Employment Opportunity Policy. protect our personnel and operations. compulsory labor, abolition of child labor, Qualified individuals are provided with equal Security measures consider threats, the and freedom of association. We recruit our employment opportunities in compliance practicality of implementation, and relation- employees and provide working conditions with all applicable laws and regulations. ships with the communities in which we —including payment of wages and benefits— Additionally, it is the Corporation’s policy operate. We continue to improve our threat in accordance with applicable laws and to make special efforts to: assessment and response capabilities, regulations. ExxonMobil employees are at, s 3UPPORT DIVERSITY IN THE WORKFORCE AND which are critical for reacting in a timely or above, the legal employment age in the enhance the representation of women and and appropriate manner given the dynamic country of their employment. Employees minorities through training and develop- threat environment in which we operate. have the right to join associations and choose ment programs; 30 / corporate citizenship report
2007 workforce by geographic region* s 0ROVIDE mEXIBLE WORK ARRANGEMENTS THAT HELP Diversity. Our Global Diversity Framework meet employee needs for balancing work and helps us build a talented and diverse work- Latin America United States family obligations. Our Workplace Flexibility force, which is critical to maintaining our 5065 30,149 Programs include flexible work arrangements position as the world’s leading energy and Canada 6824 and focused assistance programs; petrochemical company. ExxonMobil is com- mitted to promoting leadership opportunities total workforce s 2EASONABLY ACCOMMODATE QUALIlED Asia Pacific for women globally and improving the gender 14,687 80,786 disabled individuals to perform the essential balance in our company. Currently, women functions of their jobs; and, comprise about 25 percent of our worldwide Africa/Middle East s %MPHASIZE MANAGEMENT RESPONSIBILITY IN workforce, excluding company-operated 4490 these matters at every level of the organization. retail stores. Approximately 12 percent of
Europe executive employees are women, compared Harassment in the Workplace Policy. 19,571 to 9 percent in 2000. *Data exclude company-operated retail store employees. Harassment in any form—sexual, racial, reli- gious, or other—is prohibited at ExxonMobil. We are also working to increase the Our policy also prohibits certain behaviors representation of minorities, including that are considered inappropriate in a busi- African-Americans, Hispanics, Asians, and ness setting and incompatible with mutual Native Americans in our U.S. operations. 2007 female management and professional employee respect. We thoroughly investigate Based on U.S. Equal Employment Opportunity new hires by geographic region any harassment claims, and evaluate compli- Commission reporting, minorities made up ance with our harassment policy through an approximately one-third of our U.S. workforce Latin America United States 153 296 annual stewardship process. and about 20 percent of officials and managers in 2007. ExxonMobil has long Canada Nondiscrimination Policy. Any form of 78 supported networks that provide professional discrimination by or toward employees, total Africa/ development, mentoring, and coaching for 1414 Middle East contractors, suppliers, and customers in any 55 women, African-American, and Hispanic ExxonMobil workplace is strictly prohibited. employees. In 2007, the Asian Connection Asia Pacific Europe Our global, zero-tolerance policy applies 603 229 for Excellence (ACE) was formed for Asian to all forms of discrimination, including employees to facilitate sharing of Asian discrimination based on sexual orientation. cultures and enhance our effectiveness in We have deployed a comprehensive educa- working with business partners in Asia. tion, training, and stewardship program to ensure this policy is implemented and percent of women and minorities by workforce development followed by our employees throughout our position in the United States in 2007 ExxonMobil benefits from the cultural Based on U.S. Equal Employment Opportunity Commission reporting worldwide operations. differences, knowledge, and skills of our women minorities ExxonMobil provides benefit coverage employees who represent the diverse to spouses—whether heterosexual or communities of the world. Their combined officials and managers 18.4 19.7 homosexual—based on legally recognized contributions allow us to achieve superior spousal relationships. We determine eligibil- business results and operate in a socially ity according to laws with respect to legally responsible manner. We also have a respon- professionals 29.2 20.9 recognized spousal relationships in the sibility to build a legacy of economic progress individual countries where we operate. In by maximizing the number of local employ- the United States, we have adopted the ment opportunities and investing in the total employees 31.1 32.6 definition of spouse used in federal law, workforce of our host countries, in particular which has the effect of limiting coverage in emerging and developing economies. to heterosexual couples only. However, At year-end 2007, ExxonMobil’s worldwide ExxonMobil employees in the Netherlands, workforce numbered nearly 81,000 employ- Canada, and other international locations— ees, of which about 37 percent were located where national law recognizes same-sex within the United States and 63 percent relationships—are provided spousal benefits internationally. Expatriates comprised nearly under the ExxonMobil program. 4 percent of our total workforce. In 2007, corporate citizenship report / 31
a closer look
ExxonMobil hired more than 3700 manage- technical and apprentice training programs, Training welders on ment and professional employees worldwide, both in-country and internationally, to help Sakhalin Island, Russia of which approximately 38 percent were the national workforce develop the necessary The Welder Training Program— women and 71 percent were hired outside operations and maintenance skills to work sponsored by Exxon Neftegas Limited, the United States. at oil and gas facilities. the U.S. Agency for International Workforce Nationalization. Our strategy for For example, since 1996, we have spent more Development (USAID), and Sakhalin workforce nationalization involves increas- than $30 million on training and development Alaska College—provides skills training ing the number of national employees over in Equatorial Guinea. This has benefited to handle advanced welding equip- the life span of a project and providing the more than 100 national technicians who ment, which affords Sakhalin residents necessary training and education to develop participated in three-year training programs greater employment opportunities. In people for both operational and leadership as well as 47 other national employees who 2005, the first 15 students graduated roles. Over the short term, we employ expa- were trained in a variety of programs abroad. from the program and developed the triates—those working outside of their home necessary skills to work on complex Our commitment to training extends beyond countries on ExxonMobil assignments—to construction activities related to the ExxonMobil employees. In some cases, share their expertise, train, and mentor the Sakhalin-1 Project. There are now personnel from national oil companies national workforce. This ensures the long- more than 60 graduates, and we are work in our offices and participate in term success of our projects and helps us to assessing opportunities to increase technology workshops and training pro- integrate into the communities in which we the scale and reach of this program grams, which further contributes to building operate (for our approach to national content on Sakhalin Island as well as in other national capacity. development, see below). locations around the world.
Training and Development. ExxonMobil is priority issue committed to attracting, developing, and retaining the best people from the broadest national content possible employee pool to meet our business development s Supplier development: Purchasing local needs worldwide. We strive to provide our One of the most important contributions we goods and services, and increasing the employees with the best career opportuni- make to the countries in which we operate capability of suppliers to help them meet ties in our industry. We encourage individual is to ensure that the benefits from our global industry standards in order to qualify growth and achievement of career goals. projects are sustainable over the long term for contracts with ExxonMobil and others In 2007, our training reached more than and that the government and communities (see our case study on page 50); and, do not depend solely on our presence. 35,000 participants, and training expenditures s Strategic community investments: To do so, we employ a variety of economic totaled more than $61 million. To strengthen Providing investments in health, education, support and incentive programs for capacity our technical capacity, we conducted more and infrastructure that assist in the develop- building, collectively referred to as national than 500 in-house technical courses for ment of local capabilities and improve the content development. about 13,000 participants. socio-economic environment of host com- Through a combination of work assignments ExxonMobil has engaged in national content munities (see page 46). development for decades. Our approaches and training, our employees develop the In 2007, we continued rolling out our strat- differ between countries as a function of exist- necessary leadership capabilities for perform- egy for national content development into ing infrastructure, industrial base, and local ing effectively in a variety of environments. developing and operating areas. To assist supplier capabilities. Plans for national content In 2007, more than 3200 employees at various with aligning and sharing best practices development are unique to each location and levels of management from around the world across our operations, we developed our formalized through our business processes, at participated in ExxonMobil’s leadership National Content Development – Guidelines, the local, regional, and global level. Our global development training programs. Approximately Strategies, and Best Practices as well strategy for national content development is 23 percent of participants were women as tools to help facilitate a coordinated broadly focused on three areas: and 55 percent were non-U.S. employees. approach. In addition, we shared the lessons Workforce development: In addition, we developed world-class techni- s Training learned and best practices with host govern- cal training programs for new employees in employees and contractors in technical and ments, national oil companies, joint-venture our operations in Angola, Cameroon, Chad, professional skills necessary for working on partners, and suppliers to help develop a Equatorial Guinea, Indonesia, Italy, Nigeria, existing and future projects and operations collaborative approach across the interna- and on Sakhalin Island, Russia. We fund (see pages 30 and 31); tional community. 32 / corporate citizenship report
case study combating the spread of HIV/AIDS: focusing on sub-Saharan Africa
global concern our approach HIV/AIDS impacts the lives of many s #ONDUCTING HEALTH RISK ASSESS more people than those infected ments to analyze prevalence of HIV/AIDS with the disease. Developing s $EVELOPING A COMPREHENSIVE WORK- nations are hardest hit, with roughly place prevention program, StopAIDS 7 percent of the adult population s %NCOURAGING SAFER BEHAVIOR TO in sub-Saharan Africa infected. keep employees healthy s 3TRENGTHENING LOCAL CAPACITY to better prevent and diagnose HIV/AIDS
AIDS has killed more than 25 million people since the To further mitigate risks to employees, we then determine if a workplace prevention pro- disease was first recognized in 1981. With millions of new gram is necessary. In parts of the world, such as sub-Saharan Africa, where we determined infections each year, the total number of people living that health services infrastructure was gener- with HIV continues to rise, making it one of the most ally insufficient and company health plans did not always provide access to treatment of devastating epidemics known to man. Anti-retroviral HIV/AIDS as for any other disease, we devel- oped a comprehensive workplace prevention therapy can be used to extend survival and improve program, StopAIDS, in 2004. quality of life, but there is no known cure for AIDS. focusing on HIV/AIDS impacts the lives of many more contractors and other business partners to sub-Saharan Africa people than those infected with the disease. incorporate similar programs into their own Assisting our 4000 employees and their fami- Developing nations are the hardest hit, with businesses to enable them to adequately lies in mitigating the HIV risk is important for 65 percent of new infections occurring in manage risk. the long-term sustainability of our business sub-Saharan Africa, where roughly 7 percent and the economic growth of sub-Saharan Throughout our operations, we conduct of the adult population is infected with Africa. Our comprehensive workplace pro- health risk assessments to analyze the preva- HIV/AIDS. gram combines prevention through encour- lence of HIV in the background population; aging safer behavior and changing attitudes, understand risk factors for HIV transmission keeping our workforce with treatment and education of HIV-positive in the general population; evaluate the quality healthy and disease-free workers on how to live safely with the illness of local and national health services infra- The health of our workforce, now and in the through access to community-based care. structure and its capacity in the diagnosis, future, is a significant concern for us. We treatment, and care of HIV/AIDS; and deter- We are addressing the needs of the sub- ensure that our employees and their families mine the level of access to care provided Saharan region through several approaches. have access to programs that can be effec- to employees and families via company The StopAIDS program has now been tive in preventing and slowing the spread of health plans. implemented through our affiliates in Angola, the HIV/AIDS epidemic. We also encourage Cameroon, Chad, Equatorial Guinea, and corporate citizenship report / 33
looking forward
Nigeria. We are also supporting capacity Strengthening and Developing Local building programs through our Africa Health Health Care Capacity. In 2007, the Initiative and our affiliates. StopAIDS coordinator in our joint venture in Cameroon and peer educators conducted an Preventing and Treating HIV/AIDS Through HIV/AIDS awareness campaign at a school. StopAIDS. More than 375 peer educators The event attracted more than 1000 students and facilitators, selected from within and teachers and addressed various topics, ExxonMobil, have been trained by external including myths and beliefs about HIV/AIDS. experts at Population Services International Expanding our program to The focal point was taking responsibility and are delivering confidential adult health Indonesia and Russia for personal actions. education. We have tracked the success A credible workplace HIV/AIDS of the program through a voluntary and We are working in partnership with the education program can be a key confidential workplace survey. Its success Academic Alliance Foundation to train African aspect of any strategy to mitigate is measured through a survey of employee physicians in the latest HIV/AIDS treatment the potential health impacts of large knowledge, attitude, and practice, and and technology at the Infectious Diseases development projects. the results are being used to identify local Institute at Makerere University in Uganda. program gaps and needs. In 2007, average The Institute provides training for health care With the help of well-respected voluntary attendance of our employees in workers and researchers in effective preven- nongovernmental organizations, education sessions ranged from about 50 to tion strategies, new diagnostic tools, and we are in the process of rolling out 75 percent, which is considered to be a good care and treatment protocols for infectious culturally appropriate education participation rate for a voluntary program. diseases. To date, more than 1000 African programs modeled after our StopAIDS health care workers from 23 countries have program approach in Indonesia and We do not test for HIV, and HIV status is not been trained at the Institute. on Sakhalin Island, Russia, where we a factor in determining an employee’s ability have new projects. to work. HIV/AIDS care and treatment are In 2007, we continued to support Safe Blood offered through our company-sponsored for Africa in its efforts to implement blood In Indonesia, Family Health International health plans and HIV/AIDS is addressed like quality programs in Angola, Equatorial is assisting with the development of a other illnesses. Our employees and their Guinea, and Nigeria. For example, for the bloodborne disease prevention pro- families utilize community-based, confidential fourth year, we supported the ExxonMobil gram that expands the focus beyond Voluntary Counseling and Testing (VCT) Nigerian National Training Institute, which traditional HIV to also include other centers for voluntary HIV testing, confidential provides training on safe blood practices preventable life-threatening infections counseling, and treatment. Community- to staff at blood centers, testing labs, and such as hepatitis B. based VCT centers have emerged in most hospital transfusion services. We organ- On Sakhalin Island, Population Services urban areas in the five sub-Saharan African ized 23 trainings that included a total of International is coordinating the local countries where we operate. In 2007, we 262 participants and addressed blood program rollout, with surveys of extended the StopAIDS program to families, screening procedures according to the employee knowledge, attitude, and contractors, and surrounding communities World Health Organization standard for practice; peer education programs; of each affiliate. HIV/AIDS, among other infections. In 2007, and approaches to facilitate access to more than 50,000 HIV rapid test kits were StopAIDS coordinators in each country community-based voluntary counseling distributed through the ExxonMobil Akwa continue to provide updated information and testing resources. Ibom Blood Relief Plan throughout Akwa on the availability of voluntary counseling, Ibom state in Nigeria. testing facilities, and medical treatment. We encourage our affiliates’ StopAIDS groups to Over the past three years, Esso Angola has join nationally recognized organizations and been sponsoring a behavioral-change networks to share best practices for address- program in Bengo province to educate ing challenges associated with combating the community on HIV/AIDS. The program’s the spread of HIV/AIDS. goal is to reach 65 families per week through door-to-door health campaigns and eventu- Our StopAIDS program is embedded in ally educate the province’s entire population safety, health, environmental, and other of approximately 100,000 people. As a result, company training systems and is managed more people are voluntarily being tested for by each participating country’s StopAIDS HIV/AIDS. In 2007, our awareness campaign Committee. Additional information about reached more than 13,000 people and nearly StopAIDS is available on our Web site 3000 volunteered to get tested. (exxonmobil.com/health). 34 / corporate citizenship report corporate governance
priority issue priority issue product political stewardship involvement Minimizing the risks associated Tracking legislation, engaging with with the manufacture, use, and governments around the world to disposal of our products on people advocate our position, and, where and the environment appropriate, making political contributions
priority issue ethics Expecting honest and ethical behavior of employees at all levels through adherence to company policies and controls
ExxonMobil has an unwavering commitment to high At ExxonMobil, we have a long-standing his- tory of leadership in corporate governance. ethical standards and operations excellence. Our In 2007, GovernanceMetrics International awarded us a score of 10 out of 10, an standards of ethics and business integrity, together increase from previous years. Only 1 percent with our workforce, are our most valuable assets. of companies rated received this score. RiskMetrics Group rated our company above Our corporate governance systems and practices are 92 percent of other oil and gas companies on corporate governance issues, and above critical to our success. We take a disciplined approach 53 percent of the Standard & Poor’s (S&P) 500. to corporate governance in every aspect of our busi- financial resource ness and at every location where we operate. We care management about how results are obtained, not just the results. ExxonMobil recognizes that it is our respon- sibility to help meet the world’s growing energy needs while providing competitively priced supplies to our customers and corporate citizenship report / 35
a closer look delivering value to our shareholders. Our Board of Directors Communicating with directors earnings enable us to continue making sizable ExxonMobil’s directors welcome and investments in energy production and As of year-end 2007, of the 12 directors on encourage communications with our technologies that benefit society. ExxonMobil our Board, 10 are independent as defined by shareholders. On average, 15 communi- is investing at record levels—a total of New York Stock Exchange (NYSE) guidelines. cations are received per month and $89 billion on six continents over the last five Only independent directors serve on our responded to as appropriate. The years and almost $21 billion in 2007 alone. Board Affairs, Compensation, Audit, Public Issues, and Contributions Committees. In Board Affairs Committee established Investments for the Long Term. Our invest- 2008, two non-employee directors will retire and oversees procedures for ment decisions are driven by the availability of from the Board under the Board’s usual shareholders and other interested long-term opportunities. Our portfolio consists retirement guidelines. The Board will elect persons to communicate with the of about 120 projects that are expected to ulti- one new non-employee director in January, independent directors. These mately produce about 24 billion oil-equivalent and a second new non-employee director procedures are published in the proxy barrels (net). ExxonMobil participated in seven is expected to be elected to the Board at statement and posted on our Web major upstream project start-ups in 2007, the Annual Meeting of Shareholders in May. site (exxonmobil.com/governance). and in 2008, we anticipate 12 more start-ups The Board Affairs Committee serves as Written communications should be around the world. At peak production rates, ExxonMobil’s nominating committee and addressed to the director or directors in these projects are expected to add nearly follows Guidelines for the Selection of care of the Secretary of the Corporation, 600 thousand oil-equivalent barrels per day. Non-Employee Directors that describe who will forward as intended or hold We also continue to invest in cost-effective qualification criteria of directors. for review at the next regular Board capacity expansion of our existing facilities meeting. Alternatively, shareholders to enhance refinery capacity and yield. The Board schedules frequent, regular executive sessions (for independent directors may send e-mails to a specific Shareholders and Distribution of Returns. only) generally after each regular Board director directly from the corporate Approximately 2.5 million individual share- meeting. In 2007, the Board of Directors met governance page of our Web site holders own about 40 percent of ExxonMobil’s 10 times, and our Committees on Board (exxonmobil.com/directors). common stock, and the remaining shares are Affairs, Compensation, and Audit met owned by institutions, including those that between 6 and 11 times. This year, climate manage mutual funds, teacher equity funds, change topics were again prominent on and public employee pension funds. We are agendas of both the Public Issues Committee committed to delivering superior shareholder and the full Board. value through disciplined capital investment, cumulative distributions to shareholders operational excellence, and a long-term, con- At ExxonMobil, the Committees on Public (over past five years) (billions of dollars) sistent industry perspective. This approach Issues, Board Affairs, Contributions, Compensation, and Audit oversee and dividends results in superior earnings and cash flows share purchases to reduce shares outstanding throughout the business cycle. This model routinely review corporate citizenship issues. has enabled ExxonMobil stock to consistently Key topics reviewed by the committees in 03 11.5 6.5 5.0 outpace the S&P 500 Index over the past 2007 included: 04 26.4 5-, 10-, and 20-year periods. s Public Issues Committee: Reviewed our 13.4 13.0
Over the past five years, we have distributed safety, health, and environmental perfor- 05 49.6 nearly $118 billion to our shareholders mance as part of our annual corporate 20.6 29.0 through quarterly dividend payments and stewardship process and the activities of 06 82.2 28.2 54.0 share purchases to reduce shares outstand- the Global Climate and Energy Project ing. In 2007, our total shareholder distribu- (see page 19); 07 117.8 35.8 82.0 600 tions were $36 billion, including $28 billion s "OARD !FFAIRS #OMMITTEE Reviewed the in share purchases. For more than 100 years, requirements to call special shareholder the Corporation has paid dividends, and meetings, and clarified our Corporate annual dividends per share have increased Governance Guidelines to highlight that every year over the past 25 years. Annual special meetings can be called by the dividend payments per share increased by Board, Chairman, President, or the holder 7 percent in 2007 from 2006, and 49 percent or holders of at least 10 percent of the since 2002. Additional information about outstanding shares in accordance with ExxonMobil financials is available on our New Jersey law; and, Web site (exxonmobil.com/investor). 36 / corporate citizenship report
a closer look
Shareholder proposals and proxy statements
As part of our shareholder engagement process (see page 4), the Corporation receives shareholder suggestions each year. Some of these are in the form of shareholder proposals to be presented in our proxy statement for consideration at the Annual Meeting of Shareholders. Significant suggestions are carefully considered by management and/or the Board of Directors. Typically, we seek a dialogue with the proposal sponsor prior to the distribution of our proxy statement to more fully discuss each other’s position. This dialogue often produces a satisfactory solution, and the proposal is withdrawn by the sponsor. However, when agreement is not reached—for example, such as on adopting a bylaw to recoup unearned incentive pay—the proposal and the Board of Directors’ response and recommendation are published in our proxy statement (see our Web site, exxonmobil.com/proxymaterials). Shareholders vote on each proposal at the Annual Meeting of Shareholders. The Board further evaluates the proposals receiving significant support from shareholders and takes action as appropriate.
Example: "OARD RESPONSE Proposal on adopting a bylaw to recoup The Board agrees that senior executives should not profit on the basis of overstated unearned incentive pay. financial or operating results. However, the Board believes this proposal is unnecessary since the company has long had programs and practices in place to address these Shareholder request: concerns and has taken steps to further clarify this intent. The Board of Directors should adopt a bylaw to recoup unearned incentive The Board’s new Statement on Incentive Compensation in Case of Restatement supports bonuses or other incentive payments this view (see our Web site, exxonmobil.com/governance). Consistent with the Statement, to senior executives if it is later the Board also amended the Short-Term Incentive Program—under which incentive reasonably determined that their bonuses and other payments are granted and paid to our executives—to give the Board performance targets were not achieved the right to require repayment from executive officers in case of a material negative or resulted from overstated financial restatement of financial or operating results. or operating results. With the addition of the new Statement and amendment to the Short-Term Incentive Program, we believe that ExxonMobil has taken the necessary action to enable the company to recoup compensation from executive officers as contemplated by the proposal. In fact, we believe the company’s action is more effective for this purpose than a bylaw action would be and, therefore, substantially implements the proposal.
ExxonMobil’s incentive programs are carefully structured so that at any given time, and in most cases for many years after retirement, a substantial portion of an executive’s personal net worth in the form of outstanding incentive awards will be subject to cancellation or forfeiture if the executive is found to have engaged in detrimental activity.
s Compensation Committee: Drafted lan- commitment to high ethical standards, legal No one at ExxonMobil has the authority guage stating that the Board would seek to compliance, and integrity in the execution to make exceptions or grant waivers with obtain from each executive officer an amount of our business-wide operations is steadfast respect to the Standards. Our integrity corresponding to any incentive award that in every country in which we operate. By and reputation depend on our employees’ would not have been granted or paid had embedding this commitment into our com- understanding of and compliance with these the results as originally reported been equal pany culture and implementing it through our policies. Employees, including supervisors to those restated in case of a financial or management systems, we ensure long-term and managers, are subject to disciplinary operating results restatement. sustainable performance. action up to, and including, termination for violation of our policies. In addition, Standards of Business Conduct. management systems contractors who violate our policies may ExxonMobil’s Standards of Business We comply with all applicable laws and be denied site access. Conduct form the foundation for this regulations, and where laws and regulations commitment and provide each ExxonMobil Control Systems. Business control do not exist, we operate using the highest employee around the globe and our non- systems are rigorously applied at industry standards in all aspects of our employee directors, with a common set of our operations worldwide. Regular self- business. Our global policies and prac- ethical standards. The Standards consist of assessments and audits ensure that operat- tices, including our Corporate Governance guiding principles, 16 foundation policies, ing controls and standards are met by every Guidelines, reflect our commitment to high and open-door communication procedures. operating unit. Our System of Management ethical standards. At ExxonMobil, our corporate citizenship report / 37
a closer look
Control Basic Standards defines the basic Furthermore, LRQA recognized that OIMS United Nations Global Compact principles, concepts, and standards that also meets all the requirements of the ExxonMobil supports the ideals of the drive our business controls. Our Controls Occupational Health and Safety Assessment United Nations Global Compact in the Integrity Management System provides a Series for health and safety management areas of human rights, labor standards, structured approach for assessing financial- systems (OHSAS 18001). the environment, and anti-corruption. control risks, establishing procedures for Best Practices in External Affairs. While we are not a signatory of the mitigating concerns, monitoring confor- At ExxonMobil, we are continually Global Compact, its basic values are mance with standards, and reporting results working to enhance the quality of our embedded in our Standards of Business to management. community engagement and external rela- Conduct, which govern how we operate Our financial controls meet or exceed the tions. Our Best Practices in External Affairs around the world. requirements of the Sarbanes-Oxley Act and (BPEA) initiative is our strategic planning Human Rights the NYSE listing standards. In accordance and management tool for global external with Sarbanes-Oxley and confirmed in an affairs, which allows ExxonMobil affiliates to s 7E PROMOTE RESPECT FOR HUMAN RIGHTS and believe human rights abuses should independent assessment by registered seek and practice excellence in community be condemned (see page 42). auditors of PricewaterhouseCoopers LLP, relationships (see page 44) and national a management-issued report on internal content development (see page 31). This tool Labor Standards controls over financial reporting concluded helps us better understand the viewpoints s !T %XXON-OBIL WE UPHOLD THE FREEDOM that our internal controls system is effective. and concerns of the diverse communities in of association and recognize the right which we operate. In 2007, we implemented of collective bargaining, we oppose all Operations Integrity Management BPEA as part of the Community Awareness forms of forced or compulsory labor, System. Our Operations Integrity element of OIMS for key facilities across our we condemn child labor, and we do not Management System (OIMS) has been in global operations. discriminate in respect of employment place since 1992 and addresses all aspects and occupation (see page 29). of managing safety, health, security, and Additional information about the Standards environmental risks at our facilities world- of Business Conduct, Controls Integrity Environment wide. OIMS is a framework of management Management System, OIMS, BPEA, and other s 7E INCORPORATE A PRECAUTIONARY systems designed to identify hazards and management systems is available on our Web approach to environmental challenges manage associated risks. It provides a sys- site (exxonmobil.com/managementsystems). through science-based risk manage- tematic, structured, and disciplined approach ment (see page 15). across our businesses and facilities world- priority issue wide and enables us to measure progress s 7E SUPPORT INITIATIVES TO PROMOTE greater environmental responsibility and management accountability in these product stewardship (see page 14). areas. It also ensures that we appropriately ExxonMobil is dedicated to minimizing engage the communities in which we the risks and impacts associated with the s 7E ENCOURAGE THE DEVELOPMENT AND operate. We expect our business-line manufacture, use, and disposal of our diffusion of environmentally friendly managers to comply with all OIMS require- products. Our priority is to continue to technologies (see page 16). ments, from project inception to ongoing produce essential commodities in a manner Anti-Corruption operations, and conduct OIMS reviews in that preserves and protects human health, our operations annually. safety, and the environment. We actively s 7E CONDEMN ALL FORMS OF CORRUPTION including extortion and bribery identify and evaluate potential risks to Additionally, the overall effectiveness of (see pages 38 and 40). ensure minimal effects on both people and OIMS is reviewed every five years and adjust- the environment, while improving product ed accordingly. As a result, OIMS has been performance. To ensure that our products gradually upgraded to include behavioral are used in a safe manner, we communicate safety, security, environmental aspects, and potential risks and specify proper product enhanced community involvement. management processes to consumers, third In 2007, Lloyd’s Register Quality Assurance, parties, and the public. Additional informa- Inc. (LRQA), which reviewed our performance tion about our product stewardship policy in 2004, attested again that OIMS meets the and our Product Stewardship Information requirements of the ISO 14001 standard for Management System is available on our Web environmental management systems. site (exxonmobil.com/products). 38 / corporate citizenship report
a closer look
Supply chain Product Safety. Recently, several regulatory appropriately segregated to reduce risks. All and scientific reviews in the United States payments to third parties are expected to The terms and conditions of our and Europe confirmed the safety of our two comply with the Foreign Corrupt Practices procurement contracts require our high-molecular-weight phthalate plasticizers Act and our Guidelines for Payments to suppliers and contractors to adhere and concluded that no further measures Third Parties. Additional information about to the local laws and regulations of were needed to regulate the use of these our policies is available on our Web site the countries where they are working products beyond the limited restrictions that (exxonmobil.com/managementsystems). for us. In addition, our suppliers and already apply in toy manufacturing. If we contractors must also adhere to the Internal Audits. On average, one-third of learn that our products, in specific applica- specific requirements of ExxonMobil corporate business activities and operating tions, do not meet the safety standards policies and procedures on safety, units are audited by our internal audit depart- established by our policy, we discontinue health, security, and the environment, ment each year, and operating units also selling the products in those applications. including the principles of our undergo regular self-assessments. ExxonMobil Standards of Business Conduct. Global Responsible Care Charter. deploys approximately 250 specially trained The same requirements also apply ExxonMobil Chemical Company is internal auditors throughout our facilities to supplier development under our a signatory of the International Council of and business units. Internal auditors have approach to national content develop- Chemical Association’s Global Responsible unrestricted access to facilities, personnel, ment, to ensure that suppliers meet Care Charter. Through OIMS, we are continu- and records. Independent investigations our standards for safety and integrity in ing our efforts to improve our safety, health, are conducted in situations of potential our operations. We periodically conduct and environmental performance; manage noncompliance with ExxonMobil’s Standards audits and reviews of our suppliers chemical safety in a risk-based approach of Business Conduct. and contractors to ensure adherence supported by sound scientific information; Investigations of Potential Policy to our terms and conditions. and facilitate the continued application of Violations. Internal auditors and manage- Responsible Care principles across the ment investigate suspected violations of business value chain. law, business practices, or internal control procedures, which include conflicts of inter- Product Life Cycle and Risk Assessment. priority issue est, exceeding transaction authority limits, To assess potential risks associated with falsified expense reports, misuse of company chemical substances, we developed ethics assets and credit cards, and petty theft. processes to understand potential accu- ExxonMobil complies with all Potential cases of noncompliance are iden- mulation of our products and by-products governmental laws, rules, and tified through internal control procedures, in the environment and humans. ExxonMobil regulations applicable to our business. We supervisory reviews, hotline calls, and recently developed new computer-based expect employee candor at all levels and employee or third-party tips. Each case is tools to predict the environmental behavior adherence to company policies and controls. thoroughly investigated through document and potential hazards of our products. Employees are responsible for reporting sus- reviews and interviews. Confidentiality is Computer models are used to better pected violations of law or corporate policy maintained throughout the process, and understand product characteristics such as to management. Each year, our employees results are reviewed with audit personnel persistence and accumulation in air, water, or are required to confirm that they have read and business management to determine soil as well as toxicity to bacteria and fish. and are familiar with the policies set forth appropriate action. in our Standards of Business Conduct. We These tools help us predict potential risks to conduct detailed training on the Standards Violations by employees lead to disciplinary human health, safety, and the environment on a regular basis to ensure that employees actions up to, and including, separation and improve the design of our products. understand company expectations. from the company. Significant matters are Findings are used to improve product design reported to the Audit Committee of the through use of less hazardous materials. Our Standards of Business Conduct include a Board of Directors. The Board makes no For example, ExxonMobil’s Lubricants and Code of Ethics and Business Conduct, which exception for cases involving an executive Specialties organization developed a com- outlines our policies to prevent bribery and officer or director. mercial vehicle engine lubricant formulation corruption (for our transparency initiatives, to improve environmental performance by re- see page 40). It includes clear guidance on Reporting Suspected Violations. The ducing sulfur, ash, and phosphorous content ethics, gifts and entertainment, conflicts of Corporation provides a number of mecha- without sacrificing operational performance. interest, antitrust, and directorship policies. nisms to employees for reporting suspected Responsibilities for authorizing, approving, violations, including a hotline phone number and recording financial transactions are and mailing address. Correspondence is corporate citizenship report / 39
a closer look handled by a Hotline Steering Committee, In the United States, ExxonMobil contributes ExxonMobil Political comprised of security, audit, law, and human to political candidates in certain states Action Committee resources personnel, and reported to the where applicable laws allow. Exxon Mobil The ExxonMobil Political Action Audit Committee on a quarterly basis. We Corporation contributed a total of $132,100 to Committee (PAC) restricts solicitation expect persons responding to employee legislative and gubernatorial candidates and for voluntary contributions to eligible questions, concerns, complaints, and caucuses in seven states in 2007. executive retirees and senior-level suggestions to use discretion to maintain Canada is the only other country where managers and professionals. PAC confidentiality and protect anonymity to the an ExxonMobil affiliate makes political funds are designated for candidates greatest extent possible. No action can be contributions. Imperial Oil Limited, a majority- who favor the strengthening of the taken or threatened against any employee owned Canadian affiliate of Exxon Mobil free enterprise system and hold views for asking questions, voicing concerns, Corporation, adheres to strict guidelines consistent with the best interests of or making complaints in conformance with and legal limits when making political Exxon Mobil Corporation. In 2007, the company procedures. contributions to registered political parties. first year of the 2007 to 2008 election In Canada, contributions are published cycle, the ExxonMobil PAC recorded priority issue by the Chief Electoral Officer. Additional total receipts of $450,625 from political involvement information is available on the Elections individual participants, and disbursed Canada Web site (www.elections.ca). a total of $296,129, mostly to federal ExxonMobil makes political contributions candidates. In 2007, according to to candidate committees, political parties, Political Lobbying and Advocacy. We CQMoneyline.com, the ExxonMobil associations, and other political organiza- engage with governments around the world PAC ranked approximately 225th in tions, where permitted by applicable laws to effectively advocate the company’s disbursements in their listing of the and as authorized by the Board of Directors. position when necessary. Lobbying is highly top 500 PACs. Reports on how PAC According to our policy, ExxonMobil regulated in the United States. ExxonMobil funds are used can be viewed on the employees, including directors and officers, fully complies with regulations by report- Federal Election Commission Web individually engaging in political activities are ing federal lobbying to the U.S. Congress site (www.fec.gov). expected to do so as private citizens and in a semiannual lobbying disclosure report. not as company representatives. Personal, In 2007, ExxonMobil incurred lobbying lawful, political decisions do not influence expenses—including direct and indirect compensation, job security, or opportunities lobbying expenses as well as salaries, ben- public policy research for advancement. Also, like many corpora- efits, and overhead costs such as building tions, trade associations, labor unions, and rental and utilities—totaling $16.9 million contributions special interest groups, ExxonMobil tracks under the Internal Revenue Code 162(e) ExxonMobil promotes discussion on issues proposed legislation. reporting definition. A complete list of of direct relevance to the company. We federal issues lobbied by ExxonMobil in contribute to a wide range of academic and Political Contributions. The Board of the United States in 2007 can be found policy organizations that research and pro- Directors regularly reviews political contribu- online in our lobbying reports to Congress mote dialogue on significant domestic and tions made by ExxonMobil and our Canadian (search for “Exxon Mobil” as registrant on foreign policy issues, including the Brookings affiliate, Imperial Oil Limited. Where required sopr.senate.gov). Institution, the American Enterprise Institute, by law, these contributions are reported to the Council on Foreign Relations, the Center governing agencies. In 2006, ExxonMobil In addition to corporate lobbying efforts, for Strategic and International Studies, and began posting information about our corpo- ExxonMobil has a grassroots advocacy Resources for the Future. In 2008, we will rate political contributions on our Web site. program called the Citizen Action Team discontinue contributions to several public In 2007, we started publishing an itemized (CAT). Employees and retirees receive policy research groups whose position on list of political contributions made by the periodic e-mail communications from the climate change could divert attention from Corporation, which we update annually. CAT about important pending legislation and the important discussion on how the world We also posted our policy and guidelines energy issues. CAT e-tools enable members will secure the energy required for economic for political activities on the Web site. to contact their elected officials to express growth in an environmentally responsible Information about our contributions to their views on issues of concern to them. manner. Additional information about our political organizations at the national and In 2007, 24 CAT messages were sent to U.S. contributions can be found on our Web state level in 2007 is available on our Web employees and retirees, and more than site (exxonmobil.com/contributions). site (exxonmobil.com/political). 20,000 messages were sent to elected officials using CAT e-tools. 40 / corporate citizenship report transparency and human rights
priority issue Standards of international Business Conduct transparency and Supporting the spirit and intent anti-corruption of the United Nations Universal programs Declaration of Human Rights and the International Labor Organization Supporting transparency programs Declaration on Fundamental to help governments increase Principles and Rights at Work disclosure of financial information
priority issue human rights Promoting respect for human rights and serving as a positive influence in communities in which we operate, while safeguarding the security of our operations
ExxonMobil is committed to honest and ethical priority issue international transparency behavior and opposes corruption by supporting trans- and anti-corruption parency. We are also committed to promoting respect programs for human rights and to serving as a positive influence As part of our commitment to honest and ethical behavior, ExxonMobil constructively in the communities where we operate. It is the right participates in transparency and anti- corruption programs. We offer our assistance and responsible thing to do, and doing so promotes to countries seeking to implement greater stable and constructive business environments. transparency in order to increase disclosure of financial information, which is fundamental to good governance. This can help stabilize the investment climate of a country, which is critical for attracting the large-scale invest- ments necessary for meeting the world’s growing energy demands. corporate citizenship report / 41
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We are an active participant of transpar- government official to champion the initiative Working with governments ency initiatives that apply universally to all and oversee its implementation played a and civil society to implement companies—publicly traded, private, and critical role in Azerbaijan, Kazakhstan, and the Extractive Industries state-owned—with an interest in a country’s Nigeria, and is essential to the progress Transparency Initiative extractive industry; protect truly proprietary being made in implementing EITI in Chad, information; and do not violate the laws of Equatorial Guinea, and Madagascar. s %XXON-OBIL HAS PLAYED A KEY ROLE IN assisting countries such as Azerbaijan, a host government or a company’s contrac- Given the breadth and depth of our experi- Kazakhstan, and Nigeria in their efforts tual obligations. ence with EITI and commitment to support its to implement the Extractive Industries We support initiatives such as the Extractive implementation, ExxonMobil was elected to Transparency Initiative (EITI). Industries Transparency Initiative (EITI), the the EITI Board in 2006 to help represent other Group of Eight (G-8) Transparency Initiative, international oil companies. We are playing s 7E ARE PARTICIPATING IN #AMEROONS implementation of EITI, which has and the United Nations Convention Against a leadership role in shaping industry support already resulted in the publication Corruption, because they are consistent with for EITI and helping EITI transition to a more of two reports by the government our commitment to sound corporate gover- internationalized governance structure. of Cameroon. nance and high ethical standards. Our involvement with EITI, participation in Extractive Industries Transparency many World Bank workshops, encourage- s %XXON-OBIL IS PLAYING AN INDUSTRY leadership role in assisting the Initiative. Established in 2002, EITI encour- ment and assistance to governments, and government of Equatorial Guinea with ages governments to voluntarily disclose engagement with multiple interested parties implementation of reporting under EITI, the revenues they receive from oil, gas, and have enhanced our reputation as a leader by helping educate civil society on EITI mining operations, with revenues verified in promoting transparency. and by getting stakeholders in the EITI by reports of company payments to govern- Transparency Agreements. We have been process to agree on the government’s ments. EITI starts by gaining consent from actively involved in helping to establish trans- work plan for EITI implementation. host governments for reporting of government parency agreements to disclose government We helped prepare a model EITI imple- revenues and payments by companies. For revenues in the countries in which we have mentation work plan, a memorandum the most part, implementing countries have significant investments: of understanding for stakeholders, called for disclosure of company payments reporting templates, and terms of aggregated for all reporting companies. This s Chad (transparency agreement since reference for implementation, which meets the primary purpose of transparency 1999): Since its inception, our project has are being reviewed by the government initiatives, to help ensure that governments been governed by conventions and contracts of Equatorial Guinea, civil society, and use their revenues to benefit the citizens that promote transparency. Payments to the participating companies. of the country. Chadian government have been posted on the Esso Chad and World Bank Web sites EITI’s multistakeholder engagement process s 7E ARE ALSO PROVIDING ASSISTANCE since first oil in 2003. Before EITI, our affiliate to the government of Madagascar is just as important as the information that is in Chad helped facilitate implementation regarding the current status of EITI disclosed by the process. The commitment of a Revenue Management Plan (RMP)— implementation in light of EITI’s new of governments to disclosure helps establish initially developed by the World Bank and the validation procedure. a culture of accountability and reduced government of Chad in 1999 and revised in corruption. ExxonMobil believes that EITI 2006—which includes monitoring by repre- s $URING %SSO #HAD PARTICIPATED is a better approach than other proposals in meetings with Chadian government sentatives of civil society. The revised RMP that mandate disclosure of payments by officials and civil society to facilitate continues to devote substantial resources companies without involving host govern- the establishment of a transparency to the top-priority poverty reduction sectors. ments in the decision-making process. regulation. In December, the govern- Through year-end 2007, Chad’s oil revenues ment of Chad issued a decree, which Gaining the consent of host governments for have reached $2.5 billion. Our participation establishes EITI rules and monitoring increased disclosure requires government-to- in 2007 in a government-initiated process to processes for extractive industries. government dialogue with the assistance of further discuss EITI will promote consistency international financial institutions such as the with project agreements already in place. World Bank and International Monetary Fund. In early 2008, we plan to sponsor and attend These institutions assist host governments in an anti-corruption workshop organized in developing the necessary tools for increasing Chad by TRACE International, a nonprofit their transparency in managing their oil membership organization that specializes and gas interests. The presence of a senior in anti-corruption due diligence reviews and compliance training for members; 42 / corporate citizenship report
s Azerbaijan (transparency agreement priority issue Human Rights provides a comprehensive set of since 2004): The government of Azerbaijan human rights expectations to our majority-owned operating has published reports on its oil and gas affiliates on how to manage our interactions ExxonMobil’s Standards of Business revenues every year since 2003. ExxonMobil with both host government-assigned security Conduct support our commitment to played a leadership role by helping the State and private security providers. Oil Fund develop the reporting templates, human rights (see page 36). Our Standards During 2005 and 2006, ExxonMobil rolled out guidelines, and the memorandum of under- are consistent with the spirit and intent of our Framework on Security and Human Rights standing signed by stakeholders; the United Nations Universal Declaration of Human Rights as it applies to private to majority-owned operating affiliates around s 4HE *OINT $EVELOPMENT :ONE OF companies and with the 1998 Declaration on the world. To facilitate implementation, we Nigeria/São Tomé and Príncipe (transpar- Fundamental Principles and Rights at Work developed supporting model documents, ency agreement since 2004): Payments to of the International Labor Organization. We including guidelines for dealing with host the Joint Development Authority, aggregated hold ourselves to our corporate expectations government security, language for memoran- for all companies for the award of Block 1, on compliance and practices, and we encour- dums of understanding for relationships with were made public by the government in 2004 age contractors and suppliers to observe host country government security, language under a transparency clause. The transpar- similar standards. We establish operations for contracts with private security providers, ency clause was jointly approved by compa- only in places where we are able to abide and reporting and recordkeeping templates. nies and the Joint Development Authority; by our Standards. We use these documents to promote respect for human rights in locations in which we s +AZAKHSTAN (transparency agreement ExxonMobil actively promotes respect for do business. since 2005): ExxonMobil participates in human rights and is committed to complying the National Stakeholders Council, which is with all applicable laws and regulations. The A component of our implementation of the planning to develop and publish a report on responsibility for protecting and enforcing Voluntary Principles and our Framework oil and gas revenues in 2008. We drafted the human rights as well as for developing a includes identifying effective ways to convey terms of reference for the National Stake- legal framework for maintaining security our human rights beliefs and expectations holders Council to oversee implementation is, and must remain, the responsibility of to host governments. For example, in 2006, of EITI. We played a leading role in preparing governments. However, we believe our ExxonMobil Oil Indonesia entered into a the memorandum of understanding signed business presence can and should have a memorandum of agreement (MOA) with by the government, parliament, companies, positive influence on the treatment of people BPMIGAS, the country’s agency responsible and nongovernmental organizations (NGOs) in the communities in which we operate. for managing upstream oil and gas to begin implementing EITI in Kazakhstan. operations, to establish expectations for Security is a fundamental need shared by We plan to present on behalf of the industry government-assigned security in Aceh prov- individuals, communities, businesses, and at Kazakhstan’s first EITI national conference ince, where the company operates. A similar governments alike. Safeguarding company in 2008; and, MOA is anticipated in 2008 for operations personnel and property is critical, and in Cepu province, also in Indonesia. s .IGERIA TRANSPARENCY AGREEMENT SINCE companies must do so in a manner that is 2006): Results of the audit of oil and gas consistent with the laws of the countries in In addition to our own implementation efforts activities from 1999 to 2004 have been posted which they operate, while respecting human of the Voluntary Principles, ExxonMobil on the Nigeria EITI Web site. Discrepancies rights. In certain locations, government secu- believes that constructive engagement among between reported company payments and rity forces may be required to take defensive governments, NGOs, and companies can lead government revenues were reconciled. measures to protect personnel, facilities, to practical guidance that will help address ExxonMobil provided advice and support and operations. Any human rights violations difficult human rights issues. We share many for the implementation of Nigeria’s version that may occur during such operations are of our experiences regarding security prac- of EITI, which includes a three-part audit unacceptable and should be condemned. tices and procedures, country human rights of financials, management processes, and situations, and community consultations Framework on Security and Human Rights. physical volumes. with participants in the Voluntary Principles. Security and respect for human rights can, We also actively participate in organizations and should, be compatible. ExxonMobil such as the International Petroleum Industry formally documented our support of the Environmental Conservation Association Voluntary Principles on Security and Human (IPIECA), Business for Social Responsibility Rights in 2005 through our Statement of (BSR), and the U.S. Council for International Principles on Security and Human Rights. Our accompanying Framework on Security and corporate citizenship report / 43
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Business to provide information and perspec- Involvement with the Voluntary Principles on Security tives to enhance fundamental freedoms, and Human Rights including human rights. We will continue The Voluntary Principles on Security and Human Rights were established with the to exchange information and ideas with recognition that businesses and members of civil society can play a unique role in human rights NGOs through our Citizenship promoting human rights. The Voluntary Principles serve as a forum for engagement Engagement Forums (see page 4). among governments, nongovernmental organizations, and extractive companies, Future Plans. In 2008, as part of our regular with the goal of respecting human rights while maintaining the safety and security internal audits and OIMS internal and exter- of company operations. The Voluntary Principles provide guidance on three major nal assessments, we will continue to test and components: risk assessment, engaging with public security forces, and interacting validate compliance of ExxonMobil majority- with private security forces. owned affiliates with our Framework as well We have been an active participant in the Voluntary Principles dialogue since 2002, and as expectations for government-assigned worked extensively with participants to devise robust language on participation criteria and private security providers. and procedures for involvement in the Voluntary Principles. In 2007, ExxonMobil was To further educate our employees and to elected to serve as one of two corporate representatives on the Voluntary Principles’ emphasize the importance of awareness and Steering Committee. In that leadership position, we have advocated for a constructive respect for human rights, we developed an and inclusive process to improve human rights implementation efforts and awareness. ExxonMobil human rights training presenta- We are also involved with developing appropriate governance and reporting mechan- tion for use in our worldwide operations. We isms for the Voluntary Principles. anticipate global training to be completed Although there have been many successes, the Voluntary Principles are faced with in 2008. periodic challenges. Recent challenges have involved whether the dialogue should be By providing training and raising awareness inclusive or exclusive in nature. Along with most participants in the Voluntary Principles, of human rights issues among our security we advocated for greater engagement with certain host governments that demonstrate providers, we help prevent potential human an interest, willingness, and ability to commit themselves to the guidelines and rights abuses in countries where we operate. procedures of the Voluntary Principles. One of our primary goals is to achieve common Although more challenging in joint ventures levels of understanding and acceptance of the Voluntary Principles among government- in which ExxonMobil has only minority par- assigned security forces. We believe that human rights conditions on the ground ticipation, we are exploring ways to promote will improve more efficiently and effectively when host governments are engaged in the Voluntary Principles in those relationships dialogue and are provided with the practical tools and guidance necessary to carry as well as with contractors who hire private out their human rights responsibilities. security providers when working on ExxonMobil is also participating in in-country Voluntary Principles task forces to advance ExxonMobil projects and facilities. integration of the Voluntary Principles into host country policies and practices. We are ExxonMobil will also be hosting a workshop supporting efforts by governments, civil society, and multilateral institutions to provide with IPIECA and the Regional Association human rights training and education for public security forces as well as to strengthen of Oil and Natural Gas Companies in Latin state institutions to ensure accountability for, and protection of, human rights. America and the Caribbean (ARPEL). Scheduled to be held in Argentina in 2008, the workshop will include participants from governments, NGOs, multilateral institutions, and companies. The workshop will explore the interface between the extractive industry and communities, with a focus on human rights issues unique to Latin America. It will feature experts and practitioners to highlight regional human rights experiences and learn- ings and will provide information and tools for managing human rights challenges.
Additional information about ExxonMobil’s policies and practices is available on our Web site (exxonmobil.com/humanrights). 44 / corporate citizenship report community development
priority issue case study strategic community supporting investments economic progress Funding programs that promote Developing local and national economic growth and thereby reduce suppliers—creating opportunities known barriers to development in through national content development countries in which we operate in Angola, Indonesia, and Russia See page 50
priority issue education partnerships and investments Improving educational programs worldwide to enhance math and science skills and spur develop- ment and economic growth
Making the most of energy resources is about more community relations than oil and gas production—it is about forming a management Our Best Practices in External Affairs global partnership for development, and creating and (BPEA) initiative helps us tailor our delivering sustainable, long-term benefits to local decisions regarding external affairs to the unique business, country, and community communities. Our community involvement extends context in which we operate. To address the Community Awareness element of our beyond philanthropy to job creation and supporting Operations Integrity Management System local businesses. We become an active participant (OIMS), we use BPEA as the strategic planning tool to ensure implementation of in every community where we operate, and we are community awareness programs, including active dialogue and consultation with local committed to making a positive and lasting contribu- communities (see page 37). This dialogue tion built on mutual trust and respect. includes emergency planning and prepared- ness programs that are essential for the corporate citizenship report / 45
a closer look protection of the public, the environment, United Nations Millennium Development Goals and company personnel and assets in the Although governments are primarily responsible for achieving the United Nations event of an incident (see page 4). Millennium Development Goals, progress toward achieving the targets associated with Public Consultations. Because understand- each goal by 2015 can be made only through a collaborative effort by governments, ing and respecting local customs is critical business, development institutions, and civil society. ExxonMobil funds programs for our continued presence in communities, that promote economic growth and thereby reduce known barriers to development we meet with community leaders and in countries in which we operate. Our presence helps countries make progress by: associations to exchange information and better address local issues. We conduct large-scale public consultations during our Environmental, Social, and Health Impact Contributing to Achieving Assessment (ESHIA) process and encourage reducing poverty and universal primary interested parties to ask questions about hunger through strategic education through national potential impacts to their communities and community investments content development environment. We respond by providing (see page 46) and the (see page 31) and our additional information, incorporating mitiga- multiplier effect of national Educating Women tion plans in our project planning, and in some content development and Girls Initiative (see page 31) (see page 46) cases, modifying aspects of the project design. We engage with nongovernmental organizations (NGOs) to help ensure that our public consultation initiatives are as effective as possible. Combating Improving HIV/AIDS, malaria, Indigenous Communities. Because of their maternal health and other diseases ethnic isolation from mainstream society, through our Africa through StopAIDS indigenous communities can be especially Health Initiative (see page 28) and our vulnerable to development. ExxonMobil con- (see page 46) Africa Health Initiative ducts frequent consultations to help address (see page 46) the special needs of indigenous communities in areas where we operate. We mediate and resolve community concerns in a timely manner, and we follow the principles of Reducing child the International Labor Organization (ILO) Ensuring mortality Convention 169 concerning Indigenous and through our environmental Africa Health Initiative Tribal Peoples in Independent Countries, the sustainability through (see page 46) and our United Nations Declaration on the Rights our environmental Educating Women of Indigenous Peoples, and the World Bank performance and Girls Initiative Operational Policy and Bank Procedure (see page 14) (see page 46) on Indigenous Peoples. Our programs for indigenous communities provide both short- and long-term improvements to living standards, with initiatives that address health Promoting gender Developing a care, skills development, and housing. equality and empowering global partnership Property Rights and Resettlement. We women through our for development through respect property rights in the nations in employment practices national content development which we operate. Only with the free, prior, (see page 29), national content (see page 31) and supporting and informed consultation of impacted development (see page 31), the principles of the and our Educating Women Extractive Industries communities will we implement new opera- and Girls Initiative Transparency Initiative tions. Direct compensation programs and (see page 46) (see page 41) community programs that provide micro- development projects are incorporated into our projects. In rare cases where our 46 / corporate citizenship report
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Strategic community projects may require the resettlement of bed nets and other critical interventions in investments through national affected persons, we compensate people the fight against malaria. In 2008, we plan content development on fairly and justly, and follow the World Bank to expand our support of Malaria No More Sakhalin Island, Russia Operational Policy and Bank Procedure on through Idol Gives Back; Involuntary Resettlement. North Sakhalin Credit Program. s !FRICARE INITIATED A COMMUNITY BASED In 2004, the Sakhalin-1 Project malaria project in Kibala, in the Kwanza Sul priority issue province of Angola. In partnership with the Consortium and the U.S. Agency for International Development (USAID) strategic community Ministry of Health and local authorities, the launched the $500,000 North Sakhalin investments Talanganda health post was constructed Credit Program to support financially in an area without health care to serve We have a long tradition of investing in viable small businesses that would 15,000 people from nine surrounding villages. programs that support education, health, not otherwise receive funding from Local health workers, including nurses at and infrastructure through the ExxonMobil commercial banks. the new health post, were trained in the Foundation and the Corporation. We partner diagnosis and treatment of malaria. They To date, the program has loaned more with local institutions, NGOs, governments, are supervising more than 900 community than $1.3 million to small businesses and development agencies to design our health volunteers and 50 traditional birth and helped to create or sustain more strategic investment programs. This is an attendants, who are active in promoting than 500 jobs and 100 businesses. integral element of national content develop- awareness of malaria prevention options In 2007, the North Sakhalin Credit ment (see page 31), and allows us to have a in 138 local communities; and, Program became self-sustaining as greater impact on the communities in which a result of its market-based design. we operate and helps create regional stability. s -EDI3END )NTERNATIONAL IS SUPPORTING Building on the program’s success the training of technicians from Angola, The ExxonMobil Foundation awards grants on Sakhalin Island, we are currently Equatorial Guinea, and Nigeria to learn how through our two signature initiatives—the exploring the possibility of launching to maintain medical equipment. This helps Africa Health Initiative and Educating Women a similar program in Khabarovsk Krai, build local capacity to ensure that available and Girls Initiative—to charitable organiza- the location of an oil-exporting terminal. medical equipment is operational. tions working in Africa and other developing Women’s Health Clinic. The regions around the world where we have According to the Malaria R&D Alliance, the Sakhalin-1 Project Consortium and significant business operations. ExxonMobil Foundation is the largest private the project operator, Exxon Neftegas sector donor—second only to the pharma- Africa Health Initiative. As a major investor Limited, contributed $3 million to ceutical industry—to malaria research in Africa, ExxonMobil recognizes that improv- complete construction of a women’s activities. Additional information about our ing health in Africa is a necessary foundation health clinic. In 2007, the new clinic Africa Health Initiative and efforts to reduce for economic growth and development, and is opened in Yuzhno-Sakhalinsk, the malaria is available on our Web site critical to achieving the company’s business capital of Sakhalin Oblast, and offers (exxonmobil.com/health). objectives as well. Our Africa Health Initiative world-class medical care to up to was established to improve the health of Educating Women and Girls Initiative. 300 patients daily, including women people on the African continent. Since we Although the education of women and girls living in remote towns. Additionally, the launched the Africa Health Initiative in 2000, is closely tied to good health and women’s clinic provides medical care to Exxon we have invested approximately $40 million economic empowerment, women and girls in Neftegas Limited’s 600 employees and to support efforts to fight malaria. many countries do not get the educational their families. support they need and deserve. To help In 2007, we awarded $12.4 million in grants reduce barriers that prevent girls from being to support awareness of and access to educated and to equip women to become malaria treatment and prevention options, leaders in their community, we launched our to promote strategies to build health care Educating Women and Girls Initiative in 2005. capacity at the community level, to fund Extensive research confirms that programs research and development of new drugs directed at educating women and girls can and vaccines, and to improve international have a multiplier effect for local communities, advocacy initiatives. For example: leading to better health conditions, reducing s 4HROUGH A STRATEGIC PARTNERSHIP WITH Malaria poverty, and slowing the spread of HIV/AIDS. No More, ExxonMobil contributed $3 million In 2007, the ExxonMobil Foundation made to American Idol’s charitable initiative Idol grants totaling more than $6 million, bringing Gives Back. The initiative provides life-saving our cumulative investment to more than corporate citizenship report / 47
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$11 million in Africa and other developing 25 women leaders from around the world. countries. We funded projects in areas The GWIM workshops are designed to including infrastructure, safety, and sanita- strengthen program and financial manage- tion improvements of primary and secondary ment as well as communication, fundraising, schools; teacher training; vocational and and leadership skills of women managers nonformal education, including courses on working in community organizations in life skills, health, and civic responsibility; developing countries. To ensure continued leadership and management training; and professional growth and application of new Community health business development and micro-enterprise. skills after training, each GWIM graduate is dispensaries in Chad For example: paired with an alumni coach for a one-year professional coaching relationship. Graduates To help meet the needs of the commu- s 3AVE THE #HILDREN AND !FRICARE TOGETHER also join a network of more than 5200 CEDPA nities in the Oilfield Development Area with the Angolan Ministry of Education, are alumni who are working to improve com- of Chad, ExxonMobil refurbished and addressing the education and health needs of munities worldwide. In 2008, CEDPA will upgraded three community dispen- women and children in Kibala, in the Kwanza conduct the program in Nigeria for women saries. The first one, in Kome, was Sul province of Angola. Building on enthu- across Africa in addition to the United States completed and turned over to the siastic community support for the first six and a Spanish language program in Mexico. community in 2005, and two in Mokassa schools, the ExxonMobil Foundation funded In 2009, CEDPA will expand the program to and Miandoum were completed in the construction of four more schools and the Middle East and Latin America. 2007. Since completion, more than a three community health posts. More than thousand patients have been treated 300 students will benefit from each of the We focus funding efforts through our at the dispensaries. ExxonMobil also 10 new schools, including hundreds of girls Educating Women and Girls Initiative on provides logistical support to the who would otherwise not have had access to local NGOs, consistent with our commit- national polio vaccination days and safe education. The community health posts ment to build the capacity of host countries distributes mosquito bed nets. We have will benefit more than 6600 people in the to effectively partner with multinational reached thousands of people through region, supplying vaccines and essential medi- companies such as ExxonMobil. For health education campaigns about the cines. Together with the Angolan Ministry of example, an NGO in Indonesia is drawing on dangers of HIV/AIDS and how to Health, 60 teachers, 500 health professionals, the training model of the Global Women in prevent the disease. and dozens of community health volunteers Management Program to enhance the skills are being trained in basic hygiene, nutrition, of community leaders. In Angola, two local and the causes of and treatments for malaria NGOs are benefiting from direct funding to and other common childhood diseases; develop the necessary capacity to become more effective partners for implementing s )N +AZAKHSTAN THE !STANA %NTERPRISE our Educating Women and Girls Initiative. Development Center—established by the Additional information about our Educating U.S. Agency for International Development Women and Girls Initiative is available on our (USAID) in 2006—has provided business Web site (exxonmobil.com/womenandgirls). training to more than 4200 entrepreneurs, of whom more than 75 percent were women, and technical assistance to 131 small-medium priority issue enterprises, of which 51 were woman-owned education partnerships or -managed; and, and investments s )N OUR SUPPORT ENABLED MID LEVEL ExxonMobil has a long history of supporting women managers of NGOs from more than and improving educational programs. In the 23 developing countries to participate in developed world, we target math and science leadership and management development education because a basic understanding of workshops through the Centre for Develop- these subjects is increasingly important in ment and Population Activities’ (CEDPA) today’s highly competitive, technology-driven Global Women in Management Program world. In developing countries, basic educa- (GWIM). We also expanded CEDPA’s Alumni tion is necessary to spur development and Coaching Program—launched in 2005 with economic growth. In 2007, we directed more a grant from the ExxonMobil Foundation— than $69.7 million to education worldwide. by supporting a coaching workshop for 48 / corporate citizenship report
a closer look
Practical Skills Training Center In 2007, ExxonMobil continued investing Key U.S. Partnerships. Through grants to for Rural Women, China heavily in math and science education in the National Science Teachers Association’s the United States. We supported initiatives Building a Presence for Science Program In China, many girls from low-income that encourage students to take an active and the Mathematical Association of families in rural areas are forced to interest in careers in the math and science America, we are continuing to support the discontinue their formal education and fields, support the professional development development of math and science teachers move to cities in hopes of finding a job. of highly qualified teachers, and promote and professionals. The Practical Skills Training Center involvement of women and minorities in for Rural Women launched a program In 2005, ExxonMobil partnered with golf these subjects. to help girls with this transition by professional Phil Mickelson to launch the providing vocational and language National Math and Science Initiative. national Mickelson ExxonMobil Teachers training among other topics. By 2006, ExxonMobil became a founding sponsor Academy in Fairfax, Virginia. The Academy 5400 students from across China had of the National Math and Science Initiative provides elementary school teachers with the benefited from this program. In 2007, (NMSI) in 2007 and committed $125 million skills necessary to facilitate student learning ExxonMobil China helped support to support the Initiative, the largest-ever and motivate children to pursue careers in another program focused specifically corporate gift for math and science math and science. Three sessions are held on providing computer training and education in the United States. NMSI is a annually, and to date, a thousand teachers life skills to start a new life in the nonprofit organization that facilitates the have completed this program and are inspir- city. Several girls in the program were national scale-up of programs that have ing students to learn. In 2008, ExxonMobil offered jobs prior to completing a demonstrated impact on improving math will host three Mickelson ExxonMobil Teachers the program. and science education. NMSI’s initial focus Academy sessions, during which 600 elemen- is on scaling up two programs. tary school teachers will be trained.
The Advanced Placement and Pre-Advanced Diversity Initiatives. ExxonMobil works to Placement Training and Incentives ProgramsTM ensure that access to science, technology, Focus on Math and Science. provide rigorous training to Advanced engineering, and mathematics education ExxonMobil relies on technology and Placement (AP) teachers in math, science, is made available, particularly to women innovation in every aspect of its business, and English as well as financial incentives and minorities in the United States. In 2007, and knowledge of math and science is to coach less experienced AP and pre-AP we supported, among others, the Hispanic critical in the energy sector. We employ teachers. Over five years, the number of Heritage Foundation by sponsoring the first approximately 15,000 scientists and engi- students passing AP tests in English, math, Hispanic Heritage Award for Math and neers to help produce and deliver energy and science has significantly increased in Science, increasing our total support of the supplies safely, reliably, and affordably. The schools that offer the programs. Foundation to $1.2 million. We continued to technological innovations necessary to be longtime supporters of the United Negro UTeach has successfully operated at the facilitate human progress and meet key College Fund, American Indian College Fund, University of Texas since 1997 and has more challenges in the years ahead will require National Society of Black Engineers, Society than doubled the number of certified stu- a global workforce highly skilled in fields of Women Engineers, Society of Hispanic dents becoming math, science, or computer making use of math and science. Professional Engineers, and the National science teachers. UTeach encourages math Action Council for Minorities in Engineering Excellence in math and science education is and science majors to become teachers by (NACME). The Corporation also funded directly correlated to the ability of countries offering an integrated four-year degree plan, programs at universities and national to successfully compete and prosper in the early teaching experiences, and financial associations to increase the enrollment of global community of the 21st century. For assistance for undergraduates. women and minority students in geoscience example, the United States ranks behind In 2007, NMSI awarded grants in seven states degree programs. other countries in terms of the proportion for Advanced Placement and Pre-Advanced of students who perform well in math and U.S. Educational Matching Gifts Program. Placement Training and Incentives ProgramsTM science and pursue degrees in these sub- Initiated in 1962, the U.S. Educational and to 12 universities to start UTeach jects. Many math and science teachers in Matching Gifts Program provides a $3-for- programs. Over the next five years, NMSI the United States do not have the benefit $1 matching gift for ExxonMobil employees plans to make additional awards for the of strong content knowledge and training and retirees who donate to higher education expansion of both programs. Additional specific to the subjects they teach. through the ExxonMobil Foundation. In 2007, information is available on our Web site 953 U.S. colleges and universities, the United (exxonmobil.com/mathandscience) or NMSI’s Negro College Fund, the Hispanic Scholarship Web site (nationalmathandscience.org). corporate citizenship report / 49
Fund, and the American Indian College s 3RIRACHA 2ElNERY 3CHOLARSHIP &UND ExxonMobil 2007 community investments by focus area Fund benefited from more than $24 million Thailand: Children in many rural areas are (millions) in matching funds. unable to complete 12 years of formal educa- employee- and arts and tion due to the economic burden on their International Education Initiatives. Our retiree-giving culture families. In an effort to provide less fortunate $32.8 $8.8 worldwide operations expose us to diverse children with the education they deserve, environment civic and educational systems and conditions. These $6.6 community our Sriracha refinery created a scholarship range from modern technology-based class- employee- worldwide total $52.8 fund sponsored by ExxonMobil with giving $206.6 million campaigns rooms to basic infrastructure often in coun- public policy additional donations from ExxonMobil $6.9 tries where education is not easily accessible. research employees. Since the fund’s inception in pre-college $6.2 ExxonMobil strives to meet educational needs education 1998, almost 800 students have been able $27.2 health that are specific to individual countries, and $22.8 to pursue their education, and in 2007 other education in the developing world we focus on improv- $5.3 alone, 190 students received funding. higher ing infrastructure. For example: education $37.2 s 'EOSCIENCE ,EARNING #ENTER +AZAKHSTAN community We helped establish a Geoscience Learning investments and Center at the Kazakh National Technical employee volunteerism University (KazNTU). The Center provides Worldwide Community Investments. Our ExxonMobil 2007 community resources and learning opportunities, worldwide spending includes contributions investments by geographic area including presentations by experts from (millions) to nonprofit organizations as well as funds United States Africa ExxonMobil. This helps prepare students invested in social projects through various $124.1 $31.6 enrolled in the geoscience program to work joint-venture arrangements, production- Asia Pacific $9.8 in the oil and gas industry. From 2004 to sharing agreements, projects operated by 2007, ExxonMobil Kazakhstan Inc. provided Canada others, and contractual social bonus arrange- $9.7 monthly scholarships to 14 students studying worldwide total ments. In 2007, Exxon Mobil Corporation, $206.6 million Latin America $3.1 geoscience at KazNTU, three of whom have its divisions and affiliates, and the also been offered summer internships; ExxonMobil Foundation provided a combined Russia/Caspian $21.9 $173.8 million in cash, goods, and services s #AREER #OUNSELING 5NIT 1ATAR We have Middle East supported projects targeting low-income worldwide. Of the total, $93.9 million $2.7 families and community development through supported communities in the United States Europe $3.7 the Social Development Center since 2001. and $79.9 million supported communities In 2007, the ExxonMobil Foundation contrib- in other countries around the world. uted $300,000 to finance the Center’s Career Employee Volunteerism and Giving. Counseling Unit, which provides career guid- ExxonMobil employees, retirees, and their ance and skills training to high-school and families also contribute their own time and university students. Career counselors help money to charitable organizations. In 2007, students explore their career interests and more than 15,300 ExxonMobil employees, prepare for the job market; retirees, and their families worldwide s ).*!:—*UNIOR !CHIEVEMENT 7ORLDWIDE donated more than 686,000 volunteer hours Affiliate, Egypt: INJAZ teaches young to more than 5400 charitable organizations Egyptian students how business helps im- in 29 countries through company-sponsored prove a community’s prosperity and inspires volunteer programs. Of the total volunteers, them to become entrepreneurs. Throughout 8200 participants donated more than the academic year, INJAZ reaches more than 85,000 hours to almost 900 organizations 13,000 students, mainly from underprivileged in countries outside the United States. communities. In 2007, 36 ExxonMobil Egypt Employees and retirees donated $32.8 million employees volunteered to help teach the through ExxonMobil’s matching gift, disaster INJAZ curriculum and shared their profes- relief, and employee-giving programs. sional experience with youth at local schools When combined with corporate donations, and national universities by teaching practi- ExxonMobil—together with its employees cal skills on how to succeed in the private and retirees—contributed $206.6 million to sector; and, community investments around the world. 50 / corporate citizenship report
case study supporting economic progress: developing local and national suppliers
global concern our approach Entrepreneurs in developing s 0URCHASING GOODS AND SERVICES countries can help vitalize local in-country economies. The lack of an s )NVESTING IN CAPACITY BUILDING OF LOCAL contractors, suppliers, and vendors enabling business framework and supporting services infrastructure s $EVELOPING A RELIABLE SUPPLY CHAIN of local goods and services are just a few of the barriers to s #ONTRIBUTING TO ECONOMIC PROGRESS economic growth. and stability of communities
Widespread poverty, restricted access to education, services benefiting our operations because local suppliers understand our needs as well insufficient business and technical skills, and lack of as the local business environment. We are particularly proud of our accomplishments to new employment opportunities are just a few of the date. Some of these are featured below. barriers to economic growth in developing countries Angola. Based on our success with local around the world. Entrepreneurs in these countries can suppliers in our Kizomba A and B offshore projects, we are continuing to expand their help build local economies, but in many cases, the lack capabilities in the development of Kizomba C. We recognized early in the project life cycle of an enabling business framework and supporting that existing and potential local service pro- services infrastructure undermines their efforts. viders were needed. We invested in training to enhance the capability of local suppliers to By purchasing goods and services in-country deliver goods and services that were aligned creating opportunities with our needs for quality and safety, and and developing long-term supplier relation- through national content ships, multinational companies can serve as our schedule. By developing the use of quali- a focal point for supporting the development development fied and cost-competitive local suppliers, we of a local business community. Multinational ExxonMobil’s presence in communities gen- are contributing to building Angola’s future companies are creating opportunities for erates revenues and taxes, creates jobs, and capacity to support the oil and gas industry. small and medium enterprises, which contrib- supports community development projects. In 2007, project activities included completion utes to the development of a local business One of the cornerstones of national content of a tie-back to existing Kizomba A facilities framework and the necessary infrastructure development is creating economic oppor- and ongoing construction of Kizomba C. to support sustained economic growth. As tunities for local businesses and investing We purchased goods and services in-country, local suppliers and contractors grow, they in developing the capacity and capability of awarded contracts for in-country fabrication create the financial, technical, and manage- local contractors, suppliers, and vendors. and logistics support, and provided training rial expertise that continues to expand local This fosters the development of a reliable and and development to Angolan personnel. We capacity and capability to support the oil sustainable supply chain of local goods and also invested in local pipe fabrication yards and gas industry in the long term. corporate citizenship report / 51
looking forward
to develop the capacity to execute the more on Indonesian manpower and resources from complex work necessary for producing the the surrounding Cepu and Bojonegoro areas. high-strength steel components required in It is the first time that the formal training the construction of the Kizomba C Project. phase for the start-up of a new ExxonMobil project will use 100 percent local resources Over a two-year period, we employed more —91 percent are services and 9 percent than 1.5 million Angolan work hours in the are materials. construction of Kizomba C. We expect to complete our Kizomba C Project in 2008 Russia. Cement is an essential element in Continuing to focus our and are projecting local supplier spending any drilling operation. During the initial drilling efforts in Nigeria to reach over $1.5 billion. This will bring total phases of our Sakhalin-1 Project, our drilling In 2008, we will be creating national spending with local suppliers for develop- contractor imported cement from Singapore content development plans for specific ment activities in Angola to almost $4 billion, because there was no local supplier. We projects through our ExxonMobil which does not include ongoing local worked collaboratively with our contractor Capital Project System (EMCAPS). expenditures for production. and the American Petroleum Institute to A strategic element of the planning identify a cement factory on the Russian Indonesia. At ExxonMobil, our primary goal phase of future projects will include mainland serving eastern Russian and is that every project achieves the desired the creation of a national content western Siberian markets. outcome in a safe and environmentally development plan that is formalized responsible manner. To accomplish this goal Working together with the factory and the and integrated into project plans. in our Banyu Urip Development Project in the drilling contractor, we developed a plan The national content development Cepu Field, Mobil Cepu Limited developed for testing and evaluating the quality of the plan addresses the national content with Indonesian suppliers and contractors cement. We also developed the logistics objectives of local and national safety, health, environmental, and construc- for transporting the cement from the factory governments and also outlines how tion standards that meet our expectations. overland and by ship to the wellsite. we will meet these objectives. More than 90 percent of the work—equivalent Following positive test results, every well in Recognizing the strategic importance to more than 133,000 work hours—was the Sakhalin-1 Project is now supplied by of developing national content, our completed by Indonesians, and the project this cement manufacturer. We continue to affiliates in Nigeria established a was completed with zero incidents. We are regularly assess the facility for safety and national content department to projecting to spend $1 billion on Indonesian quality, to help ensure that ongoing issues ensure appropriate focus. In 2007, our goods and services to complete the project and opportunities are actively addressed by ExxonMobil affiliate, Mobil Producing over the next four years. In the process, we the local manufacturer. To meet our con- Nigeria, increased the value of are committed to helping develop the capac- struction specifications, we also provided expenditures on Nigerian content to ity of Indonesian suppliers to successfully bid training to Russian suppliers on international approximately $1.5 billion, completed on future work in the oil and gas industry. standards. This ensures that the quality of the more than 200,000 engineering work manufactured product is consistent, reliable, Once operational, the Banyu Urip Development hours in-country by Nigerian engi- and meets the expectations of ExxonMobil Project will provide employment opportuni- neering companies, and purchased as well as other companies in the industry. ties to more than 400 Indonesians. Currently, 14,000 feet of pipe in-country. In we are training 61 of our future employees To date, we have placed orders for cement Nigeria, 87 percent of our employee at the Pusdiklat MIGAS training facility, an worth approximately $2.5 million with this workforce is Nigerian. With the inclusion educational institution owned and managed Russian factory and eliminated the need of national content development in by the Indonesian government agency for cement imports from Singapore and the EMCAPS process, we expect responsible for overseeing oil and gas long-term storage. In addition to being cost- to continue to build on our significant operations. Another 40 to 50 Indonesians competitive, the Russian manufacturer is a achievements in Nigeria by further are expected to be enrolled in 2008. The key part of our supply chain, which allows focusing on workforce development, curriculum includes comprehensive training us to maintain our world-class drilling opera- supplier development, and strategic and certification in oil and gas technology tions on Sakhalin Island, including some of community investments in 2008 as well as full English language immersion. the longest extended-reach-drilling wells in and beyond. the world. The factory employs more than In addition, we plan to invest $3 million to 1500 people and plans to increase capacity $4 million, in partnership with the government by 50 percent by the end of 2009. of Indonesia, to train more than 100 Indone- sians to join our highly specialized and skilled workforce. This training initiative capitalizes 52 / corporate citizenship report
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 (April 2005). This index is also cross- referenced with the Global Reporting Initiative (GRI) indicators defined in the Sustainability Reporting Guidelines Version 3.0 (G3).
Report section IPIECA /API GRI Where reported Corporate citizenship at ExxonMobil 1.2, 2.1, 2.3, 3.1– 8, 3.12, 4.1, inside front cover, 4.8, 4.12 1, 8–9, 52, back cover CEO statement 1.1– 2 2–3 Assurance statement 3.13, 4.12 52, inside back cover Engagement activities Communication and engagement SOC-8, ECO-A1 2.5, 2.8, 3.5, 4.4, 4.12, 4.14, 4.16–17 4– 5 Materiality analysis 1.2, 3.5, 3.7, 4.17 6–7 Outlook for energy View to 2030 1.2, EC 2, EC 9 10–11 "USINESS OVERVIEW Company profile and business highlights data ECO-1, ECO-A2, ECO-3 2.1–8, EC 1 12–13, back cover Citizenship performance data ENV-1, ENV-2, ENV-A3, ENV-3, 2.8, 3.9, 3.11, EC 1, EN 16, EN 18, 13 ENV-4, ENV-A6, H&S-4, SOC-3, EN 20, EN 22-23, EN 30, LA 1, SOC-A4, ECO-A1, ECO-2 LA 7, LA 13, SO 6 Environmental performance Managing our environmental performance ENV-6 4.11–12, DMA-EN, EC 2 14–15, 37 Managing climate change risks 4.11, 4.13, EC 2, EN 18, EN 26 15–17 Reducing greenhouse gas emissions from energy production ENV-3, ENV-4, ENV-5, ENV-A8 3.9, 4.12–13, EN 3, EN 5, EN 16, EN 18 17–19 Improving consumer use of energy ENV-A6, ENV-A8 EN 6, EN 18, EN 20, EN 26 19–20 Spill prevention ENV-1 DMA-EN, EN 23 20 Air emissions from operations ENV-A6 EN 20 20 Waste management ENV-A3, ENV-A5 EN 22 21 Water management ENV-A7 EN 8 21, 24–25 Site remediation DMA-EN 21 Regulatory compliance and expenditures EN 28, EN 30 21 Protecting biodiversity ENV-A9 4.8, DMA-EN, EN 12–14 21–23 Workplace Workplace safety and health H&S-1, H&S-2, H&S-3, H&S-4 2.10, 4.12, EC 8– 9, DMA-LA, LA 7– 8 26–29, 32–33, 37 Security SOC-9 DMA-HR 29 Employment policies and practices SOC-4, SOC-7 4.16, DMA-LA, LA 1, LA 13, DMA-HR 29–30 Workforce development SOC-4, SOC-5, SOC-A3 EC 7, EC 9, DMA-LA, LA 1, 30–31 LA 11, LA 13 National content development H&S-3, SOC-A3, SOC-8, SOC-A5 4.8, EC 6– 9, DMA-LA, LA 8, 31, 50–51 LA 11, SO 1 Corporate governance Financial resource management ECO-2, ECO-3 2.6, 2.10, DMA-EC, EC 1 34–35 Board of Directors 4.1–4, 4.7, 4.9 35–36 Management systems ENV-6, H&S-1, SOC-8 4.8, 4.12, DMA-EC, DMA-EN, 36–37 DMA-LA, DMA-SO Product stewardship H&S-5 4.12, DMA-EN, EN 26, DMA-PR, PR 1 37–38 Ethics SOC-2, SOC-6 DMA-HR, DMA-SO, SO 3– 4 38–39 Political involvement SOC-3, SOC-A1 SO 5– 6 39 Transparency and human rights International transparency and anti-corruption programs SOC-A5, ECO-A1 4.12–13 40–42 Human rights SOC-1, SOC-9 4.8, 4.12–13, DMA-HR 42–43 Community development Community relations management SOC-8 4.16, DMA-SO, SO 1 37, 44–46 Indigenous communities SOC-A6 DMA-HR, 4.12 45 Property rights and resettlement SOC-A7 4.12 45–46 Social investments SOC-A3, SOC-8, SOC-A4, SOC-A5 4.13, EC 1, EC 7– 9, DMA-LA, 21–22, 25, 32–33, LA 8, DMA-HR 46–51
DMA: Disclosure on Management Approach
Environmental Resources Management, Inc. (ERM) reviewed ExxonMobil’s 2007 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 (April 2005) and the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines Version 3.0 (G3). We found that the report contents address the indicator requirements shown in the IPIECA/GRI content index. assurance statement Scope of the Assurance. Lloyd’s Register Quality s A review of the documented reporting requirements s Responsibility for annually reviewing and updating Assurance, Inc. (LRQA) was commissioned by against the applicable industry guidelines to assure reporting guidelines is clear and improvement in Exxon Mobil Corporation to review the reporting consistency of scope, definition, and reporting for methodology is regularly undertaken; processes used in the creation of the ExxonMobil each of the relevant indicators; s Guidelines for greenhouse gas (GHG) emissions 2007 Corporate Citizenship Report. The objectives s A review of the reporting processes at headquarters reporting are consistent with and specifically refer to of the review were to validate the integrity of the and at each of the functional business levels to the API, Compendium of Greenhouse Gas Emission reporting processes and to evaluate consistency evaluate the processes used to assure complete- Estimation Methodologies for the Oil and Gas with the following industry guidelines: ness, consistency, and accuracy of metrics reporting Industry (February 2004); and, s IPIECA/API, Oil and Gas Industry Guidance on across ExxonMobil’s global operations; s LRQA believes the ExxonMobil reporting system is Voluntary Sustainability Reporting (April 2005); and, s Reviews of the data-reporting processes at a effective in delivering safety, health, and environmen- s API, Compendium of Greenhouse Gas Emission sample of selected operating sites to assess local tal indicators that are useful for assessing corporate Estimation Methodologies for the Oil and Gas understanding and implementation of reporting performance and for reporting information consistent Industry (February 2004). requirements; and, with IPIECA/API Guidance.
The scope of the assurance was limited to pro- s A review of the processes used to aggregate the cesses for the reporting of safety, health, and information at the corporate level for inclusion in environmental core IPIECA performance indicators the final report. and ExxonMobil-selected additional indicators. Thomas F. Sliva Conclusions and Findings. Based on the scope Verification of data accuracy was not included in the On behalf of Lloyd’s Register Quality Assurance, Inc. of the assurance and the information presented for review scope. ExxonMobil fully acknowledges its April 30, 2008 review, objective evidence was available to support sole responsibility for the accuracy of all information the following conclusions: contained within the report. s ExxonMobil has processes in place that ensure Approach. The assurance was based on interviews sites that contribute to safety, health, and envi- with key personnel to identify the processes in Lloyd’s Register, its affiliates and subsidiaries, and their ronmental metrics understand corporate reporting place to fulfill the IPIECA indicators followed by respective officers, employees, or agents are, individually obligations and are included in corporate and collectively, referred to in this clause as the “LR reviews of the processes for collecting, compiling, SH&E reporting; Group.” The LR Group assumes no responsibility and and reporting these indicators at the corporate, shall not be liable to any person for any loss, damage, or functional business, and operating unit levels. s The methods used for calculating each metric expense caused by reliance on the information or advice These reviews comprised: are clearly defined and communicated; in this document, or howsoever provided, unless that person has signed a contract with the relevant LR Group s s A review of the reported information to confirm the Data collection begins at the operating site level entity for the provision of this information or advice, and inclusion of all core safety, health, and environmental and is ultimately collated and combined into in that case, any responsibility or liability is exclusively (SH&E) performance indicators referenced in the Corporation-wide metrics; on the terms and conditions set out in that contract. IPIECA/API Guidance; s Processes are in place to ensure that the quantita- tive indicators are checked for completeness, consistency, and accuracy; 5959 Las Colinas Blvd. Irving, Texas 75039-2298 exxonmobil.com
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