2010 Corporate Citizenship Report about this report ExxonMobil’s 2010 Corporate Citizenship Scope of the report Assurance Report details our environmental, social, The report covers ExxonMobil’s operations We believe third-party assurance of our and governance performance. The report as of December 31, 2010, unless otherwise report provides an objective evaluation of continues our annual practice of reporting indicated. Both qualitative descriptions and how well we report our citizenship informa- on both our achievements and areas for quantitative metrics are used to explain tion and gives our reporting processes improvement as we work to deliver energy our policies, programs, and practices. For additional credibility. Lloyd’s Register Quality to meet growing world needs. environmental performance data, the unit Assurance, Inc. (LRQA) conducts annual of measure is metric, unless otherwise third-party assurance of the ExxonMobil Reporting standards labeled. Financial information is reported in reporting system. For the full assurance This report was produced in accordance U.S. dollars. statement, see the inside back cover. with the reporting guidelines and indicators ExxonMobil reports greenhouse gas of the International Petroleum Industry emissions on an equity basis for all our Feedback Environmental Conservation Association business operations, reflecting our percent External feedback on our report is a key (IPIECA) and the American Petroleum ownership in an asset. Environmental, component of our continuous improve- Institute (API) Oil and Gas Industry safety, and health data are reported for ment strategy. Comments are reviewed Guidance on Voluntary Sustainability those operations under direct ExxonMobil by management and, in many instances, Reporting (April 2005). In December 2010, management and operational control. In incorporated into the report. We solicit our involvement in a three-year, industry- 2010, ExxonMobil acquired XTO Energy Inc. feedback and identify information gaps, wide process to update the Guidance (see pages 10, 16, and 30). XTO’s integra- strengths, and weaknesses through a concluded with the publication of a new tion is discussed in general terms, but variety of mechanisms, including our Web guide. We plan to report in accordance specific sustainability performance data site, interviews with employees, opinion with the updated Guidance beginning will not be presented until integration has leaders from nongovernmental organiza- in reporting year 2011. The Guidance is been completed. Exxon Mobil Corporation tions, academia, socially responsible or intended to facilitate the comparison of has numerous affiliates, with many names sustainable investment firms, industry nonfinancial reporting across companies, that include ExxonMobil, Exxon, Mobil, and analysts, and our External Citizenship help companies engage stakeholders, drive Esso. For convenience and simplicity, those Advisory Panel (see page 9). For addi- performance, and promote understanding terms, and terms such as Corporation, tional information, to view previous of sustainability issues. company, our, we, us, and its, are some- reports, or to provide comments, please The majority of these indicators are also times used as abbreviated references to visit exxonmobil.com/citizenship or contact: consistent with the indicators used by the specific affiliates or affiliate groups. Ms. Erica Bauer Nevas Global Reporting Initiative (GRI) in the Corporate Citizenship G3 Sustainability Reporting Guidelines ExxonMobil (see our IPIECA/GRI index on page 48). 800 Bell St. Houston, Texas 77002 [email protected]
Materiality analysis
Our materiality analysis process identi- Priority issues are determined by using a fies economic, environmental, and social three-tiered review system that rates each issues that are of particular interest and issue based on its level of significance to concern to both our stakeholders and different stakeholder groups as well as its Tier Tier Tier business operations. Material issues may cumulative business impact. This analysis 3 2 1 have a significant current or future impact allows us to monitor recurring issues and on our company and may expand beyond to identify emerging issues. financial reporting or regulatory issues. The results of the analysis are reviewed by We identify issues of external significance ExxonMobil senior management and are by monitoring stakeholder expectations used to build the content of our report. and concerns through direct dialogue, Level of concern to stakeholders The process promotes internal under- public debate, legislation, international standing of corporate citizenship and Potential impact agreements, and feedback on our report. on business sustainability issues and helps to shape To further evaluate issues of global signifi- our strategies and objectives. In this cance, we look to international reporting report, we discuss those material issues standards and expectations, such as the within the context of ExxonMobil opera- United Nations Global Compact and the tions. For additional information, see our Millennium Development Goals. Web site (exxonmobil.com/analysis). 2010 Corporate Citizenship Report 1
contents 2 4 5 6 8 10 Letter from About Sustainability The Outlook Engagement Performance the Chairman ExxonMobil for Energy: Data and CEO A View to 2030
12 18 20 Safety, Health, Case Study: Corporate and the Operations Governance Workplace Integrity Management System
Personnel safety The OIMS Framework establishes common Board of Directors Process safety worldwide expectations for addressing safety, Shareholder proposals and proxy Risk management and emergency security, health, environmental, and social statements preparedness risk in every aspect of our business. Ethics Workplace security Management systems Employee health Political involvement Product stewardship and product safety Employment policies and practices Diversity
24 30 32 Environmental Case Study: Managing Performance Natural Gas Climate Change Risks
Managing to reduce environmental impacts Natural gas can help reduce greenhouse gas Operational GHG emissions Assessing our surroundings (GHG) emissions and environmental impacts Flaring Protecting biodiversity associated with increased energy use. Efficiency improvements48 exxonmobil.com Draft 6, 4.18.11 Designing our facilities and operations Oil sands IPIECA/GRI Content Index Spill prevention Cogeneration 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 report also Air emissions reductions Carbon capture and cstorageross-references the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines. These standards can be downloaded at Ipieca.org/activities/reporting/reporting_about.php and Globalreporting.org/ReportingFramework/G3Guidelines/. Freshwater management Consumer efficiency Reporting Overview IPIECA /API GRI Where Reported 2.1, 2.3, 2.4, 2.6, 2.9, 3.1, 3.3-3.9, 3.11, Inside cover, 48, inside back About this report and assurance Waste management Science and technology 3.12, 3.13, 4.13 cover, back cover Environmental expenditures Renewable biofuels Letter from the Chairman and CEO 1.1 2-3 About ExxonMobil 2.2, 2.3, 2.5, 2.7, 2.9 4-5 Site remediation Public policy debate Sustainability 1.2 5 The Outlook for Energy: A View to 2030 1.2, EC2 6-7 Engagement SOC8, SOCA5 2.8, 3.2, 4.4, 4.14-4.17, EC6, EN26, SO1 8-9 ECO1, ECO2, ECOA2, ECO3, ENV1, 2.8, 3.10, 3.11, DMA-EC, EC1, EN3, Performance data ENV2, ENVA3, ENV3, ENV4, ENVA6, EN4, EN16, EN20, EN22, EN23, EN30, 10-11 H&S4, SOC3, SOC9, SOCA4 LA1, LA7, HR2, SO6
Citizenship Focus Areas IPIECA /API GRI Where Reported Safety, Health, and the Workplace 38 44 48 Safety, security, and health management H&S1, H&S2, H&S4 4.8, DMA-LA, LA7 12-14 Employee health H&S3 LA8 15-16 Economic Community IPIECA/GRI Product stewardship and product safety H&S5 4.11, 4.12, DMA-PR, PR1, PR3 15-16 Employment policies and practices ECOA2, SOC4 DMA-LA, LA1, LA3, LA12, LA13, EC3 16-17 Development Engagement Content Index Case study: Operations Integrity Management System ENV6, H&S1 4.8, 4.11 18-19 Corporate Governance and Human Board of Directors 4.1-4.5, 4.7, 4.9, 4.10, 4.16, 4.17, LA13 20-21 Ethics SOC2, SOC6 DMA-EC, HR2, SO3, SO4 22-23 Political involvement SOC3, SOCA1 SO5, SO6 23 Rights Management systems ENV6, H&S1 4.8, 4.11, 4.12 23 Environmental Performance Managing to reduce environmental impacts ENV6 4.8, DMA-EN 24-25 Assessing our surroundings ENVA9 DMA-EN, EN13, EN14, SO1 25-26 Designing our facilities and operations ENV6 4.8, DMA-EN 25-26 2.10, 4.8, EN8, EN20, EN22, EN23, Operating with integrity ENV1, ENVA3, ENVA5, ENVA6, ENVA7 26-29 National content plan development Community impacts and relationships Indicators reported EN26, EN28, EN30 and implementation Consultation and engagement Lloyd’s Register QualityRestor inAssurance,g the enviroment Inc. EC6, EN13 29 Case study: Natural gas 4.17, EN26 30-31 Workforce development Indigenous peoples and cultural heritage Assurance StatementManaging Climate Change Risks Mitigating operational greenhouse gas emissions ENV3, ENV4, ENV5, ENVA8 2.10, 3.9, EN5, EN7, EN16, EN18 33-35 Supplier development Land use and resettlement Improving customer efficiency EN6, EN18, EN26 35-36 Investing in long-term scientific research ENVA8 EN6, EN18, EN26 36-37 Strategic community investments Respecting human rights Public policy debate SOCA1 1.2, EC2, SO5 37 Economic Development Employee volunteerism and giving Labor practices National content development SOC8, SOCA5 4.8, DMA-SO, EC9 38-40 Workforce development SOC5, SOCA3 EC7, LA10, LA11 39-40 Revenue transparency Security Supplier development SOCA5 EC6 40-41 Strategic community investments SOCA4, SOCA5 EC1, EC8, EC9, LA8 40-43 Employee volunteerism and giving EC1, EC8, EC9 43 Promoting revenue transparency ECOA1 4.12, 4.13 43 Community Engagement and Human Rights Community impacts and relationships SOC8, SOCA6, SOCA7 4.8, DMA-SO, SO1 45 Consultation and engagement SOCA6, SOCA7 SO1 45-46 4.8, 4.12, 4.13, DMA-HR, HR2, HR3, Respecting human rights SOC1, SOC7 46-47 HR5, HR6, HR7 Addressing security concerns SOC9 4.8, 4.12, 4.13, HR2, HR8 47
DMA: Disclosure on Management Approach. GRI indicators in italics are partially reported. Indicators not in italics are fully reported, but may not be fully reported in individual sections of this report.
Environmental Resources Management, Inc. (ERM) reviewed ExxonMobil’s 2010 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) G3 Sustainability Reporting Guidelines. We found that the report contents address the indicators shown in this index. 2 exxonmobil.com
Letter from the Chairman and CEO
rex w. tillerson, chairman and ceo “Without leadership by example and without thoughtful, honest, and objective self-assessment, no system is sustainable.” Statement to the National Commission on the BP Deepwater Oil Spill and Offshore Drilling, November 9, 2010 2010 Corporate Citizenship Report 3
Welcome to the 2010 Corporate Citizenship Report
This past year, everyone with an interest in the energy industry—and in corporate citizenship more generally— was reminded of the critical importance of corporate accountability and responsibility.
The Deepwater Horizon incident in the Gulf of Mexico last summer shook our industry and the confidence of many of our stakeholders. After 14,000 deepwater wells drilled successfully around the world, this isolated incident caused many to ask fundamental questions about what it means to be a good corporate citizen in the energy industry. The incident was a painful reminder about the importance of integrity and responsible operations.
As you will read in this report, ExxonMobil remains committed to a systematic and unwavering focus on corporate responsibility at all levels. Our own experience after the Exxon Valdez oil spill fundamentally shaped the way our company understands and manages risk. It motivated us to recommit ourselves—that safety, operational excellence, environmental protection, financial discipline, and ethical standards must be a part of our business each and every day.
This year’s Corporate Citizenship Report details our systematic approach to managing our global operations, and the measures we employ to successfully operate in a variety of environments. It describes how we address the challenges of developing energy resources—and supplying that energy to world markets while delivering a return to our shareholders.
There is no question that this requires the constant management of risk. The sustainability of our business is based on our ability to apply consistent processes and systems in our daily operations to ensure that risk is identified, planned for, and successfully managed. We recognize that embedding the highest standards of safety, environmental performance, ethics, economic stewardship, and community engagement in every aspect of our activities is critical to protecting local communities and supporting our company’s long-term success.
It is also critical to meeting the shared challenge that the world faces: how to provide the energy required for eco- nomic growth and improved standards of living while protecting the environment. This challenge is acute because oil and natural gas reserves are often located in remote and sensitive regions. To develop these resources while respecting the local environments and communities in which they are found, we must employ the highest indus- try safety, environmental, and social standards. For example, our project in Papua New Guinea traverses areas requiring careful environmental and cultural planning. As you will read in this report, we are conducting social and environmental surveys in that country and are adapting our project activities accordingly.
To meet growing global energy demand, society will increasingly rely upon new ways to produce resources. One example is Canada’s oil sands—the second largest oil reserves in the world. Investments in the devel- opment and deployment of improved technologies for extraction and transport of this valuable resource are critical. And when done successfully, these technologies can minimize impacts to the environment. Natural gas is another example. Vast amounts of natural gas are located in shale formations around the world. By combining technology with operational excellence, we can safely unlock these supplies for the benefit of this generation and the next. We recognize that there are multiple viewpoints on the appropriate production and use of these resources—as there are with all energy sources—and we are committed to constructive engagement with our stakeholders on these issues.
2010 was a year of significant challenge for the energy industry. We know that the confidence of stakeholders is critical to the industry’s ability to operate and to be successful. From ExxonMobil’s perspective, we are committed to maintaining this confidence by continuing to operate safely, responsibly, and in a manner that promotes the long-term economic, environmental, and social health of our communities.
We hope you find our 2010 Corporate Citizenship Report useful in understanding how ExxonMobil addresses challenges in these important areas. We welcome your comments.
Rex W. Tillerson Chairman and CEO 4 exxonmobil.com
About ExxonMobil
ExxonMobil uses innovation and technology to deliver energy and petrochemical products to meet the world’s growing demand. Our people, technical expertise, financial strength, and global reach provide a competitive advantage and ensure broad exposure to high-quality opportunities—from conventional exploration to opportunities that require close integration across our businesses. Our extensive research programs support operations, enable continuous improvement in each of our business lines, and explore new and emerging energy sources and technologies. The Corporation comprises 10 separate companies, making up the Upstream, Downstream, and Chemical businesses.
Global operations in 2010
Upstream On the Web: Refining Global citizenship stories exxonmobil.com/globalstories Chemical
HIGHLIGHTS $30.5 $32.2 25 billion in earnings billion in capital and billion oil-equivalent exploration expenditures barrels of proved reserves integrated businesses
Upstream Downstream Chemical
Our upstream asset base includes exploration and production acreage in 38 countries and As the largest global integrated refiner, ExxonMobil has interests in 36 refineries in 21 countries. ExxonMobil is a leader in the petrochemical industry, with interests in 51 wholly owned and production operations in 24 countries around the world. Our current portfolio of more than We market our fuel products to millions of customers worldwide through more than 26,000 retail joint-venture manufacturing facilities around the world. Our product portfolio is a unique 130 major development projects has the potential to develop more than 26 billion net oil- service stations and four Fuels Marketing business lines—Retail, Industrial and Wholesale, combination of commodity and specialty businesses that have been developed through pro- equivalent barrels during its lifetime. Aviation, and Marine. We are the world’s largest supplier of lubricant basestocks and a market prietary technology. We are one of the largest producers of aromatics and olefins, the basic leader of high technology and globally recognized synthetic lubricant brands, such as Mobil 1 petrochemical building blocks, and polyolefins, including plastics such as polyethylene and In 2010, three major upstream projects started operations, adding an equivalent of 120 thousand and Mobil SHC. We are also a leading supplier of asphalt and specialty products. polypropylene. Our world-scale, integrated facilities allow us to produce a diverse set of less net oil-equivalent barrels a day to production at peak performance. Between 2011 and 2013, cyclical specialty products that deliver advanced performance and value to our customers we anticipate the start-up of 11 major projects. We sell natural gas in almost all major and In 2010, refinery throughput averaged 5.3 million barrels per day and petroleum product sales in a broad array of applications. More than 90 percent of our businesses are ranked first or developing markets. Total net oil and gas production available for sale in 2010 averaged were 6.4 million barrels per day. second in global market position. 4.4 million oil-equivalent barrels per day. In 2010, chemical prime product sales totaled 25.9 million metric tons.
Crude Oil & Natural Gas
Feedstocks
Research & Research & Engineering Development Production
Upstream Gas & Power Lubricants Fuels Research Exploration Development Marketing Refining & Supply & Specialties Marketing Products
Natural Gas Customers Products Customers Products Customers
HIGHLIGHTS
Interests in Interests in 3 4.4 36 6.4 51 25.9 major upstream million oil-equivalent refineries in million barrels per day manufacturing facilities, million metric tons projects started barrels of net oil and gas 21 countries of petroleum both wholly owned and of chemical prime operations production per day product sales joint venture product sales 2010 Corporate Citizenship Report 5
Sustainability
Our world faces a major challenge: meeting rising global energy demand—which lifts people out of poverty and improves living standards—while addressing the environmental impacts that come with energy use. It is this challenge that lies at the heart of discussions about sustainability and the energy industry. Without energy, there can simply be no improvement in the quality of life of the world’s citizens. ExxonMobil is committed to addressing the challenge of sustainability—balancing economic growth, social development, and environmental protection so future generations are not compromised by actions taken today. We take our commitments in these areas very seriously; they are critical to our ability to do our job well, every day.
Balancing economic growth, social development, and environmental protection Business strategies1: Upstream Identify and selectively capture the highest- quality exploration opportunities Maximize profitability of existing oil and gas production Safety, alth, an U l He d p Invest in projects that deliver superior returns a orkp c the W lace s Capitalize on growing natural gas and i t d r m y n e power markets it a G C e n t ts o o a u n h v rp m h e g e Maximize resource value through high- m i r o R n r C m m a e a impact technologies and integrated solutions o n n t g a e c C a m e g u Downstream n Shareholder Trust H E Maintain best-in-class operations Employee Loyalty Provide quality, valued products, and License to Operate
services to our customers D l E Consumer Confidence a e c t v Lead industry in efficiency and effectiveness o n e
e c e n l o o n Capitalize on integration across ExxonMobil m a p m n m i o m businesses c ir r e v o n n rf t E e Selectively invest for resilient, advantaged P returns Managing Maximize value from leading-edge Climate technologies Change Risks
Chemical Focus on businesses that capitalize on Dow am core competencies nstre Build proprietary technology positions Capture full benefits of integration across ExxonMobil operations Consistently deliver best-in-class performance Selectively invest in advantaged projects
In this report, we articulate how we address We work in sensitive environmental and And, given the events of 2010 in the Gulf of the challenge of sustainability through six social locations to find and produce new Mexico, we are reminded of the fundamental focus areas: Safety, Health, and the Workplace sources of energy. Many of our refining importance of operations integrity. Without a (page 12); Corporate Governance (page 20); facilities are located close to homes and commitment to responsible operations and Environmental Performance (page 24); Managing businesses. We supply essential chemical careful planning in all activities, the energy Climate Change Risks (page 32); Economic products to make other industries—such as industry cannot lay claim to being sustainable. Development (page 38); and Community modern computing, medical supplies, and It is the goal of this report to outline for Engagement and Human Rights (page 44). automobiles—possible. In all such activi- stakeholders how ExxonMobil puts our com- ties—and in the many others, which together These focus areas span the length and breadth mitment to sustainability into practice every comprise our business—a constant focus on of our business, and we recognize the critical day. We invite comment and dialogue on this sustainability is critical to our success. importance of continuous improvement and important area from all who take an interest in excellence in each area. our company and our industry.
1Business strategies referenced in the 2010 Financial & Operating Review 6 exxonmobil.com
The Outlook for Energy: A View to 2030
The Outlook for Energy: A View to 2030, our long-term forecast of supply and demand trends, projects global energy demand in 2030 to be about 35 percent higher than it was in 2005—even with substantial gains in efficiency. Meeting this rising demand for energy in a safe and environmentally responsible way is ExxonMobil’s mission and is a key challenge facing governments and societies worldwide. The scale and nature of this challenge is described in the Outlook, which we use to help guide our investment decisions. We also share it publicly to encourage broader understanding of energy issues.
Doha, Qatar. Many of the hallmarks of human progress—the improvements in how people live, work, and stay safe and healthy—are enabled by energy. As societies and technologies develop, people’s energy usage will continue to evolve.
Population and economic requires managing the risks posed by rising other lower-carbon energy sources become growth drive demand greenhouse gas (GHG) emissions. We project increasingly cost competitive, particularly in global energy-related carbon dioxide (CO2) the power generation sector. Population growth continues to be a key emissions will increase about 25 percent Non-OECD countries will see gains in energy factor behind rising energy demand. Today, from 2005 to 2030. Although substantial, this efficiency and increase their share of cleaner the world’s population is approaching increase is significantly lower than the pro- fuels, but the resulting CO2 savings are more 7 billion, but as personal incomes grow, jected 35-percent growth in energy demand, than offset by the tremendous rise in energy population expansion will slow—a trend reflecting expected efficiency gains and a shift demand needed to fuel rapid economic emerging in the last decade. By 2030, the toward less carbon-intensive energies over development. By 2030, these nations will global population will reach about 8 billion. time. Globally, we anticipate efficiency gains account for approximately two-thirds of will not only curb global energy demand growth Other major influences on energy demand energy-related CO2 emissions worldwide. include economic growth and increasing by almost 65 percent through 2030, but also contribute significantly to offsetting 75 percent prosperity. From 2005 to 2030, the global Diverse mix of reliable, affordable economy will expand at an average rate of the potential growth in CO2 emissions. energy sources required of 2.8 percent per year, but growth will be In OECD countries, CO2 emissions will 1 fastest in Non-OECD countries. By 2030, decline through 2030 even as economic With the scale of the world’s energy needs demand in these nations will rise by more output grows by more than 60 percent and already enormous, it is clear that a mix than 70 percent, led by China and India, population grows by 10 percent. This shift of reliable, affordable energy sources while energy demand in OECD countries will be spurred in part by government policies must continue to be developed in order to will remain essentially flat as efficiency designed to reduce emissions by impos- provide the energy needed for economic growth and societal development. As new gains help offset demand growth. ing a cost on CO2. For the purposes of the Outlook, ExxonMobil anticipates that by 2020, technologies advance, our energy sources Energy-related CO2 emissions adoption of these policies will be equivalent to evolve—growing cleaner and more diverse. Through 2030, there will be significant shifts growth moderates adding CO2 costs of about $30 per metric ton in OECD countries, rising to $60 per metric in the composition of the world’s energy, but Meeting the world’s energy challenges goes ton by 2030. At these levels, natural gas and oil, natural gas, and coal are projected to beyond balancing supply and demand; it also remain the most significant energy sources.
1Dividing the world’s nations into two groups—according to membership in the Organization for Economic Cooperation and Development (OECD)—is useful for studying energy trends. This is because the more than 30 members of the OECD—including Australia, most of Europe, Japan, New Zealand, South Korea, and the United States—generally have more mature economies and well-developed patterns of energy use. Non-OECD countries will have different energy-use patterns because their economies are rapidly advancing. 2010 Corporate Citizenship Report 7
By 2030, they will provide just under Global Progress Drives Demand 80 percent of global energy, down slightly Population Gross domestic product (GDP) Energy demand versus today. Nuclear, along with wind, solar, (billion) (trillion 2005$) (quadrillion BTUs) and biofuels, is projected to grow rapidly, sup- Non-OECD Non-OECD Non-OECD OECD OECD OECD Annual growth Annual growth Annual growth plying about 8 percent and 3 percent of the 2005–2030 average 0.9% 2005–2030 average 2.8% 2005–2030 average 1.2% world’s energy needs in 2030, respectively. 18 100 1200
Liquid supplies diversify 2005–2030 Energy savings through ˜300 By 2030, total liquids demand is expected efficiency gains quads to reach slightly more than 100 million oil- 9 50 600 equivalent barrels per day. Because of their high energy density, availability, and con- venience, liquid fuels will continue to be the fuel of choice for transportation—the sector responsible for about 85 percent of projected 1980 2005 2030 1980 2005 2030 1980 2005 2030 liquids demand growth.
Resources requiring advanced technologies to unlock supplies that exist in geographically challenging locations or that require more Diverse Fuel Mix Meets Demand complex extraction technologies will play an Demand and supply (quadrillion BTUs) increasing role in meeting liquids demand. 2005 2030 By 2030, deepwater and oil sands resources Energy sources: will likely contribute close to 20 percent of Oil Gas Coal Biomass Nuclear Hydro and geothermal Wind, solar, and biofuels worldwide liquids supply, while natural gas ~300 liquids will contribute an additional 10 percent. 300 300
Natural gas adapts to 0.7% growing needs 2.0% ~170 0.7% Natural gas is expected to be the fastest- 150 150 Percentages represent growing major fuel source through 2030, with annual growth/year 2005–2030 its share of global energy rising from about 0.4% 2.3%
20 percent to about 25 percent, displacing 2.1% 9.9% coal as the second most prominent source of Energy sources Energy Energy energy worldwide (see case study, page 30). growth savings This rapid expansion of natural gas demand through 2030 reflects several important factors. One is a steep rise in Non-OECD demand in the residential, commercial, industrial, and power generation sectors. The second is a shift Energy-Related CO2 Emissions Growth Moderates
CO2 emissions Emissions per capita Emissions per GDP away from coal for power generation in order to (billion metric tons) (metric tons/person) (metric tons/2005$k GDP) reduce CO2 emissions in OECD countries. Non-OECD 2005 2005 OECD 2030 2030 Given its abundance, affordability, dependabil- ity, and properties as a cleaner-burning fuel, 40 12 2.0 expanded use of natural gas can help meet growing demand while enabling advancement of environmental goals worldwide.
20 6 1.0 Taking on the world’s toughest energy challenges Supplying reliable, affordable energy in a safe and environmentally sound manner is 1980 2005 2030 OECD Non-OECD OECD Non-OECD critical to enabling advancement and pros- perity. Meeting growing demand will require an integrated set of solutions to expand all economic energy sources, accelerate gains innovation, new technology, and operational On the Web: in efficiency, reduce energy-related CO2 excellence; and reliable policies that promote The Outlook for Energy: A View to 2030 emissions, and develop new energy tech- a level playing field for pursuing a diverse exxonmobil.com/energyoutlook nologies. To provide solutions at the scale mix of commercially viable energy solutions. embodied in the Outlook, the world will need To learn about ExxonMobil’s contributions in tremendous levels of investment sustained these areas, see pages 32 to 37. over decades; an unwavering drive for 8 exxonmobil.com
Engagement
Like most energy providers, we operate at the center of challenging issues that require transparency and responsiveness. Our increasingly diverse group of stakeholders includes governments, non- governmental organizations (NGOs), communities, shareholders, customers, suppliers, employees, and others. External engagement is fundamental to how we conduct our business.
Ongoing dialogue and engagement with our as the Corporate Citizenship Report, Summary On the Web: stakeholders provide opportunities to listen Annual Report, The Outlook for Energy, and Summary Annual Report to concerns, identify material issues, and ExxonMobil Perspectives; and content on our exxonmobil.com/sar benchmark performance against expecta- Web site. tions. We focus our engagement efforts Financial & Operating Review It can be challenging to address certain primarily on groups and individuals directly exxonmobil.com/fo stakeholder issues that directly conflict with impacted by, or who have a direct impact on, Energy Issues and Policy Blog our business practices. Additionally, it is our operations. exxonmobilperspectives.com not uncommon for us to encounter oppos- Our engagement takes many forms, including ing stakeholder views. For example, many The Outlook for Energy: A View to 2030 internal and external one-on-one and group diverse viewpoints exist surrounding shale exxonmobil.com/energyoutlook dialogues and briefings; senior executive gas development using hydraulic fracturing Send us your feedback speeches; quarterly earnings teleconferences; (see page 30). We listen to all perspectives [email protected] focus groups; community consultations; on the energy debate and consider these e-mail communications; publications, such discussions in long-term planning.
ExxonMobil Stakeholders
Governments Communities Shareholders and NGOs 6 524 ~2.5 continents with interactive million individuals exploration and sessions with and more than production activities 44,000 individuals 2000 institutions
GOAL EXAMPLE GOAL EXAMPLE GOAL EXAMPLE Collaborate with Oil spill response Enhance trust and Operational trans- Discuss perfor- Conducting share- public policy communication parency through mance and holder meetings leaders on issues through knowledge guided tours address share- of mutual interest sharing holder concerns In April 2010, the oil spill in the Gulf of The Esso refinery and chemical facility In 2010, we held approximately 35 meet- Mexico highlighted the importance of at Fawley is the largest in the United ings and teleconferences with institutional effective emergency response practices. Kingdom. Each year, employees at Fawley investors and socially responsible ExxonMobil engaged with policymakers volunteer to participate in local community investors on issues, including oil sands and industry leaders to address capabili- projects. To further engage the community development, shale gas development, ties in oil spill prevention and emergency and promote understanding of operations and executive compensation. One of response. Through joint industry task at the facility, guided tours are offered to our institutional investors, the American forces, congressional briefings, and local residents. Each tour provides visi- Federation of Labor and Congress of multiple consultations with the National tors with an introductory presentation of Industrial Organizations (AFL-CIO), sug- Commission on the BP Deepwater Fawley operations, including a detailed gested we adopt principles for climate Horizon Oil Spill and Offshore Drilling overview of safety, in which visitors learn change action. We conducted several and the U.S. Departments of Interior about the site’s safety performance as well calls with the AFL-CIO and concluded and Energy, we supplied input into the as community emergency response pro- that our approach to climate action is response mechanisms and future policy cedures. In 2010, more than 500 residents consistent with their principles. The development. For information about toured the facility, responding positively proposal was withdrawn following our our participation in the development of to seeing firsthand the level of security, agreement to aggregate and post our a marine well containment system, see environmental controls, and safety pro- views and principles to manage long-term page 27. cedures implemented at the site. risks from climate change in one location on our Web site (exxonmobil.com/climate). 2010 Corporate Citizenship Report 9
External Citizenship Advisory Panel
In 2009, we established our first External panelists will be invited to participate in a Mark Cohen Assessment Panel (EAP) to provide an range of activities and discussions relevant Vice president for research independent review of ExxonMobil’s corpo- to citizenship at ExxonMobil. These include Resources for the Future rate citizenship public reporting, including reviewing a draft of the 2010 Corporate the materiality analysis process, content, Citizenship Report and participation in a clarity, and relevance. The panel’s com- tour of ExxonMobil operating facilities, which Elizabeth McGeveran ments on both the 2008 and 2009 Corporate will provide an opportunity for firsthand Senior vice president, Citizenship Reports have been used to observation of our operating standards, Governance and Sustainable enhance our external reporting. processes, and programs. Panelists will also Investment F&C Management Limited convene to discuss environmental, safety, As part of ExxonMobil’s commitment to and social issues of external concern. continuous improvement, we are adjusting Jane Nelson ExxonMobil subject matter experts and the focus of external feedback to include Director of Harvard Kennedy senior management representatives will School’s Corporate ongoing dialogue on citizenship practices, engage with the panelists on these issues. Responsibility Initiative rather than focusing solely on the develop- ment of the Corporate Citizenship Report. We anticipate these opportunities for In 2011, we will establish an External dialogue with the ECAP will not only con- Tim Smith Citizenship Advisory Panel (ECAP), in place tinue to shape our Corporate Citizenship Director and senior vice president, Environment, Social, of the previous EAP, to provide feedback on Report, but will also enhance our overall and Governance Group the development of ExxonMobil’s citizenship approach to addressing stakeholder Walden Asset Management activities, strategy, and communications. interest in the company’s approach to corporate citizenship. Salil Tripathi The ECAP consists of five members, exter- Director of policy nal to ExxonMobil, each with recognized Institute for Human Rights expertise in environmental, social, or gover- and Business nance issues. Over the course of the year,
Customers Suppliers Employees Millions ~175,000 ~83,600 of consumers suppliers of employees2 in and industrial goods and 77 countries customers services around the world
GOAL EXAMPLE GOAL EXAMPLE GOAL EXAMPLE Provide trusted, Packaging Train local suppliers Papua New Guinea— Promote a ExxonMobil Australia quality products optimization to develop a reliable local supplier base leadership- and leadership and safety to customers supply chain safety-based program culture Our lubricants business provides cus- In April 2010, the Papua New Guinea At ExxonMobil, safety is a core value. In tomers with leading-edge technology project opened a resource center to help 2009, ExxonMobil Australia launched a products. Our synthetic lubricants and local companies strengthen their man- program to enhance leadership behavior greases are used across a wide range of agement skills (see page 42). More than and improve the safety culture at our automotive and industrial applications to 4900 Papua New Guinean businesspeople Gippsland operations. Approximately help extend equipment life and reduce received information about the project 95 percent of the workforce responded the number of oil changes needed. We and more than 1000 businesses regis- to a safety culture survey and identified continue to work with customers to tered with the supplier database. This improvement opportunities. In response to develop sustainable product solutions. In database provides access to domestic feedback, in 2010, the Production Company 2010, we redesigned our U.S. multiquart1 company profiles, business assessment delivered the ExxonMobil Fundamentals packaging to incorporate sustainability summaries, domestic business-to-business of Safety course to 600 employees and considerations from both our custom- opportunities, and center events. We contractors. Participants in this two-and- ers’ and ExxonMobil’s standpoints. The have allocated more than $1 million a-half-day program learned best practices new packaging reduces plastic resin to the center to support local supplier in safety leadership and developed safety consumption by up to 7 percent. The registration, assessment, training, and improvement plans. Employees who redesigned bottles and cartons also communication events. The project has completed the training demonstrated allow more cases per pallet, improving invested more than $550 million in Papua improved behavior and a commitment to transportation efficiency and optimizing New Guinean service contracts for the positively influence safety. retailers’ shelf-space utilization. supply of goods and services.
1One quart is approximately equal to 1 liter. 2Number includes XTO Energy Inc. employees following the June 2010 all-stock transaction with ExxonMobil. 10 exxonmobil.com
Performance Data
Efficiently collecting and managing data related to our six citizenship focus areas and the overall financial health of the Corporation is essential to measure performance. To ensure that the citizen- ship data provided in our performance data table and elsewhere in this report are relevant, we selected indicators based on guidance provided by the International Petroleum Industry Environmental Conservation Association (IPIECA) and cross-referenced the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines.
Long-term financial resource of shares are owned by institutions, includ- Taxes. In 2010, ExxonMobil’s worldwide management ing those that manage mutual funds and tax expenses amounted to more than $89 pension funds. For more than 100 years, billion, about three times our earnings in the ExxonMobil’s responsibility is to provide the Corporation has paid dividends. In 2010, same period. In 2010, our worldwide effective competitively priced energy supplies to our shareholder distributions from dividend pay- income tax rate was 45 percent. customers while delivering value to our share- ments and net share purchases totaled more holders. Because the investments we make than $20 billion. Annual dividend payments today can impact our financial performance per share have increased for 28 consecutive XTO Energy Inc.—Data integration for decades, we utilize a disciplined approach years—by 5 percent in 2010 and 53 percent In June 2010, ExxonMobil acquired to pursue and select the most attractive over the last five years. investment opportunities. In 2010, we contin- XTO Energy Inc. Financial and produc- ued investing at record levels—more than Reserves replacement. At year-end 2010, tion data reported for 2010 include XTO $32 billion in capital and exploration expen- ExxonMobil had proved reserves totaling performance. As part of the integration ditures for the year—and we expect to invest nearly 25 billion oil-equivalent barrels or process, ExxonMobil and XTO are cur- more than $165 billion over the next five years. nearly 15 years of reserves life at current rently assessing XTO’s environmental, production levels. In 2010, we replaced health, safety, human resources, and Creating shareholder value. We seek to 209 percent of production including property social data collection requirements and deliver superior shareholder value through sales and 211 percent excluding property processes. Once program differences disciplined capital investments, operational sales. Our five-year average replacement ratio have been identified, we will implement excellence, and the maintenance of a long- was 131 percent. We have replaced more a plan to ensure consistent data collec- term industry perspective. We expect this than 100 percent of production for 17 consec- tion. XTO environmental, health, safety, approach to translate into strong earnings and utive years, as determined on ExxonMobil’s human resources, and social data will not cash flows throughout the business cycle, basis, reflecting our strategic focus on be reported until this integration process which provides the basis for business invest- resource capture and a disciplined approach is complete. ments and distributions to shareholders. to investment and project execution. Approximately 2.5 million individual sharehold- ers own about 50 percent of ExxonMobil’s common stock. The remaining 50 percent
2007 2008 2009 2010 Company Profile Net income, billions of dollars 40.6 45.2 19.3 30.5 Sales and other operating revenue, billions of dollars 390 460 302 370 Net liquids production, millions of barrels per day 2.6 2.4 2.4 2.4 Natural gas production available for sale, billions of cubic feet per day 9.4 9.1 9.3 12.1 1Oil-equivalent production, millions of oil-equivalent barrels per day 4.2 3.9 3.9 4.4 Refinery throughput, millions of barrels per day 5.6 5.4 5.4 5.3 Petroleum product sales, millions of barrels per day 7.1 6.8 6.4 6.4 Chemical prime product sales, millions of metric tons 27.5 25.0 24.8 25.9 2Taxes to governments, billions of dollars 106 116 79 89 Benefits to employees, billions of dollars (wages, salaries, pensions, and other benefits) 13 13 15 15 Spending with suppliers, billions of dollars 231 286 183 231 Capital and exploration expenditures, billions of dollars 21 26 27 32 Long-term debt at year end, billions of dollars 7.2 7.0 7.1 12.2 Total assets at year end, billions of dollars 242 228 233 303 3 Distributions to shareholders, billions of dollars 36 40 26 20
1Gas converted to oil-equivalent at 6 billion cubic feet = 1 million barrels. 2Income, sales-based, and other taxes and duties. 3Cash dividends to ExxonMobil shareholders and share purchases to reduce shares outstanding. 2010 Corporate Citizenship Report 11
Citizenship Data Interpretation: An interpretation indication is provided where ExxonMobil considers the performance trend to be generally desirable ( ), undesirable ( ), or mixed ( ). No interpretation is provided if not applicable. For more analysis and interpretation of data, please see corresponding pages.
2007 2008 2009 2010 Interpretation Page # Safety, Health, and the Workplace Fatalities – employees 0 0 4 0 13 Fatalities – contractors 8 5 4 3 13 1,2Lost-time incident rate – employees (per 200,000 work hours) 0.031 0.053 0.042 0.043 14 1Lost-time incident rate – contractors (per 200,000 work hours) 0.065 0.049 0.040 0.031 14 1,2Lost-time incident rate – total workforce (per 200,000 work hours) 0.048 0.051 0.040 0.036 14 1,2Total recordable incident rate – employees (per 200,000 work hours) 0.33 0.37 0.31 0.23 14 1Total recordable incident rate – contractors (per 200,000 work hours) 0.43 0.49 0.39 0.34 14 1,2Total recordable incident rate – total workforce (per 200,000 work hours) 0.38 0.43 0.35 0.29 14 3Number of regular employees at year end, thousands 81 80 81 84 17 Percent of workforce – non-U.S. 63 63 63 60 17 Percent women – global workforce (excluding company-operated retail stores) 25 25 26 26 17 Percent management and professional new hires – women 38 39 38 40 17 Percent management and professional new hires – non-U.S. 71 69 63 70 17 Corporate Governance Corporate political contributions – U.S. state campaigns and national 527s, millions of dollars 0.27 0.45 0.49 1.1 23 Environmental Performance* Marine vessel spills (owned and long-term leased), number of hydrocarbon spills > 1 barrel 0 0 0 0 27 2Other spills (not from marine vessels), number of oil, chemical, and drilling fluid spills > 1 barrel 253 211 242 210 27 Hydrocarbons spilled (oil spilled), thousands of barrels 7 20 17 8 27 Other spills, thousands of barrels 1 0 1 40 n /a Controlled hydrocarbon discharges to water, thousands of metric tons 1.7 1.8 1.4 1.3 n /a
Sulfur dioxide (SO2) emitted, millions of metric tons 0.21 0.19 0.16 0.14 28 Nitrogen oxides (NOx) emitted, millions of metric tons 0.16 0.15 0.13 0.12 28 2Volatile organic compounds (VOCs) emitted, millions of metric tons 0.31 0.25 0.22 0.22 28 2VOCs emitted, metric tons per 100 metric tons of throughput or production Upstream 0.084 0.069 0.068 0.073 28 Refining 0.015 0.012 0.011 0.012 28 Chemical 0.039 0.043 0.036 0.036 28 Total hazardous waste disposed from operations, millions of metric tons 0.1 0.4 0.8 1.3 28 Environmental expenditures, billions of dollars 3.8 5.2 5.1 4.5 29 Managing Climate Change Risks*
2Greenhouse gas emissions, absolute (direct equity, CO2-equivalent emissions), millions of metric tons 139 130 128 132 34
2Greenhouse gas emissions, normalized (direct equity, CO2-equivalent emissions, excluding cogeneration and Hong Kong Power), metric tons per 100 metric tons of throughput or production Upstream 19.8 18.7 18.1 18.5 34 Downstream 17.4 17.0 16.7 16.6 34 Chemical 42.0 39.8 40.2 38.2 34 Energy intensity, normalized versus Global Energy Management System (GEMS) base year (2000) – refining 93.2 93.4 92.6 91.4 34 Energy intensity, normalized versus GEMS base year (2001) – chemical steam cracking 90.6 91.3 90.3 89.3 34 Cogeneration capacity in which we have interest, gigawatts 4.5 4.6 4.9 4.9 35 2Hydrocarbon flaring (worldwide activities), millions of metric tons 8.0 5.7 4.4 3.6 34 Economic Development Number of employee participants in corporate and technical training (thousands) 35 48 52 61 40 Total corporate and technical training expenditures, millions of dollars 61 69 71 77 40 U.S. spending with minority- and women-owned businesses, millions of dollars 583 603 863 812 40 4Community investments, millions of dollars 206.6 225.2 235.0 237.1 43 United States 124.1 144.6 143.0 154.8 43 Rest of world 82.5 80.6 92.0 82.3 43 5Number of Extractive Industries Transparency Initiative (EITI) participating countries 6 8 8 7 43 Community Engagement and Human Rights 6Number of countries in which affiliates received dedicated human rights awareness training N/A 7 8 1 46 6Percent of private security contracts with enhanced language N/A 50+ 60 75 47
1Incidents include injuries and illnesses. Safety data are based on information available at the time of publication. 2Historical data were updated to reflect improved information, including data collected through the newly introducedEnvironmental Data Management System. 3Regular employees are defined as active executive, management, professional, technical, and wage employees who work full-time or part-time for ExxonMobil and are covered by ExxonMobil’s benefit plans and programs. Number includes XTO Energy Inc. employees following the June 2010 all-stock transaction with ExxonMobil. 4Total contributions include ExxonMobil corporate and XTO donations and employee and retiree giving through ExxonMobil’s matching gift, disaster relief, and employee giving programs. 5In countries where ExxonMobil has an upstream business presence. 6Data first reported in 2008. Human rights and security training has been completed in 16 countries over the past three years. *Some uncertainty exists in environmental data depending on measurement methods. Data represent best available information at the time of publication. 12 exxonmobil.com
Safety, Health, and the Workplace
HIGHLIGHTS 10% 98% 40 reduction in of tested workers technical scholarships lost-time were compliant awarded and 1263 global incident rate with anti-malarial internships and co-op drug regimens assignments sponsored
Performance Overview
What we said in 2009 What we did in 2010 What we plan to do implement proposed enhancements to enhanced leading and lagging process Learn from personnel and process personnel safety metrics and stewardship safety metrics and conducted a personnel safety metrics for continuous improvement processes safety study deploy recommendations from the implement leading process safety metrics continued to lead industry with com- personnel safety study deploy enhancements introduced bined contractor and employee workforce evaluate deployment of OIMS enhance- through the 2009 updates to the lost-time incident rates at best-ever levels ments at the assessable unit level Operations Integrity Management System deployed enhancements to the conclude cross-industry efforts to (OIMS) Framework OIMS Framework understand precursors for serious injuries participate in cross-industry efforts to participated in cross-industry efforts to and fatalities and develop effective understand precursors for serious injuries understand precursors for serious injuries prevention strategies and fatalities and fatalities expand the Culture of Health initiative continue to attract, develop, and retain participated in joint industry task forces across the United States a premier workforce from the broadest to learn from the spill in the Gulf of Mexico identify the best candidates for an possible pool of talent hired 2474 professional employees increasingly diverse workforce through practical work experience, scholarships, and internships 2010 Corporate Citizenship Report 13
Safety and operations integrity are the foundations of ExxonMobil’s business. Nothing is more important.
Safety, security, and health groups aim to develop a set of principles, Another emerging theme identified in the management criteria, and methods for more effective study is that traditional safety reporting and intervention to prevent serious injuries measurement based on incident rates and We hold our commitment to excellence in and fatalities. percentages alone may not always help drive safety, security, and health in the workplace improvement. To make safety more personal, We will not be satisfied until we achieve our as a core value—one that shapes decision we are expanding the use of a new metric, goal of a workplace where Nobody Gets making at every level. This commitment which captures all incidents, including first- Hurt. It is our responsibility to ensure that is documented in our safety, health, and aid and minor incidents. By adding a personal every individual who works at one of our product safety policies and security expecta- element, this metric will better communicate sites returns home as safe and sound as tions, which are implemented through our the real meaning of Nobody Gets Hurt. It will when he or she reported to work. OIMS Framework (see page 18). Both con- also enhance our “reporting culture” and our tractors and employees are required to follow Personnel safety study. Achieving Nobody ability to capture, analyze, and learn from these expectations as a condition of employ- Gets Hurt in the workplace requires us incidents with significant potential conse- ment. In 2010, we deployed enhancements to to continuously assess and enhance quences, rather than just those with actual the OIMS Framework, including expectations our systems, programs, and practices. consequences. We aim not only to analyze related to leadership, process safety, and Experience has demonstrated that each safety incidents after they happen, but also assessment of OIMS effectiveness. enhancement can lead to a period of to identify exposures and at-risk behaviors significant improvement, often followed by before they lead to safety incidents. Personnel safety a plateau in performance at an improved Addressing human factors. Because In 2010, we once again recorded best- incident rate. Recognizing this, we conducted many of our employees and contractors ever combined employee and contractor a personnel safety study to identify new work in shifts around the clock in diverse workforce lost-time incident rates. We have strategies to further improve our safety operations and locations, we recognize the reduced our workforce lost-time incident performance. Over the course of the study, important role of human factors in reducing rate by an average of 9 percent per year the team identified two principal themes: workplace risks. These human factors may since 2006 and 10 percent from 2009 to the importance of leadership behavior and include worker fatigue, ergonomic consider- 2010. A key driver in this performance the role of performance metrics. ations, and physical and mental demands. improvement is the expectation that all In 2010, we promoted the concept of “actively Our Human Factors Technology Center workers take action when they observe a caring” for coworkers. This further estab- of Excellence supports ongoing efforts to coworker who may be in an at-risk situation. lishes an environment where workers will incorporate human factors technology into Where applicable, our recognition programs approach each other when they see potential engineering design and construction, work- reinforce this proactive engagement. hazards or unsafe behaviors, regardless of place layout, safety systems and practices, However, we are saddened to report that we whether the worker is a supervisor, experi- and behavior-based systems. experienced three worker fatalities in 2010. enced employee, or contractor. In addition, Incident investigation and analysis revealed We thoroughly investigated the causes and we are emphasizing safety leadership employee awareness of potential hazards contributing factors associated with each behaviors relevant to roles, workplaces, is often a significant contributor to the incident to learn from them and to prevent and organizations in training and coaching prevention of incidents. Our behavior-based similar events in the future. We have also sessions. For example, in 2010, more than safety approach, outlined in the Loss joined cross-industry working groups with 1000 employees and contractors partici- Prevention System, provides employees representatives from oil and gas and other pated in safety leadership workshops in the with consistent tools to identify and mitigate industries to better understand the precur- Development, Production, Chemical, and risks associated with specific tasks, to sors to serious injuries and fatalities. The Refining and Supply Companies.
Contractor safety in Singapore
The Singapore Parallel Train (SPT) project basic safety standards. Since 2008, more are delivered as needed and cover such workforce is very diverse, with employees than 70,000 workers have received training topics as hazard recognition and working and contractors hailing from 30 countries through the center. at heights. and speaking more than eight languages. At the existing Singapore Chemical and Since the program’s implementation in To safely complete the project, we introduced Refining manufacturing sites, we intro- 2009, more than 500 contractor supervisors a variety of training tools to align this large duced the Contractor Supervisor Safety have received safety training through the and diverse contractor workforce with our Leadership Initiative in 2009 to train all con- initiative. ExxonMobil safety management high safety standards. tractor supervisors in safety leadership and values are now widely applied by supervi- Our on-site SPT Safety Training Center communication. In addition to site-specific sors, and the use of safety and equipment provides an Enhanced Safety Orientation training, a one-day Contractor Supervisor checklists for work planning and execution Course that must be completed before Safety Workshop (CSSW) is required has also improved. any worker gains access to the site. The to receive certification as a contractor course is conducted in eight languages supervisor. The CSSW focuses on basic and provides training in construction roles and responsibilities and reinforces safety, oil and petrochemical safety, and the safety mindset. Other training modules 14 exxonmobil.com
conduct self-assessments while working, In our operations, we focus on training Lost-Time Incident Rate1 to observe others and provide feedback on employees in process safety and effective (incidents per 200,000 work hours) their behaviors (see below), and to analyze procedures, including best practices for our ExxonMobil employees ExxonMobil contractors API U.S. petroleum industry employee benchmark losses and near-losses. By identifying and higher-risk activities, such as start-up and preventing at-risk behaviors, the likelihood shut-down of operations when maintenance 0.38 of incidents occurring or escalating can is conducted (see OIMS case study, page 19). often be greatly reduced. In 2010, many sites launched efforts to further engage employ- Risk management and ees and contractors in behavior-based emergency preparedness safety systems. 0.19 Risks associated with safety, security, health, Process safety and the environment are inherent in our business. ExxonMobil takes a disciplined Effective process safety management leads approach to business continuity planning to the prevention of uncontrolled releases 03 04 05 06 07 08 09 10 and emergency preparedness. Emergency of hydrocarbons, chemicals, and other sub- Support Groups—comprising business lines; stances. Failure to contain these substances human resources; law; finance; safety, secu- can lead to significant incidents such as fires rity, health, and environment; public affairs; Total Recordable Incident Rate1 and explosions, with potential for serious and other technical advisors—develop and (incidents per 200,000 work hours) injuries and fatalities, widespread environ- exercise emergency response strategies. ExxonMobil employees ExxonMobil contractors mental impacts, and property damage. Our API U.S. petroleum industry employee benchmark Emergency Response Teams are organized process safety management framework at local and regional levels to respond to 1.5 focuses on reducing risks and incidents incidents as needed. through OIMS, including facility design and operation. We continuously seek to improve Effective preparedness is dependent on these areas by learning from incidents and training. Response team training includes near-misses in our own operations and orientation, simulations, and full exercises. 0.75 across our industry. We are committed to Every site conducts emergency drills on a learning lessons from the tragic Deepwater frequent basis, ranging from routine fire drills Horizon incident and are working with joint to full-scale exercises. In 2010, compre- industry task forces to develop improved hensive drills were conducted in Angola, Barbados, Cameroon, Canada, Chad, 03 04 05 06 07 08 09 10 prevention, containment, and response plans. In 2010, we implemented new process Equatorial Guinea, Germany, Guam, and the 1Incidents include injuries and illnesses. Safety data are based on information available at the time of publication. safety metrics to enhance our ability to learn United States. These drills often involve 100 from all levels of incidents. or more representatives from ExxonMobil; local affiliates; local, state, and federal gov- At our facilities, we focus on best practices ernments; and industry. in design, mechanical integrity, and upgrades using advanced technologies.
A culture of safety
To be fully effective and to drive sustained Djekilamber Mbainade safety performance improvements, we pro- Contracted pipefitter, Chad actively develop a safety culture grounded in The day’s appointed safety observer leadership at every level of the organization. Each morning, the supervisor designates a new safety observer. Today, it was me Leadership so I had the job of leading the morning toolbox safety meeting. This morning, we talked about personal protective equipment needed for today’s work, expected hazards, Safety Culture and then we did a “step back 5x5.” That’s a procedure where we all talk about hazards and what to do about them before begin- Employee Behavior ning a task. Then I watched closely all day. I guard the safety of my friends. While they concentrate on work, I concentrate on their Safety Performance safety. I have the power to stop the work if I see something happening where I can help. Even though my job is pipefitter, we all learn Workplaces where all the time about safety, how we can keep Nobody Gets Hurt ourselves and our team members safe. 2010 Corporate Citizenship Report 15
Workplace security At ExxonMobil, Security is Everybody’s Business. We provide security and safe- guards to protect our people, facilities, business information, and other assets. In 2010, we completed a multiyear, comprehen- sive project to strengthen security at our facilities globally. For more information about security at ExxonMobil, see page 47.
Employee health A healthy workforce benefits our business and the broader community. At ExxonMobil, we provide programs and services to help our employees live healthier lives. We incorporate workforce and community health International Marine Transportation employees conduct safety drills on a range of possible scenarios to respond quickly and effectively to incidents. considerations into project planning (see pages 39 and 41). preventive medication, and early diagnosis commemorate the day included employee Participation in prevention programs is key to and treatment. Insecticide use is kept to a and contractor communications from senior maintaining a healthy workforce and respond- minimum to protect the health of our workers managers, educational leaflets, souvenirs, ing to emerging health issues. In 2010, a and to minimize environmental impacts. and donations to local health centers. cholera outbreak occurred in Port Moresby, We track employee and contractor inci- Papua New Guinea. In response, we estab- Product stewardship and lished a cholera response working group to dences of malaria in eight countries with identify measures to prevent further spread upstream operations. In 2010, 11 malaria product safety of the disease. Initiatives like publishing cases were reported out of the thousands We actively identify and evaluate ways to miti- prevention-related materials for employees of nonimmune workers located in or visiting gate possible effects of our products on both and contractors, establishing a screening endemic areas. Approximately 98 percent of people and the environment while improving process upon camp entry, ensuring adequate workers tested were compliant with preven- product performance. During the development handwashing facilities, and establishing tive drug regimens. To learn about our efforts of, and prior to marketing our products, we cholera triage areas prevented the spread of to create healthy communities, see page 41. assess safety, health, and environmental (SHE) aspects as well as compliance with product cholera to project worksites. Through a part- Employee StopAIDS. Our workplace HIV/ safety legislation, both where the products are nership with the Salvation Army, the project AIDS program, StopAIDS, combines risk made and in their intended markets. Rigorous also helped establish a community cholera mitigation education with access to com- assessments required by government care clinic in Port Moresby. munity-based care and treatment to keep authorities are conducted and updated as new Workplace Malaria Control Program. healthy workers disease-free and to educate information becomes available to assure the Approximately half of the world’s population HIV-positive workers on living safely with the safety of a new or modified product. Products live in areas at risk of malaria transmission. illness. ExxonMobil does not test for HIV, and used in particular markets, such as those that ExxonMobil has established strong busi- HIV status is not a factor in determining an come in contact with food, undergo additional ness partnerships to effectively protect employee’s ability to work. SHE assessments as appropriate. employees and contractors working in More broadly, in December 2010, ExxonMobil In addition, we provide information to those malaria-prone areas. Our Malaria Control affiliates in Nigeria and Papua New Guinea who transport, use, and dispose of our prod- Program comprehensively combats malaria supported World AIDS Day. Activities to through awareness, mosquito bite prevention, ucts, including appropriate uses, potential
Product stewardship in the Chemical business
Increasingly, our customers look to us In 2007, a European Union (EU) regula- 2013 and 2018 registration deadlines. The to help them achieve their sustainability tion for chemicals manufactured or used objectives of REACH are aligned with our goals. In 2008, we created our Chemical in EU member states went into effect. The commitment to product stewardship and Research Sustainability Team, which REACH regulation requires manufacturers accessibility of information. is responsible for conducting life cycle or importers to register and provides the Through the International Council of analyses (LCA) to support every Chemical European Chemical Agency with the right Chemical Associations, ExxonMobil business unit. LCAs allow us to evaluate to evaluate and authorize chemicals. In Chemical promotes the safe management product benefits and to design products in 2010, ExxonMobil submitted more than of chemicals as outlined in the principles of response to customer demands. Typically, 500 dossiers covering all substances the Global Product Strategy. We support an LCA study can take from three to more needing registration by the 2010 regulatory voluntary programs such as Responsible than 12 months to complete, depending on deadline. We are now focused on updat- Care® and the Global Product Strategy in the breadth and complexity of the project. ing our Safety Data Sheets and preparing developing regions of the world. dossiers for lower-volume substances with 16 exxonmobil.com
Employee benefits and programs. We provide all employees with a competitive package of benefits and programs, which varies based on the legal requirements and culture of countries. Benefit coverage for spouses is based on legally recognized spousal relationships in the individual coun- tries where we operate. In the United States, we have adopted the definition of spouse used in federal law, which provides benefits to heterosexual couples. Employees in coun- tries where national law recognizes same-sex relationships are provided spousal benefits under ExxonMobil programs.
We take our benefit plan commitments seri- Achieving Nobody Gets Hurt in the workplace requires us to continuously assess and enhance our ously. The funding levels of all qualified pension systems, programs, and practices. plans are in compliance with standards set by applicable law or regulation. All defined benefit health and environmental effects, personal Employment policies and pension obligations are fully supported by the protection and exposure controls, first aid financial strength of the Corporation or the measures, and disposal considerations. practices respective sponsoring affiliate. Through a disciplined surveillance process, Our employment practices are governed by Employee engagement. ExxonMobil seeks we tailor our product safety warnings to comply our Standards of Business Conduct, which to create an environment of open communi- with current and emerging local regulations. support our commitment to equal employ- cation with our more than 83,000 employees. In 2010, more than 400,000 Safety Data ment opportunity, prohibit harassment and During the annual performance assessment Sheets covering more than 130,000 unique discrimination in the workplace, and are con- and development process, all employees products were distributed to customers in sistent with applicable laws and regulations have a structured, documented discussion more than 85 languages. of the countries in which we operate. with their supervisors about work goals, OIMS and other management systems Policies against discrimination and harass- training objectives, and development needs. ensure compliance with product steward- ment. Any form of discrimination by or toward This process provides the basis for ongoing ship regulations in more than 150 countries. employees, contractors, suppliers, and employee coaching and continuous perform- Our Product Stewardship Information customers in any ExxonMobil workplace is ance improvement. Employees are actively Management System (PSIMS) applies strictly prohibited. Our global, zero-tolerance developed throughout the course of their common global processes and a single policy applies to all forms of discrimination, careers with training, mentoring, and oppor- global computer system to capture and including discrimination based on sexual tunities to join professional networks. communicate information on the safe han- orientation and gender identity. Harassment, Engagement with senior management takes dling, transport, use, and disposal of our even in its most subtle forms, is in direct place in the form of employee forums, where products. PSIMS incorporates more than conflict with company policy and will not senior managers engage with employees 5000 automated assessments to consis- be tolerated. All employees are subject to on many topics such as business or safety tently appraise product characteristics and disciplinary action up to, and including, performance, public policy, and long-term uses for compliance with existing global termination for any act of harassment. We planning. During these forums, employees laws and regulations, and to provide respon- have deployed a comprehensive education, may ask questions on any topic. In 2010, sible standards to specify precautions training, and stewardship program to ensure Management Committee members and the where laws and regulations do not exist or this policy is understood, implemented, and presidents of the functional companies held are considered inadequate. followed by our employees throughout our worldwide operations. Each affiliate has more than 25 meetings with employees. adopted ExxonMobil’s global standards, In 2010, ExxonMobil and XTO Energy Inc. com- with modifications as required for compliance pleted an all-stock transaction to create a new with country law. organization focused on global development
Building a Culture of Health
In the United States, our ExxonMobil implemented at the Brookhollow office with health coaches. On-site programs medical plan includes a program, Partners complex in Houston, Texas, and the Joliet such as physical activity challenges and in Health, to help employees and their Refinery in Illinois to expand opportunities weight-loss support groups encouraged a families manage long-term health by focus- for employees to identify health risks and culture of health in the workplace. In 2011, ing on disease management, prevention, adopt healthier lifestyles. an expansion of this program is expected and lifestyle habits. In addition to these in the United States. Many employees took advantage of the Partners in Health tools, from 2009 to online health assessment, on-site biometric 2010, a Culture of Health pilot program was screenings, and one-on-one telephone calls 2010 Corporate Citizenship Report 17
Management and Professional New Hires Percent women Percent outside the United States
07 38% 08 39% 09 38% 10 40%
07 71% 08 69% 09 63% 10 70%
2010 Percent Female Management and Professional New Hires by Geographic Region We foster a work environment that treats all employees with respect, values unique perspectives, encourages Worldwide total Asia Pacific Latin America individual growth and achievement, and rewards people based on their performance. Europe United States North America (excluding United States) Africa/Middle East and production of unconventional natural gas In 2010, 40 percent of management and pro- resources. ExxonMobil and XTO personnel fessional new hires were women, significantly 40% worked alongside each other in a transition higher than the percentage of women in our 47% team in Fort Worth, Texas, to prepare the broader employee population. Approximately 45% merged company for operations. ExxonMobil 14 percent of executive employees world- 44% and XTO management have taken all neces- wide are women, compared to 13 percent in 33% sary steps to ensure that our colleagues at 2009. One significant challenge in attaining 32% XTO understand how important they are to gender balance in technology companies 31% the success of the new organization. like ExxonMobil is a long-standing trend of fewer women selecting college majors and Diversity. Our global reach is evident in more careers in science, technology, engineering, than just our physical locations. The diversity 2010 Percent Women and Minorities and mathematics. ExxonMobil is supporting and inclusion of thought, skill, knowledge, by Position in the United States efforts to make access to science, technol- and culture of our global workforce make us Based on U.S. Equal Employment Opportunity ogy, engineering, and mathematics education Commission reporting more competitive, more resilient, and better more widely available, particularly to women Officials and managers Professionals able to navigate the complex and constantly Total employees and minorities in the United States (see pages changing global energy business. Our Global 42 and 43). 19% Workforce Diversity Framework is intended 30% to attract, develop, and retain a premier We are also working to increase the 30% workforce; actively foster a work environment representation of minorities, including Women where individual and cultural differences African-Americans, Hispanics, Asians, and are respected and valued; and identify and Native Americans, in our U.S. operations. 21% develop leadership capabilities of employees For example, our hiring programs include 23% 32% to perform effectively in a variety of environ- outreach to ensure diverse candidates are Minorities ments. Local employee networks exist in identified. Based on U.S. Equal Employment various locations and provide a positive, Opportunity Commission reporting, minorities informal environment for career develop- comprised approximately one-third of our ment information, act as an advisory group to U.S. workforce and 21 percent of officials 2010 Workforce by Geographic Region* management, build cultural awareness, and and managers in 2010. (thousands of employees) support community outreach.
At year-end 2010, about 40 percent of our On the Web: employees were located within the United Safety and health policies United States 33.2 States and 60 percent internationally. In 2010, exxonmobil.com/managementsystems approximately 34 percent of our executives ExxonMobil Malaria Initiative were non-U.S. employees. We hired more exxonmobil.com/health than 2400 management and professional Total Global citizenship stories workforce employees worldwide, of whom approximately Europe 18.4 exxonmobil.com/globalstories 83.6 70 percent were outside the United States. Safety, health, and environment awards ExxonMobil promotes leadership opportuni- exxonmobil.com/awards Asia Pacific 16.0 ties for women globally to improve the gender U.S. employment diversity data balance within our company. Currently, exxonmobil.com/diversity Canada 6.9 women account for about 26 percent of our Latin America 4.7 worldwide workforce, excluding company- Africa/Middle East 4.4 operated retail stores. *Data exclude company-operated retail store employees and include XTO Energy Inc. employees following the June 2010 all-stock transaction with ExxonMobil. 18 exxonmobil.com
case study
Operations Integrity Management System
ExxonMobil’s approach to ensuring integrity in our operations was fundamentally influenced by the 1989 Valdez oil spill. The accident triggered a re-evaluation of our understanding of risk management at a fundamental level. Today, a comprehensive Framework—called the Operations Integrity Management System (OIMS)—underpins every operating decision we make.
A key outcome of the Valdez oil spill was the matter where they are in the organization. realization that safety is more than a priority. From there, it is the responsibility of the It must be a value that shapes our decision businesses to supplement the Framework making at every level of the organization. by establishing and maintaining guidelines Ensuring this vision was incorporated into relevant to their specific activities. Finally, our day-to-day activities required a top- local management systems provide addi- to-bottom review of all operations with the tional guidance, including processes and intention of reorganizing the company to procedures, responsible and accountable make safety—of people, facilities, and the resources, and feedback mechanisms for environment—the center of decision making. continuous improvement. ExxonMobil’s goal of driving accidents and A critical component of the OIMS Framework incidents to zero has not yet been achieved, is assessment and improvement. OIMS but through OIMS we continue to pursue it. requires us to regularly evaluate our opera- tions. Approximately 50 to 70 assessments The OIMS Framework are conducted annually, performed not The OIMS Framework establishes common only by trained safety, security, health, and ExxonMobil employees understand that OIMS is worldwide expectations for addressing part of their job. Employees are trained to identify environmental experts, but by cross- hazards, assess risks, and to speak up about any safety, security, health, environmental, and functional, cross-regional teams. In this issues they observe. social risk in every aspect of our business. way, the knowledge and observations OIMS guides the activities of more than employees gain are taken back to their jobs 83,000 employees and roughly an equal and spread across the organization. degree to which the system is integrated into number of third-party contractors around our day-to-day operations. the world. OIMS does not just provide over- To further drive continuous improvement, sight; it fundamentally drives our operations the Framework is periodically updated to One of the greatest benefits of OIMS is that it from top to bottom. address learnings, often based on internal or enables ExxonMobil—a large organization that external events that need to be institutional- operates across diverse cultures and geogra- Through OIMS, ExxonMobil monitors, ized and embedded into the Framework. phies—to speak the same language when it benchmarks, and measures our perform- comes to safety and risk management. ance. OIMS consists of 11 separate Success factors Elements that address all aspects of OIMS is part of our culture. Its components Many other companies have similar systems management (see graphic). The standard allow our employees to drive our organiza- in place, some of which were influenced by 11 Elements and 65 Expectations included tion’s success. Our goal is not simply to OIMS. The unique aspect of OIMS is the in OIMS are the same for all employees, no follow procedures. A culture of compliance
The Blackbeard Well: Element 2 - Risk Assessment and Management and Element 7 - Management of Change
ExxonMobil’s systematic and disciplined assessment was conducted prior to OIMS Element 7 (Management of Change) approach serves as a critical tool to starting the operation in order to identify requires that once the drilling plan has manage the risks associated with oil and potential hazards—everything from hur- commenced, any change in the plan must gas exploration and development. ricanes to the location of underground be evaluated, approved, and documented. formations. From that risk assessment, Taking into account the potential well In September 2006, drilling efforts were we developed a project plan that included pressure, we assessed risks and evaluated underway on a challenging exploration well specific risk mitigation procedures. mitigation strategies. After management in the Gulf of Mexico called Blackbeard, review, we concluded that the level of where seismic reports suggested the After drilling to a depth of more than risk associated with continued drilling presence of approximately 1 billion 30,000 feet and investing $187 million, outweighed the potential benefits. Drilling barrels of oil and gas. In accordance measurements indicated higher pressures operations were discontinued and the well with OIMS Element 2 (Risk Assessment than previously predicted, increasing the was safely abandoned. and Management), an extensive risk risk of continued drilling. 2010 Corporate Citizenship Report 19
Eleven Elements of OIMS Operations
Driver 2 3 4 Evaluation Risk Assessment Facilities Design Information/ and Management and Construction Documentation 1 11 5 6 7 Personnel Operations Management and Training and Maintenance of Change Management Operations Leadership, Integrity Commitment, and Assessment and Accountability Improvement 8 9 10 Third-party Incident Community Services Investigation Awareness and and Analysis Emergency Preparedness
alone can lead to complacency. We seek to Safely shutting down and restarting operations: create a culture in which employees meet Element 6 - Operations and Maintenance and challenge procedures so they can be improved when needed. ExxonMobil’s manufacturing sites regu- employees to work more than 1.8 million The 11 Elements of OIMS are fundamental larly conduct large-scale maintenance hours on six units. In anticipation of the to safe and responsible operations. But efforts called turnarounds, which can large influx of personnel and work activity the first and last Elements—Management range in scope from a single piece of on-site, a special safety campaign was Leadership, Commitment, and Accountability equipment to an entire facility. During implemented. The turnaround manage- and Operations Integrity Assessment and a turnaround, relevant components are ment team conducted a comprehensive Improvement—are perhaps the most critical. shut down, inspected, upgraded, and risk analysis and developed risk manage- Without leadership by example and without then restarted. Experience shows that ment procedures. They also used peer thoughtful, honest, and objective self- these periods of nonroutine activity can reviews, daily and weekly safety meetings, assessment, no system is sustainable. pose greater potential for safety and and recognition programs to reinforce environmental incidents. OIMS Element 6 and sustain the safety culture. By the Our journey toward achieving zero incidents provides detailed tools and checklists to end of the turnaround, only one record- is far from complete, but we have made sig- reduce the potential for error by providing able incident occurred, involving a minor nificant progress. More importantly, we are a systematic process to ensure hazards finger injury. As part of our commitment dedicated to learning until we do achieve are identified, procedures are clear and to safety, we held a mandatory contrac- our vision of a workplace where Nobody understood, and controls are in place. tor safety stand-down to discuss and Gets Hurt, where Security is Everybody’s review incident prevention tools. Lessons In 2010, the Baytown Refinery in Texas Business, and where our environmental learned from this turnaround were also conducted its largest-ever turnaround. performance can Protect Tomorrow. Today. shared with other sites in an effort to drive The event required approximately incidents to zero. On the Web: 3500 contractors and more than 450 OIMS Framework exxonmobilsafety.com 20 exxonmobil.com
Corporate Governance
HIGHLIGHTS + % 33 81 10out of10 thousand employees of outstanding rating from received anti- shares represented GovernanceMetrics corruption training at the Corporation’s International, among Annual Meeting top 1 percent of companies rated
Performance Overview
What we said in 2009 What we did in 2010 What we plan to do continue recruiting highly qualified our shareholders elected two new include management proposals non-employee director candidates non-employee directors after one on shareholder advisory votes on continue outreach to institutional non-employee director retired executive compensation in the 2011 and socially responsible or sustainable enhanced engagement with socially proxy statement investors and other interested parties responsible or sustainable investors and continue recruiting highly qualified participate in Sustainable Investment other interested parties through approxi- non-employee director candidates Research Analyst Network (SIRAN) calls mately 35 conference calls and meetings continue outreach to institutional on greenhouse gas emissions reduction participated in SIRAN calls on deep- and socially responsible or sustainable technologies and other environmental, water drilling and algae technology investors and other interested parties safety, and governance issues expanded reporting in the proxy state- review and update corporate policies ment on risk oversight by the Board, the and procedures based on requirements Board’s structure, and considerations for from the U.S. Securities and Exchange selecting Board candidates Commission or congressional legislation conducted anti-corruption training worldwide for personnel who may interact with government agencies and officials 2010 Corporate Citizenship Report 21
Good corporate governance creates a climate conducive to long-term investments and underpins the foundation of sustainable economic growth. In an industry where business and investment decisions can have impacts for decades, the benefits of implementing strong corporate governance practices are also enduring.
The methods we employ to achieve results Board committees. Corporate citizenship results in the areas of safety, security, health, are as important as the results themselves. topics fall under the purview of the Public and environmental performance. For example, We observe the highest standards of integrity Issues and Contributions, Board Affairs, ExxonMobil’s success in managing risk in and ethics to develop, approve, and imple- and Compensation Committees and are these areas is achieved through emphasis on ment projects designed to be responsive routinely reviewed at Board and Board flawless execution of our OIMS Framework to society’s present and future energy and committee meetings. (see page 18), and executives understand that petrochemical needs. their compensation will reflect how effectively Risk oversight is the responsibility of the full they implement this Framework. The design Board. The committees help the Board carry of the executive compensation program, Board of Directors out this responsibility by focusing on specific including the long vesting requirements and Our Board of Directors provides indepen- aspects of risk that are relevant to their com- risk of forfeiture of stock awards, ensures dent oversight of the management of the mittee. Each committee’s charter is available that senior executives have a strong financial Corporation. All directors stand for election on our Web site. at our Annual Meeting of Shareholders. At incentive to protect the safety and security of year-end 2010, 10 of 11 directors and all Diversity. Maintaining a Board of Directors our employees, the communities and environ- members of key Board committees, including that is diverse in gender, race, experience, ment in which we operate, and the value of the presiding director, were independent as geography, life experiences, and fields of the company for shareholders. expertise is a top priority for ExxonMobil. defined by New York Stock Exchange (NYSE) Communicating with directors. ExxonMobil’s In 2010, the Board included female, African- guidelines. In 2010, the Board of Directors directors encourage open and transpar- American, and international perspectives. met nine times and our Audit, Board Affairs, ent communication. Key topics include The Board Affairs Committee serves as Compensation, and Public Issues and executive compensation, environmental or the nominating committee and follows the Contributions Committees each met between other public issues, dividends, common Guidelines for the Selection of Non-Employee 5 and 11 times. The Board annually con- stock price, gasoline prices, and corporate Directors that describe qualification criteria of ducts group performance and effectiveness governance. The Corporate Governance directors. This committee considers recom- evaluations. Individual director performance page of our Web site allows individuals to mendations from shareholders, directors, and reviews are not a part of this process. For send e-mails to our non-employee directors. others on director candidates and engages more information about the Board, see our Written letters can also be sent in care of an executive search firm to help identify new proxy statement. the Secretary of the Corporation. director candidates. Board structure. At this time, the Board believes the interests of all shareholders are Executive compensation. At ExxonMobil, Shareholder proposals and best served through a leadership model with the most senior executives—including the proxy statements CEO, named executive officers, and about a combined chairman of the Board and chief Every year, shareholders submit propos- 1200 other U.S. executives—participate executive officer (CEO). With more than 35 years als regarding the company’s operations or in a common compensation program. of service, the current CEO possesses in-depth corporate governance. Management and the Compensation decisions for executives take knowledge of the Corporation, putting him in Board consider these proposals and typically the best position to provide broad leadership into account several key criteria, including for the Board. The Board retains the author- ity to separate the positions of chairman and 2010 Proxy vote summary CEO if deemed appropriate in the future. 1 The independent members of the Board Percent vote in favor Proxy item 2010 2009 2008 annually select an independent director 2 to serve as presiding director, to act as a Election of directors (average) 95.3 97.5 96.8 liaison with the chairman, and to chair Board Ratification of independent auditors2 98.9 98.5 98.0 meetings in his absence. Although this posi- Special shareholder meetings 36.8 40.8 -- tion is subject to annual elections, there is Incorporate in North Dakota 3.0 4.8 -- an expectation that the same director will Advisory vote on executive compensation 41.2 41.4 40.7 serve for at least two years. The presiding Amendment of Equal Employment Opportunity Policy 22.2 39.3 39.6 director chairs executive sessions of the non-employee directors and provides feed- Policy on water 6.7 -- -- back to the chairman. All directors have the Wetlands restoration policy 9.1 -- -- authority to call executive sessions, which Report on Canadian oil sands 26.4 -- -- are regularly scheduled without manage- Report on natural gas production 26.3 -- -- ment present, unless requested by the Report on energy technology 6.7 -- 9.4 presiding director. Greenhouse gas emissions goals 27.2 29.0 30.9 Planning assumptions 7.8 -- --
1Abstentions count for quorum purposes, but not toward voting on these proposals. 2Proposals submitted by the Board. 22 exxonmobil.com
our Standards. The Board of Directors has adopted and oversees the administration of the Standards—the foundation policies of the Corporation. The Standards articulate expectations and define the basis for the worldwide conduct of the Corporation and its majority-owned subsidiaries. Employees are expected to review the Standards each year. Disciplinary action is taken against any employee who violates these Standards. There are absolutely no excep- tions to this approach.
Internal audits. Regular internal audits and self-assessments help ensure the rigorous implementation of our control systems and Our Board of Directors provides independent oversight of the Corporation. Standards. ExxonMobil’s internal audit team annually audits about one-third of seek a dialogue with the proposal sponsor. and business integrity. They must comply with ExxonMobil’s operations, conducting detailed If the dialogue successfully addresses the all applicable laws and accurately record and assessments of facilities, business units, concerns of the sponsor, the proposal is track all transactions. Employees are subject personnel, and records, and thoroughly inves- often withdrawn. Otherwise and unless to disciplinary action up to, and including, tigating noncompliance with the Standards. excluded under U.S. Securities and Exchange termination for violations of our policies. Bribery and corruption. We maintain our Commission rules, the proposal and the Employees receive training on our ethics strong commitment to anti-corruption prac- Board’s response and recommendation are policy every four years through Business tices in all of our operations worldwide. The published in our proxy statement for review Practices Reviews, including a detailed Anti-Corruption Legal Compliance Summary at the Annual Meeting of Shareholders. review of our Standards of Business Conduct; details our commitment to compliance with implementation guidelines and procedures; In 2010, about 3.8 billion—or nearly 81 percent the U.S. Foreign Corrupt Practices Act (FCPA) and a review of antitrust, competition, and —of the outstanding shares were rep- and global anti-corruption conventions in all anti-corruption laws. These general training resented at the Corporation’s Annual business relationships, including those with sessions, in addition to more comprehensive Meeting. In 2010, actions taken related to consultants, agents, and intermediaries. To training given to relevant functions, are a issues reflected in shareholder propos- ensure compliance, ExxonMobil employees requirement of employment at ExxonMobil. als included the development of a land and contractors are prohibited from making This training is supplemented by annual conservation strategy and the doubling of improper payments to, or engaging in improper redistribution of the policy to ensure ongoing certified wildlife habitat programs; drafting transactions with, government officials to employee awareness. The next general review a public communication on oil sands; and influence the performance of their official session is scheduled for 2012. refinement of a document highlighting best duties. As required under the FCPA, we practices and chemical disclosures relating Standards of Business Conduct. Our com- maintain appropriate internal controls and to natural gas production. mitment to ethics creates a competitive keep accurate and complete records of the advantage for the Corporation and helps transactions in which we engage. Ethics ensure shareholder value. Our culture In a few parts of the world, we conduct ExxonMobil transacts business activities in of ethical standards and compliance is oil and gas exploration and production in nearly every country of the world, necessitat- documented in our Standards of Business remote areas where there may only be a ing regular training on international trade laws, Conduct, which foster the values of human limited number of local businesses and including the anti-corruption and antitrust rights, labor standards, the environment, a small technically skilled population. laws of the United States and other countries and anti-corruption as outlined in the United Government structures and local business where we do business. All employees are Nations Global Compact. While ExxonMobil practices are sometimes closely linked expected to uphold high ethical standards is not a formal signatory of the Global through social and family relationships. In Compact, its values are key elements of these challenging situations, ExxonMobil steadfastly upholds our commitment to full
Supplier standards
Suppliers and contractors are expected to Conduct. A contractor who violates our diligence; restricted parties screening; adhere to all local laws and regulations, as Standards will be in breach of contract and and standard legal terms and conditions, well as ExxonMobil policies, procedures, may be subject to contractual and legal including human rights, labor practices, and prequalification requirements. This remedies, including, in some cases, denial financial and operational qualifications, includes compliance with our requirements of access to our facilities and termination export restrictions, and security concerns, regarding safety, security, health, environ- of the contract. Our procurement staff is including the Customs-Trade Partnership ment, and human rights, as well as the trained to conduct prequalification assess- Against Terrorism. principles of our Standards of Business ments, which include anti-corruption due 2010 Corporate Citizenship Report 23 compliance with the FCPA and local laws, Management systems Corporation contributed a total of $396,000 even if it requires extensive analysis of busi- to legislative and gubernatorial candidates and Across all areas of the Corporation, ness relationships to ensure transparency. caucuses in 15 U.S. states. Information about ExxonMobil complies with applicable laws Our standard language for all contracts our political activities, policy, guidelines, and and regulations, and where laws and regula- includes a requirement to comply with an itemized list of these corporate political tions do not exist, we maintain the use of our all laws and to keep accurate books and contributions are available on our Web site. internal standards. Our management systems records, and where appropriate, contains help identify, track, and report the metrics In the 2009 to 2010 election cycle, ExxonMobil’s specific anti-bribery commitments. For all that demonstrate and guide our performance employee- and retiree-funded political action new agreements and renewals, our procure- over time. They also provide the structure that committee (PAC) disbursed $1.2 million, ment staff assesses baseline information enables our operations to adapt to new or mostly to federal candidates. Based on the obtained in procurement processes to altered regulations. 2009 to 2010 election cycle contributions, recognize warning signs, and when neces- CQ Moneyline listed the ExxonMobil PAC sary, consults the law department. In addition, Operations Integrity Management System. No. 114 in size compared to other PACs and procurement staff must comply with a Our Operations Integrity Management System candidate and/or party committees. Among mandatory screening process to ensure that (OIMS) addresses all aspects of managing corporate PACs, the ExxonMobil PAC proper anti-corruption due diligence is being safety, security, health, environmental, and ranked No. 41 in size in terms of receipts performed on intermediaries in countries social risks at our operations worldwide (see from employees and retiree shareholders, that are assessed to be high-risk for cor- page 18). and No. 46 in size of total contributions to ruption. This process involves identifying OIMS conforms with recognized safety, candidates. All rankings are compiled from high-risk parties, gathering additional infor- security, health, environmental, and chemical publicly available data filed with the Federal mation on those parties, and consulting with industry standards (for example, Responsible Election Commission. the law department. Care®), and requires us to assess the effec- Political lobbying and advocacy. ExxonMobil Training. Political and regulatory landscapes tiveness of the system on a regular basis. In tracks proposed legislation and engages with across the globe are constantly changing 2010, Lloyd’s Register Quality Assurance, governments around the world to advocate and require diligent anti-corruption training Inc., reviewed our ongoing performance and our position on policies that impact our programs. In 2010, more than 33,000 employ- attested that OIMS is fully consistent with operations. Lobbying and advocacy activi- ees whose positions may require interaction the standard on environmental management ties are necessary to ensure the company’s with government agencies or officials systems of the International Organization for long-term success and protect shareholder received anti-corruption training. This training Standardization (ISO 14001:2004) and the value. ExxonMobil actively lobbies the U.S. covered the basics of the FCPA, global anti- Occupational Health and Safety Assessment Congress and state legislatures on a number corruption standards, recent developments Series for health and safety management of public policy topics, including access to in enforcement, and compliance with internal systems (OHSAS 18001:2007). resources, taxes, energy policy, trade, and anti-corruption guidelines and processes. Control systems. The ExxonMobil System climate policy. Additionally, we monitor events and political of Management Control Basic Standards changes and alert employees as appropri- We fully comply with regulations by report- defines the basic principles and concepts ate. Every four years, all employees attend ing federal lobbying expenses in quarterly that drive our business controls across mandatory Business Practices Reviews that disclosure reports to Congress. A complete operations worldwide. Our Controls Integrity address anti-corruption issues (see Ethics, list of federal issues lobbied by ExxonMobil in Management System provides a structured on page 22). the United States in 2010 can be found in the approach to assessing and measuring finan- public disclosure section of the U.S. Senate Reporting and investigating suspected cial control risks, developing procedures for Web site. In 2010, ExxonMobil reported lob- violations. All employees are responsible for mitigating concerns, monitoring compliance bying expenses totaling $12.4 million in our reporting any and all suspected violations of with standards, and reporting results to the public Lobby Disclosures Act filings. company policies. The Corporation provides appropriate operations and management several confidential mechanisms for report- groups within ExxonMobil. These company- ing, including a 24-hour hotline phone number wide financial controls meet or exceed the On the Web: and mailing address. It is a violation of the requirements of the Sarbanes-Oxley Act and Management systems and policies Corporation’s procedures for an employee to NYSE listing standards. exxonmobil.com/managementsystems be penalized or threatened in any way after PricewaterhouseCoopers LLP conducted an Corporate governance filing a report. A Hotline Steering Committee, independent assessment that determined exxonmobil.com/governance comprising security, audit, law, and human our internal controls system is effective for Proxy statements resources personnel, handles suspected financial reporting. Regular self-assessments exxonmobil.com/proxymaterials violations and provides a report to the Audit and audits help ensure our controls and Committee on a quarterly basis. All reports ExxonMobil financials standards are consistently implemented by of suspected violations of law, business exxonmobil.com/investor every operating unit. practices, or internal control procedures Political action committee disbursements fec.gov are thoroughly investigated, and major Political involvement issues or violations are reported to the Audit Political contributions ExxonMobil makes political contributions Committee. Appropriate disciplinary action is exxonmobil.com/political taken for all violations, and no exceptions are to candidate committees, political parties, Federal issues lobbied made based on level of employment. associations, and other political organizations,
as permitted by applicable laws in the United (search “Exxon Mobil” as registrant) States and Canada, and as authorized by http://soprweb.senate.gov/index. the Board of Directors. In 2010, Exxon Mobil cfm?event=selectfields 24 exxonmobil.com
Environmental Performance
HIGHLIGHTS 0 6% 2600+ spills from owned reduction in hectares of and long-term leased combined NOx, VOCs, protected wildlife marine vessels and SO2 emissions habitat added
Performance Overview
What we said in 2009 What we did in 2010 What we plan to do re-emphasize spill prevention mea- Led an industry effort to engineer and evaluate and implement lessons learned sures to restore our improvement trend construct a well containment system in from the Deepwater Horizon incident introduce the Corporate Environmental response to the Deepwater Horizon incident focus on infrastructure upgrades and Data Management System, a computer- focused spill prevention efforts on special programs at the sites with the based system to improve data integrity human factors and the sites with the highest spill rates and analysis capability highest spill rates in recent years study practices to minimize waste gen- expand application of Project began upgrading site systems to eration and increase re-use and recycling Environmental Standards across the improve environmental data management in our Lubricants and Specialties business Corporation adopted the Expectations for Project work to certify remediated sites as expand the number of facilities par- Environmental Standards protected wildlife habitat and conserva- ticipating in wildlife habitat enhancement achieved our 70-percent air emissions tion areas and conservation programs reduction goal from U.S. refining facilities from 2000 baseline levels two years early developed a database to better under- stand water resources and biodiversity sensitivity worldwide 2010 Corporate Citizenship Report 25
As one of the leading petroleum and natural gas companies, ExxonMobil takes our environmental responsibilities very seriously. The Deepwater Horizon incident was a tragic event that reminded our entire industry of the need to be ever-vigilant in the areas of safety and environmental protection. To produce energy responsibly, we must understand and actively manage environmental risks and relentlessly focus on operational excellence.
Managing to reduce and Health Impact Assessments (ESHIAs) well as ecological system descriptions in the environmental impacts are conducted to review community concerns, United States. The enhancements will allow sensitive environmental habitats, land use, air users, including ExxonMobil, to better identify Our Operations Integrity Management quality, water management, waste manage- and evaluate the potential conservation value System (OIMS, see page 18) provides a ment, biodiversity, noise, public health, and of land across the United States. systematic and disciplined approach to man- future regulatory developments. The ESHIA In Qatar’s Ras Laffan liquefied natural gas aging safety, security, health, environmental, process requires engagement with key stake- operation, water treated with trace amounts and social risks. OIMS is consistent with the holders throughout the project’s life cycle. The of chlorine must be used in the process of standard for environmental management results, which include opportunities for avoiding, cooling gas to liquid. ExxonMobil Research systems established by the International reducing, and mitigating potentially negative Qatar conducted an environmental research Organization for Standardization (ISO impacts as well as enhancing project benefits, project studying coastal water quality near 14001:2004). Together, our Corporate are integrated into project evaluation, planning, Ras Laffan Industrial City. The two-year Environment Policy and OIMS Framework and decision making. Early identification of research project concluded that the very low set an expectation that all projects will be potential impacts allows us to develop project concentrations of chlorination by-products developed, constructed, maintained, and alternatives, reduce impacts to the environment, associated with Ras Laffan cooling water operated using appropriate standards— improve safety, and decrease operating costs. including where regulations are not discharges do not pose a risk to marine life. A report of the study was shared with the adequately protective of the environment. Protecting biodiversity. We recognize that Qatari Ministry of the Environment as part of protecting biodiversity—the variety and Our Protect Tomorrow. Today. initiative our ongoing engagement in the Gulf Region. outlines our expectations for each business complexity of life—is an important conserva- to deliver superior environmental perfor- tion issue that presents broad challenges. ExxonMobil’s 14 sites with Wildlife Habitat mance, drive environmental incidents with real We successfully operate in sensitive areas by Council (WHC) certification increased the impact to zero, and achieve industry-leading implementing scientifically sound, practical, and number of hectares actively managed for performance in focus areas of importance to sustainable solutions rooted in environmental wildlife from 140 in 2009 to more than 2600 in each business. Progress toward these goals is aspects assessment and risk management. 2010. We have also identified additional sites managed through our Environmental Business These processes recognize a variety of factors for future WHC certification. such as rarity, vulnerability, and cultural value Planning (EBP) process, which integrates In 2010, ExxonMobil contributed more than of biodiversity and ecosystems. These factors environmental improvement into overall busi- $3 million to organizations dedicated to bio- determine the levels of risk associated with our ness plans and strategies. The businesses diversity and land conservation. For example, operations and appropriate actions to manage use EBP to identify key environmental drivers, in a unique partnership with the scientific those risks. To protect particular species and set targets in high-priority focus areas, and community, the Angolan government, and the sensitive habitats, we take steps such as identify actions to achieve these targets. private sector, ExxonMobil and the Block 15 modifying engineering design, construction, consortium contributed more than $1 million and operating practices, and enhancing wildlife between 2008 and 2010 to support efforts to 1. 2. habitats at our properties. We also support protect the critically endangered Angolan Giant Assess Design advocacy, research, and partnerships to Black Sable antelope. The funding enabled protect biodiversity outside our fence line. the conservation program to relocate nine 4. 3. In 2010, we screened our sites against females and one male to a 400-hectare sanctu- Restore Operate databases of the International Union for ary within the Cangandala National Park. The Conservation of Nature (IUCN) and World sanctuary increases breeding opportunities Protected Areas (WPA). We are currently uti- and in 2010 led to the birth of two offspring. lizing this information to identify opportunities A life cycle approach to for enhancing measures to protect biodiver- 2 Designing our facilities environmental protection sity at major facilities or project sites in the and operations immediate vicinity of these areas. Life cycle thinking contributes to managing ExxonMobil integrates environmental con- the full range of potential environmental and Gathering and analyzing sound environ- cerns and regulatory requirements early in social impacts associated with our operations mental data is an important aspect of our the project design process, as part of the and products. We take a holistic approach to assessment process. We continue to work ExxonMobil Capital Projects Management understanding our impacts from initial explo- with the United Nations World Conservation System (EMCAPS). Potential risks are ana- ration activities to eventual closure. Monitoring Centre (WCMC) to develop a lyzed for avoidance and reduction options, comprehensive database for worldwide and practical alternatives are included from 1 Assessing our surroundings environmental conservation. In 2010, we also the start. We comply with all applicable host- Delivering superior environmental perfor- partnered with NatureServe and National country regulatory requirements and, where mance starts with planning. For new projects, Geographic to improve a mapping tool that there are none, we perform to standards that risk-based Environmental, Socioeconomic, lists threatened and endangered species as are protective of the environment. 26 exxonmobil.com
In 2010, we implemented Expectations for • Energy efficiency and greenhouse Project Environmental Standards to establish gases (GHGs); a consistent approach across the Corporation. • Marine geophysical operations; and, Each business is expected to develop, • Socioeconomic impacts. maintain, and consistently apply Project Environmental Standards applicable to the Through the Expectations for Project specific risks of that business. The businesses Environmental Standards initiative, these are now developing applicable Standards, and Standards are being implemented across all this effort will be completed by year-end 2013. upstream companies. To date, the Standards for drill cuttings discharge, flare and vent For example, the ExxonMobil Development reduction, and energy efficiency and GHGs Company’s Environmental Standards set have been adopted by all upstream companies. the basis for responsible environmental development of upstream projects, includ- ing in regions of the world that do not have 3 Operating with integrity comprehensive environmental protection OIMS outlines our approach to communicat- A unique public-private partnership in Angola led requirements. These project Environmental ing expectations, measuring progress, and to the birth of a rare Angolan Giant Black Sable Standards include: striving to improve environmental perfor- antelope calf in 2010. mance. Our Environment Policy encourages • Air emissions (sulfur dioxide (SO2), volatile organic compounds (VOCs), and concern and respect for the environment and particulate matter); emphasizes every employee’s responsibility for environmental performance. Employees • Nitrogen oxides (NOx) emissions; are expected to actively prevent environ- • Drill cuttings discharge, water manage- mental incidents, and to respond quickly and ment, waste management, and land use; effectively when incidents occur. • Flare and venting;
Assessing our surroundings in Papua New Guinea
The Papua New Guinea (PNG) liquefied Statement (EIS) was submitted to and and water quality. The resulting constraint natural gas (LNG) project is an integrated approved by the government as part of the maps, including mitigation options and development that includes gas production project permitting process. recommendations to reduce impacts to and processing facilities in the Southern communities and the environment, support The EIS describes the biophysical and Highlands and Western Provinces of decision making across all project locations. social environment and builds on work Papua New Guinea, connected by more completed over the past 20 years by the Sensitivities identified are managed through than 700 kilometers of pipelines. petroleum industry. Altogether, there have mitigation measures originally detailed in the Papua New Guinea is one of the least been 5700 social surveys involving more EIS and further refined in the Environmental explored countries on earth, largely due than 24,000 interviews with local people, and Social Management Plans and pre- to its rugged, mountainous terrain and representing more than 40 percent of all construction surveys. dense vegetation. It is also a nation of households in the project area. In addition, To date, pre-construction surveys and reports rich biodiversity and distinctive cultures biodiversity studies were undertaken for have been finalized for 95 sites, and third-party of people who are closely linked to the 78 sites, which produced nearly 4000 records experts have identified more than 1400 mitiga- natural environment. for fauna species alone and identified more tion measures aimed at, for example: than a thousand species of plants. Overall, This environment, as well as the complexity, some 80 species of vertebrate fauna and • Avoiding particularly sensitive ecological scale, and scope of the project, make it higher plants that were new to science have features; one of the most challenging projects ever been identified. • Minimizing vegetation clearance and undertaken in our industry. overall project footprint; The EIS was an initial step in the development Our goal is to develop and operate the PNG of our environmental and social management • Preventing the introduction and spread of LNG project in a way that protects Papua processes. The project’s Environment Permit weeds and animal pests; New Guinea’s natural and social environ- requires more detailed analyses to identify • Controlling erosion and sedimentation ments while helping to bring economic site-specific sensitivities and mitigation and resulting impacts on water quality; benefits to its citizens. This will require practices prior to facility and infrastructure proven technology and experts, use of • Promptly reinstating and stabilizing banks construction, including the pipeline route ExxonMobil management systems such following construction of river crossings; and associated project footprint. as OIMS, and extensive engagement and • Controlling access to new project roads; involvement of local communities. Pre-construction surveys identify poten- • Using timber from approved sources only; tial impacts of construction activities In such a unique location, impact assess- on community infrastructure as well as • Handling, treating, and disposing of project ments are a critical part of project design, environmental and social sensitivities. They solid wastes and wastewaters properly; and, construction, and operation. In 2009, the address concerns related to archaeology, • Minimizing noise from construction and PNG LNG Project Environmental Impact cultural heritage, ecology, invasive species, operations. 2010 Corporate Citizenship Report 27
The ability to efficiently collect and manage Unfortunately, one single-voyage chartered environmental information is essential for vessel experienced a spill in 2010 in Texas. achieving compliance and improving per- ExxonMobil actively monitored the ship owner’s formance. In 2010, we implemented the first spill response and subsequent investigations. of a two-phase project to systematize and Other spill performance. In 2010, the total improve our environmental data information volume of hydrocarbons spilled to land collection system. Phase one, referred to or water was about 8 thousand barrels, as C-EDMS, was successfully implemented 60 percent of which was recovered at the site across the Corporation in 2010. Phase two, of the spill. The number of nonmarine hydro- S-EDMS, will be rolled out to sites and inte- carbon spills greater than 1 barrel in 2010 was grated with existing emissions monitoring and 25 percent lower than in 2006 and 11 percent measurement systems from 2011 to 2017. lower than 2009. In 2009, we did not meet Spill prevention. Spill prevention is of utmost our expectation of continued improvement importance to protect human health and the of our spill performance. In 2010, we environment. ExxonMobil’s operations integ- increased emphasis on spill prevention and rity requirements seek to prevent spills by re-established our improvement trend. The interim marine well containment system strengthening procedures, building in layers significantly exceeds previous U.S. Gulf of Mexico After thorough analysis, we focused our effort of protection, inspecting and maintaining containment capabilities, including the speed on human behaviors that contribute to spills of deployment. equipment, training operators, and conducting globally. Implementation of the Global Human tests and drills. Factors Best Practice Guide is intended to Marine Vessel Spills Marine vessel spill performance. For more instill a zero-spill mindset throughout the (Owned and Long-Term Leased) Number of hydrocarbon spills less than 1 barrel than four years, vessels owned and operated organization. The Guide outlines 17 high-risk * This spill was from a long-term leased vessel. by our marine affiliates have safely trans- elements and corresponding procedures to ported all cargoes without any spills to water reduce the likelihood of a human factor oil 07 3 greater than 1 barrel. In addition, it has been spill. In addition, we focused on achieving 08 more than three years since the last spill from improvements at the refining sites with the 09* 1 a barge, and there were no spills from long- highest spill rates over the last several years. term chartered ships in 2010. A comprehensive improvement strategy was 10 developed, which included root-cause analy- We attribute this performance in part to the sis, targeted equipment upgrades, enhanced rigorous and systematic screening process risk mitigation through selective inspections, Other Spills (Not from Marine Vessels) used by our marine affiliates to examine Number of oil, chemical, and drilling fluid spills and improved recordkeeping. In the Upstream, hundreds of technical, operational, and other greater than 1 barrel we implemented oil spill prevention initiatives by noncommercial factors. The people and Spills to water Spills to soil establishing teams to address issues common processes involved in our marine activities are to multiple areas and to standardize prevention 07 253 dedicated to continuous efforts to improve practices by enhancing personnel training and safety and environmental performance. 08 211 by improving surveillance techniques for early identification of spill risks. 09 242 10 210
Marine well containment system
Today, deepwater production accounts for This system builds on more than 40 years of ExxonMobil is also participating in joint more than 5 percent of worldwide liquids internal oil spill response research. In recent industry task forces to: supply, up from only 1 percent a decade ago. years, we have spent between $2 million • Enhance drilling reliability; Ensuring this valuable resource is available to and $3 million per year on oil spill cleanup • Improve safety, health, and environmental consumers means that the oil and gas indus- research, and we are conducting significant performance; try must work more diligently to prevent tragic additional research in drilling and deepwater incidents such as the 2010 Deepwater Horizon developments totaling more than $40 million • Recommend improvements to equipment spill in the Gulf of Mexico. While ExxonMobil per year. We are working with operators design, testing protocols, research and believes such incidents are preventable, we and national oil companies operating in development, and regulations; and, recognize the energy industry should have other regions besides the Gulf of Mexico • Protect public interests. been better prepared to respond. That is why regarding the applicability of such systems. Following our engagement with the National ExxonMobil is leading a multicompany effort We support industry task forces under the Commission on the BP Deepwater Horizon to build a new rapid-response marine well International Association of Oil and Gas Oil Spill and Offshore Drilling, we will containment system for the Gulf of Mexico. Producers and the International Petroleum continue to seek lessons learned from the The system, involving a $1 billion initial com- Industry Environmental Conservation incident and integrate them into our own mitment from the four sponsor companies, Association in assessing global needs and plans and operations. will provide pre-engineered, constructed, and solutions for well containment, as well as tested containment technology and equipment other innovative solutions for spill response to be deployed within 24 hours of a deepwater and cleanup. spill in the Gulf at depths up to 10,000 feet. 28 exxonmobil.com
Air emissions reductions. The use of fossil action. In 2010, we used the World Business Air Emissions fuels releases VOCs, SO2, NOx, and par- Council for Sustainable Development’s water (millions of metric tons) ticulates, which can contribute to air quality tool to identify regions where we operate VOCs SO2 NOx issues since high concentrations of these that may have water scarcity concerns. 07 0.31 compounds can impact human health and the Information on water stress and scarcity in 08 0.25 environment. ExxonMobil is co-sponsoring an the vicinity of our operations serves as an 09 0.22 interdisciplinary five-year research program, important element of environmental aspects 10 0.22 coordinated by the Health Effects Institute, assessment and risk management. Managing 07 0.21 focused on determining which particle constit- risks may include identifying and using 08 0.19 uents impact health. Research findings will be alternate water supplies, reducing water use 09 0.16 used to develop more cost-effective emission and increasing efficiency through technology, 10 0.14 control strategies targeting particles with the and considering external projects to address highest public health concern. The final results sustainability of supplies for all users of a 07 0.16 08 0.15 of the research should be available in 2013. particular water resource. 09 0.13 In 2010, our combined air emissions of In 2010, the net consumption of fresh water 10 0.12 VOCs, SO2, and NOx decreased by 6 percent at our operations was 2140 million barrels, from 2009 and 36 percent from 2006 levels. representing a 1-percent reduction from By year-end 2010, our U.S. refining facilities 2009. Sites across our operations in scarce reduced combined NOx and SO2 emissions or stressed areas implemented a variety by over 70 percent from 2000 levels. With of projects to reduce water consumption these reductions, we achieved our 2012 in 2010. For example, the Altona Refinery commitment two years early. Since 2006, in Australia improved the control system in our global Chemical operations have been its cooling towers, resulting in a 3-percent averaging a reduction per unit of production reduction in freshwater consumption. of 6 percent per year for VOCs and 3 percent Waste management. ExxonMobil’s approach per year for NOx. Greenhouse gas emissions to waste management begins with reducing are discussed in the Managing Climate Change waste at its source, followed by re-using Risks section of this report (see page 32). and recycling waste, and finally disposing Freshwater management. A reliable supply of any remaining waste in compliance with of water is essential for life and for develop- local regulations. ing both fossil fuel and renewable sources of The amount of hazardous waste disposed energy. With competing demands for water, in 2010 from our ongoing operations totaled regulations and international standards are 1.3 million metric tons. The majority of this growing more stringent. Protecting and volume, 1.2 million metric tons, was produced preserving freshwater resources involves water, which is typically not considered understanding supply and demand trends at hazardous, but which has been classified the local level, assessing potential effects on as hazardous waste by one local authority. quality and quantity, and implementing steps Excluding this, we re-used or recycled about to appropriately address challenges. 43 percent of the hazardous waste generated The prudent utilization of water resources, by our operations. particularly freshwater resources, is a global issue that requires local understanding and
Dispersants enhance natural degradation of oil
All marine environments contain naturally are less toxic than oil, and dispersed oil The dispersants developed by ExxonMobil occurring microbes that feed on and break breaks down faster than undispersed oil. contain ingredients that are used safely in down crude oil. This means crude oil is When used appropriately, modern disper- a variety of consumer products, such as largely biodegradable. Spilled oil tends sants have low environmental and human skin creams, cosmetics, and mouthwash. to float on the surface of water in slicks. health risk. For example, an Environment ExxonMobil continues to advance disper- Treating a spill with dispersants allows very Canada study found a common dish soap sant technology and has developed a new small droplets of oil to form, which then to be 25 times more toxic to rainbow trout dispersant gel that could further reduce become distributed and diluted below the than a common dispersant. In its 2005 concerns about adding chemicals to the water’s surface. This enhances the access report on modern dispersants and associ- environment. This new gel can treat the of microbes to the oil, thus increasing the ated effects, the National Research Council same amount of oil with two-thirds less rate of degradation. stated that the toxicity of dispersed oil chemical volume than other dispersants. If results primarily from the oil itself, and not final product stability tests are successful, While the benefits of using dispersants from the dispersants. ExxonMobil expects commercialization of have been questioned by stakeholders this new dispersant in 2011. concerned about their chemical composi- tion, studies have shown that dispersants 2010 Corporate Citizenship Report 29
In 2010, the Baton Rouge Chemical Plant in Louisiana reduced the amount of metal waste it disposed by more than 140 metric tons by identifying a recycling facility that could process nickel, molybdenum, and cobalt waste.
Hazardous waste generated during site remediation activities varies from year to year due to the nature and timing of remediation and reclamation projects. In 2010, our reme- diation activities generated approximately 0.6 million metric tons of hazardous waste.
Environmental expenditures. Our worldwide environmental expenditures in 2010 totaled about $4.5 billion. This included about $1.9 billion in capital expenditures and In Sakhalin, Russia, leading-edge technology was applied to drill extended-reach wells from the shoreline about $2.6 billion in operating expenses. to the Chayvo field. This allowed for horizontal drilling under the sea floor and eliminated the need for a In 2010, 83 fines and settlements paid second offshore platform while minimizing and in some cases eliminating environmental risks. accounted for less than one-fourth of 1 percent of total environmental expendi- More than 6.5 million work hours were Last year, we reported on remediation activi- tures or about $11 million. devoted to remediation and restoration ties at two former fuels storage terminal sites activities, which included the disposition of located on Long Island, New York, whose 4 Restoring the environment more than 100 sites for beneficial re-use. operations date back to the early 1900s. Remediation and restoration activities reduce In 2010, ExxonMobil began developing plans Phytoremediation technology. One method our overall environmental impact. We have to restore the coastal habitat within the to effectively manage contamination is phy- improved ExxonMobil’s remediation results boundaries of these properties. In partnership toremediation, which employs vegetation for through a globally consistent approach. with the LTA, EMES is identifying local land the in situ treatment of contaminants in soil trust candidates for potential stewardship of Site remediation. Created in 2007, the and groundwater. Although phytoremediation conservation easements on these two proper- ExxonMobil Environmental Services (EMES) is considered an emerging technology, many ties. This approach would help to ensure the functional organization has established a in the regulatory community have recognized it properties remain designated as conserva- systematic framework for remediating soil and as an effective, economical, and environmen- tion land in perpetuity, thus protecting these groundwater at ExxonMobil affiliate facili- tally sustainable method of site remediation. natural resources from future development ties, inactive properties, and formerly owned ExxonMobil is making progress in applying the and providing community benefits including sites around the world. Our ultimate goal is appropriate use of this technology at several environmental education opportunities. to enhance asset and community value while sites. For example, on a 30-hectare portion of creating opportunities for beneficial re-use a site in East Providence, Rhode Island, we of inactive properties. One of the challenges planted more than 13,000 trees, shrubs, and On the Web: posed by this work is determining how to native grasses in order to reduce contaminant Marine well containment characterize and measure progress of these leaching and to control erosion. exxonmobil.com/MWCC projects. To this end, EMES has identified Safety, health, and environment awards Land conservation. Through our work metrics to define and benchmark our progress. exxonmobil.com/awards with conservation organizations such as the In 2010, EMES stewarded approximately Land Trust Alliance (LTA) and The Nature 9000 active projects worldwide. Some sites Conservancy, ExxonMobil continues to progress require minimal to no remediation activity, land conservation as a viable disposition option. while others pose longer-term challenges.
Improving supply chain sustainability
ExxonMobil is working with our suppliers initiative to consolidate shipments into larger by about 1.2 million liters per year—the to identify sustainable alternatives through- 40-foot containers rather than shipping equivalent of removing about 585 cars from out the supply chain. Our procurement many smaller-sized containers resulted in U.S. roads. organization’s Total System Cost approach a 30-percent reduction in the total number Our efforts to improve supply chains is intended to identify and reduce waste and of shipments, thereby reducing total fuel extend to our own products and deliveries inefficiency in the supply chain. Additionally, consumption and air emissions. as well. For example, we seek to fill truck- our global sourcing strategy development Within our Chemical operations, direct deliv- loads and optimize packaging to reduce the process encourages the consideration of eries of polyolefin products to customers in number of trips while providing associated environmental performance when making rail cars increased from 26 percent in 2005 fuel and cost savings. sourcing decisions. to 43 percent in 2010. This decreased the Recent actions in our upstream opera- number of trips to rail storage yards by more tions in Cameroon and Chad illustrate the than 5000, reducing diesel fuel consumption benefits of Total System Cost efforts. An 30 exxonmobil.com
case study
Natural Gas: An Abundant, Cleaner-Burning Energy Solution
The world faces multiple energy and environmental challenges. We must provide safe, reliable, affordable, and environmentally responsible supplies of energy in order to sustain and improve living standards for people worldwide. Given its abundance, affordability, and lower carbon profile, natural gas is already helping us to address these challenges.
By 2030, we expect natural gas to surpass Hydraulic fracturing Addressing stakeholder coal as the second-largest source of energy, As the world’s largest public natural gas behind oil. In our Outlook for Energy, we concerns producer, ExxonMobil brings supplies project natural gas will satisfy more than Stakeholder groups have recently expressed of this cleaner-burning energy source 25 percent of the world’s demand for energy concerns about potential environmental to global markets in a safe, reliable, and in 2030, which represents about twice the and health issues, including freshwater responsible manner. As part of this under- amount used in 2000. This demand will be use, the migration of gases and hydraulic taking, we engage with stakeholders on met through a major technological shift fracturing additives to groundwater or to the a range of topics related to natural gas that has unlocked massive reserves in the surface, and the handling of by-products. production and transportation. United States and around the world. ExxonMobil addresses these concerns by With the rise of unconventional natural gas carefully designing and completing our wells Powering a brighter, cleaner and oil production around the world, one and rigorously managing the entire process. energy future topic garnering significant media and politi- ExxonMobil chairs the American Petroleum cal attention is the industry-wide practice Institute working group that has developed A major use of natural gas is as a fuel to of hydraulic fracturing. four best management practice documents produce electricity. Increasing natural encompassing the life cycle of unconven- gas use in power generation presents a Extracting natural gas from certain forma- tional resource development. We work with very cost-effective and large-scale option tions, including shale, tight sandstones, state governments and multistate entities to currently available to reduce greenhouse and coal beds, requires drawing the address concerns, establish effective regu- gas emissions. resource through openings about one half the width of a human hair. Hydraulic latory frameworks, and implement industry Compared to coal-fired plants, natural gas- fracturing uses water pressure to create consensus on best management practices. fired power plants can cut carbon dioxide hairline fractures in rocks deep under- Government and independent reports (CO2) emissions by up to 60 percent. In addi- ground so natural gas can flow. The confirm that stimulating wells with hydraulic tion, gas-fired plants significantly reduce amount of time needed to fracture each fracturing poses no inherent risk to water particulate and waste generation, and virtu- well stage is typically only four to eight supplies. Part of this finding has to do with ally eliminate mercury emissions, while also hours, as compared to the weeks it can the fact that natural gas resources are sepa- having low emissions of nitrogen oxides and take to complete the many steps needed rated from groundwater by thousands of feet sulfur dioxide. to drill a well. of impermeable rock. Still, our industry takes Another benefit of natural gas-fired power Interestingly, hydraulic fracturing is not a new extra precautions to protect and conserve generation is that it is competitive without technology. Our industry has safely employed water supplies. subsidies or mandates. Moreover, where gov- the technology as part of drilling more than ernments adopt policies that make CO2 and 1 million wells since the 1940s. What is new Protecting fresh water other emissions more costly, natural gas will is the combination of the fracturing practice Water supply, especially in water-stressed be even more competitive in the power gen- with other techniques, such as horizontal regions, is an environmental issue of growing eration sector, as compared to coal. Installing drilling and multizone stimulation. importance and one ExxonMobil takes seri- carbon capture and storage technology could ously. Hydraulic fracturing requires fresh also further reduce emissions (see page 35). water, though not nearly as much as other
ExxonMobil and XTO Energy Inc. merger
The merger of ExxonMobil and XTO Energy unconventional natural gas resources in the for local, state, and federal governments. In Inc. combines the strengths of our orga- United States to meet the country’s needs 2008, natural gas contributed $385 billion nizations to help us to further unlock the for 100 years at current consumption rates. to the U.S. economy and supported nearly growing natural gas potential in the United 3 million American jobs. This is great news for America’s energy States. According to the Massachusetts security and the economy. Natural gas Institute of Technology, there are enough production generates jobs and revenues 2010 Corporate Citizenship Report 31
energy production operations. Compared to coal production, hydraulic fracturing uses Hydraulic Fracturing Example1 about one-tenth the amount of water.
To minimize environmental impacts and Berlin Empire burden on local water infrastructure, Television State ExxonMobil is using increasing amounts Tower Building of recycled water. In 2011, our operations in the Marcellus region in the northeast- ern United States will expand the use of recycling produced water in our fracturing process. In addition, pipelines will be laid where feasible to transport fresh water for the process. This will reduce the need for pits to temporarily store fresh water and will reduce truck traffic. In all cases, we Solid Rock Layers appropriately treat or dispose of remain- ing by-products according to local, state, Wellhead and federal regulations. Additionally, all of 1000 ft our drilling rigs in the Marcellus region use 305 m Soil closed loop drilling fluid systems. These systems eliminate drilling pits, reducing the overall site footprint. Multiple Layers of With reports of potential contaminants in Steel Casing drinking water sources, the use of additives and Cement 2000 ft in hydraulic fracturing fluids has been a 610 m focal point of debate. ExxonMobil’s natural gas production operations use the smallest proportion of fluid additives needed to be safe and effective. Fracturing fluids typically used in our operations contain approximately 99.5 percent water and sand, and 0.5 percent 3000 ft special purpose additives. These ingredients 915 m are necessary to reduce friction, prevent bacterial growth, and minimize scale forma- tion that can corrode pipes.
A vital component of building community Aquifer trust is transparency of operations. We 4000 ft support the disclosure of the ingredients 1220 m Multiple used in hydraulic fracturing fluids, including Layers of Steel Casing on a site-specific basis. We work with indus- and Cement try associations to provide regulators and 50 ft first responders the information they require about fracturing ingredients. We also partici- pate in the state-based national database for 5000 ft fracturing fluid ingredients jointly sponsored 1525 m by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. This database is now available Shale to the public and provides a transparent, Zone consolidated source of information across industry on a site-by-site basis. 6000 ft Hairline Fractures Created 1830 m On the Web: Natural Gas exxonmobil.com/naturalgas
1The diagram represents a typical well design for a shale gas operation. Other well designs vary to meet the local geology. 32 exxonmobil.com
Managing Climate Change Risks
HIGHLIGHTS ~5 20% $1.6 million metric tons reduction in upstream billion invested to of CO2 captured for hydrocarbon flaring improve energy efficiency underground injection and reduce GHG emissions since 2006
Performance Overview
What we said in 2009 What we did in 2010 What we plan to do improve energy efficiency by at least 10 improved energy efficiency and continue to improve energy efficiency percent between 2002 and 2012 across remained on track to achieve our 2012 by at least 10 percent between 2002 and our worldwide refining and chemical goal for refining and chemical operations 2012 across our worldwide refining and operations supported research on fuel from algae chemical operations continue efforts to reduce upstream with the opening of a new greenhouse continue efforts to reduce upstream hydrocarbon flaring research and testing facility hydrocarbon flaring advance technology solutions advanced carbon capture and storage explore ways to integrate new technolo- for reducing greenhouse gas (GHG) (CCS) and CFZ™ technology to reduce gies to reduce GHG emissions into large emissions GHG emissions oil and gas projects engage with governments globally on engaged with governments globally on start up new cogeneration facilities in developments in climate change policy climate change policy Singapore and the Netherlands 2010 Corporate Citizenship Report 33
Addressing the risks of climate change will require significant efforts by industry, government, and society. Expanding energy supplies to meet global demand while developing technologies that reduce GHG emissions are among the world’s greatest challenges.
At ExxonMobil, our strategy to reduce GHG improve energy efficiency and reduce GHG Flaring. Hydrocarbon gases are naturally emissions is focused on increasing energy emissions. In addition, we have invested brought to the surface during crude oil efficiency in the short term, implementing over $5 billion in gas utilization and commer- extraction. In some instances, this associ- proven emission-reducing technologies in cialization projects to reduce routine natural ated gas is flared or burned, either as a safety the near and medium term, and developing gas flaring. measure or as a means of disposal. Gas is breakthrough, game-changing technologies flared only when alternate options to utilize Greenhouse gas emissions. In 2010, direct for the long term. Technological innovation the associated gas have been exhausted. GHG emissions2 from our equity operations will play a central role in our ability to increase were 132 million metric tons. Indirect GHG Commercial alternatives for associated gas supply, improve efficiency, and reduce emis- emissions from purchased electricity and require a business environment with the sions. Approximately 90 percent of the GHG steam at our equity operations were estimated right conditions, including available markets, emissions generated by petroleum prod- to be 15 million metric tons. After subtracting infrastructure investments, and appropriate ucts are released when customers use our the equity GHG emissions from the produc- regulations—currently not available in many products, and the remaining 10 percent are tion of electricity and steam exported from our countries. Reducing the amount of flared gas generated by industry operations.1 Therefore, operations (included in our direct emissions), is an ongoing challenge for ExxonMobil’s technology is also needed to reduce energy- our net equity GHG emissions were estimated operations in areas with limited infrastructure related emissions by end users. to be 127 million metric tons. This is an increase for putting the natural gas to beneficial use. of about 4 million metric tons, or 3 percent In 2010, our upstream flaring averaged Mitigating operational greenhouse from 2009. While increases from new projects 350 million cubic feet per day, a reduction of gas emissions such as liquefied natural gas production more than 20 percent from 2009 and nearly In our operations, we focus on five key levers in Qatar and operations in Iraq increased 60 percent from 2006. We continue to seek to reduce GHG emissions: flare reduction, GHG emissions by 5 million metric tons, we opportunities to reduce flared gas as a means energy efficiency, cogeneration of power and offset GHG emissions by 3 million metric of decreasing our overall GHG emissions. steam, carbon capture and storage (CCS), tons through energy management and flare Our operations in Nigeria and Equatorial and production efficiency. Since 2006, we reductions. The remainder was due to normal Guinea account for the greatest percentage have invested $1.6 billion in activities that variations in operations.
Technological innovations to meet growing demand
ExxonMobil Operations Consumers (End users, power producers, and manufacturers) NEAR TERM
• Energy efficiency improvements • Conventional vehicle through the Global Energy engine and transmission Management System and improvements Production Operations Energy • Tire and automotive parts Management System technology • Flaring reduction increase • Enhanced lubricants supply • Cogeneration expansion • Use of advanced plastics to • Selective application of carbon minimize material use capture and storage technology • Public awareness campaigns • Efficiency improvements in to encourage energy efficiency Technology the production of liquefied natural gas, oil sands, and unconventional gas reduce improve LONG TERM emissions efficiency • Carbon capture and storage • Carbon capture and storage • CFZ™ technology applications for stationary sources • • Efficiency improvements in Advanced internal combustion the production of matured engine research field, liquefied natural gas, and • On-board hydrogen generation oil sands for fuel-cell vehicles • Advanced biofuels • Support research conducted by the Global Climate and Energy Project (including carbon capture and storage, solar, and biofuels)
1International Energy Agency 2Our calculations are based on the guidance provided in the Compendium of Greenhouse Gas Emission Estimation Methodologies for the Oil and Gas Industry (American Petroleum Institute) and the Petroleum Industry Guidelines for Reporting Greenhouse Gas Emissions (International Petroleum Industry Environmental Conservation Association). 34 exxonmobil.com
of flared gas, contributing about 70 percent Oil sands crude has similar CO2 emis- Greenhouse Gas Emissions (Absolute) of our upstream flaring. We continue to make sions to other heavy oils and generates 6 Direct equity, CO2-equivalent emissions (millions of metric tons) infrastructure investments to improve gas percent more CO2 emissions than the U.S. Upstream Downstream Chemical management in these countries. In 2010, we crude supply average for the full life cycle, Cogeneration and Hong Kong Power achieved an almost 40-percent reduction in according to Cambridge Energy Research flaring in Nigeria and a more than 10-percent Associates. According to Environment 07 139 decrease in Equatorial Guinea compared Canada, since 1990, Canada’s oil sands 08 130 to 2009. industry has reduced production-related emissions by almost 40 percent per barrel. 09 128 Efficiency in ExxonMobil operations. We recognize there is still work to be done. Producing fuel and petrochemicals requires 10 132 ExxonMobil and our Canadian affiliate, significant amounts of energy. In 2010, our Imperial Oil, are committed to reducing operations consumed approximately GHG emissions at our oil sands facilities 1.47 billion gigajoules of energy. Since 2000, Greenhouse Gas Emissions (Normalized) by investing in the development of incre- we have used our Global Energy Management Direct equity, CO2-equivalent emissions mental improvement and game-changing System (GEMS) to systematically identify and excluding cogeneration and Hong Kong Power technologies. These technologies, coupled (metric tons per 100 metric tons of throughput address operational efficiency opportunities. or production) with cogeneration, can result in even greater Upstream Downstream Chemical We remain on track to achieve our goal emissions reductions. of improving energy efficiency across our At our Kearl oil sands mining project, we 07 19.8 worldwide refining and chemical operations 08 18.7 will deploy a new proprietary technology— by at least 10 percent between 2002 and 09 18.1 paraffinic froth treatment—to remove fine 2012. We have improved energy efficiency by 10 18.5 clay particles and water from the bitumen an average of 7.5 percent in refining and more and produce a product suitable for pipeline 07 17.4 than 10 percent in chemical since 2002. At transport to market, eliminating the need for 08 17.0 our Baton Rouge Chemical Plant in Louisiana, an on-site upgrader. Processing bitumen 09 16.7 we are upgrading existing equipment to 10 16.6 once, rather than twice (in an upgrader and at improve energy efficiency, reliability, and raw a refinery), reduces life cycle GHG emissions. 07 42.0 material flexibility. We anticipate the upgrades We have also developed a new technology 08 39.8 will be completed by the end of 2011 and will called LASER (liquid addition to steam to 09 40.2 reduce annual GHG emissions by approxi- enhance recovery) to improve in situ oil sands 10 38.2 mately 80,000 metric tons. At Beaumont, recovery. The LASER technology allows for Texas, we constructed a steam line from the more energy-efficient and higher recovery of chemical plant to the refinery, where there bitumen and will reduce the GHG intensity of is a demand for steam. The line will reduce Greenhouse Gas Reductions from this process by about 25 percent. Our cyclic ExxonMobil Actions annual costs by more than $1.5 million and solvent process, currently under development, Direct equity, CO2-equivalent emissions will reduce GHG emissions by 21,000 metric (millions of metric tons) is a nonthermal method for recovering heavy tons per year, or the equivalent of removing Energy efficiency and cogeneration Flare reduction oil that could potentially reduce the GHG 4000 cars from U.S. roads. intensity of heavy oil production by about 07 5.2 In 2010, the four buildings at our Brookhollow 90 percent. 08 7.5 campus in Texas received U.S. Environmental Using cogeneration in oil sands produc- Protection Agency ENERGY STAR Awards, 09 9.6 tion reduces our energy requirements and the national symbol for superior energy effi- provides an efficient means for producing 10 12.3 ciency and environmental protection. Overall, electricity and steam at the same time. the Brookhollow campus has reduced its Cogeneration planned for Kearl will reduce total energy consumption by 27 percent from CO2 emissions by 500,000 metric tons a 2007 through 2010, or by 13,320 gigajoules. Hydrocarbon Flaring from Upstream year, compared to purchasing electricity for Oil and Gas Production Our Global Real Estate and Facilities group the first phase of the project. Cogeneration (millions of metric tons) has been working on a Green Assets initiative facilities at our Cold Lake in situ opera- 07 7.5 to minimize the environmental footprint of tion reduced CO2 emissions by 40 percent our assets by utilizing best practices from compared with generating electricity from 08 5.2 building standards such as LEED, BREEAM, coal-fired plants and processing steam from 09 4.0 and Green Star. The group also developed conventional boilers. design criteria to reduce energy consumption 10 3.2 Another important concern surrounding oil in facilities in the United States, which are now sands development in Canada is the impact being expanded internationally. of water withdrawal on the Athabasca River Improving efficiency in upstream oil sands in Alberta. About 3 percent of the average production. Canada’s oil sands are ranked natural flow of the Athabasca is allocated second only to Saudi Arabia in terms of to the oil industry, half of which is used. At recoverable oil reserves. We recognize there our Kearl oil sands project, we are con- is concern among a range of stakeholders structing a water storage system to reduce regarding the increased energy intensity water withdrawal from the Athabasca River and water use associated with developing during low-flow periods. Kearl will also use oil sands. advanced technologies to recycle water and 2010 Corporate Citizenship Report 35 reduce water demand. Water extracted from the Athabasca River will be re-used about 18 times. Our Cold Lake facility uses half a barrel of fresh water for each recovered barrel of bitumen. To significantly reduce water consumption, approximately 95 percent of the water recovered from oil production is treated, recycled, and re-injected as steam.
ExxonMobil and Imperial Oil are also pro- gressing promising research on nonaqueous extraction. This emerging technology has the potential to virtually eliminate the need for water and thus revolutionize bitumen extrac- tion recovery for oil sands mining operations.
Cogeneration. As an industry leader in In 2010, ExxonMobil completed an expansion of the world’s largest carbon dioxide capture plant located cogeneration—the simultaneous production near La Barge, Wyoming. The expanded plant will help reduce GHG emissions and enhance oil production of electricity and heat or steam that can be in the United States. used for industrial purposes—we have inter- ests in more than 100 cogeneration facilities ExxonMobil’s customers include both busi- in more than 30 locations. ExxonMobil has Doha Carbon and Energy Forum nesses and individual consumers. Improving interests in about 4900 megawatts of cogen- energy efficiency can benefit both. In late 2010, approximately 150 experts eration capacity around the world—enough from internationally renowned academic, to supply electricity to more than 2 million Improving efficiency in the industrial industrial, and governmental institutions U.S. homes each year. In 2011, close to sector. The industrial sector is one of the convened at the Doha Carbon and Energy 400 megawatts of capacity will be added largest direct and indirect consumers of Forum in Qatar to discuss the challenge through the start-up of new facilities in energy. Through 2030, we predict efficiency of increased energy use, finite energy Singapore and the Netherlands. improvements will offset 60 percent of the demand growth in the two largest industrial reserves, and the impact of greenhouse Carbon capture and storage. ExxonMobil subsectors: heavy industry and chemicals. gas emissions. The event was organized has been active in developing and apply- ExxonMobil is proud to work directly with by the Qatar Foundation for Education, ing CCS component technologies since manufacturers such as Toyota and GE to Science, and Community Development; the 1980s. CCS is a process to safely and help them develop more energy-efficient Qatar Petroleum; and ExxonMobil Qatar effectively capture, transport, and store CO2 products for their consumers and to improve Inc. The forum reviewed recommenda- in underground geologic formations such as their own operational efficiency. tions on current, emerging, and innovative saline reservoirs, depleted oil or gas reser- technologies relevant to Qatar and the voirs, or deep coal beds. Through our natural Our Lubricants and Specialties business Gulf region. It is anticipated that the Qatar gas operations in Wyoming and our equity regularly engages with industrial custom- Foundation-Energy and Environment interest in the Sleipner field in Norway, we ers to develop lubricants and oils that Research Institute will follow up on the captured approximately 5 million metric tons provide increased fuel economy, longer oil recommendations of the forum. of CO2 for underground injection in 2010. life, and extended equipment life. These products include: Our LaBarge Shute Creek facility in Wyoming completed an $86 million expansion in 2010 • Mobil SHC synthetic lubricants and of the world’s largest carbon capture plant. greases—recognized for longer oil perfor- The facility has the capacity to capture mance cycles compared to conventional oils—help extend industrial equipment life, approximately 365 million cubic feet of CO2 per day. The captured carbon dioxide is sold produce less used oil, and offer potential to companies for enhanced oil recovery, energy and replacement cost savings; helping to extend the productive lives of • Mobilgear SHC XMP delivers optimum mature oil fields. equipment protection and oil performance for extreme operating conditions associated with Improving customer efficiency wind turbines; and, Energy efficiency—technologies and actions • Mobil SHC Pegasus delivers a high level of that enable us to do the same, or more, performance to a wide range of natural gas with less energy—is one of the largest and engines used for cogeneration and is one of lowest-cost approaches to extend our world’s the first gas engine oils to offer fuel economy benefits in this sector. HE Abdullah bin Hamad Al-Attiyah, Deputy energy supplies and reduce GHG emissions. Premier and Chairman of the Emiri Diwan We believe gains in energy efficiency through Improving efficiency for the individual con- and then Minister of Energy and Industry and Chairman of Qatar Petroleum 2030 will reduce global energy demand sumer. We actively support initiatives to reduce growth by about 65 percent and will offset consumer emissions from the use of our prod- more than 75 percent of the carbon dioxide ucts in the transportation sector. To improve emissions that would have been expected the efficiency of the global vehicle fleet, without efficiency gains. ExxonMobil is working with external partners such as automobile and tire manufacturers. 36 exxonmobil.com
By developing near-term and long-term Algae-based biofuels may provide an attrac- advances in vehicle, fuel, and lubricant tech- tive option that could be used to supplement nology, we can help significantly reduce trans- petroleum fuels within the current supply and portation-related GHG emissions (see below). use system and with the existing vehicle fleet.
In 2009, we announced our collaboration with Investing in long-term scientific Synthetic Genomics Inc. (SGI) to research research algae-based biofuels. This research and ExxonMobil is investing in long-term scientific development program is a long-term effort, research that may have transformative poten- and if milestones are successfully met, we tial for the economy and the environment. expect to invest more than $600 million.
Global Climate and Energy Project. In 2002, In 2010, we commissioned a new green- ExxonMobil made a long-term research com- house research and testing facility in La Jolla, mitment by becoming a founding sponsor California, to supplement ongoing work in the of the Global Climate and Energy Project laboratory. In the greenhouse, scientists and (GCEP) at Stanford University in California. engineers are experimenting with different We have since contributed more than half of algae growth systems, light levels, temperature our $100 million commitment to the program. conditions, and carbon dioxide and nutrient This pioneering research program is focused concentrations in a setting that more closely on identifying breakthrough energy tech- reflects real-world conditions. This will help us Energy efficiency is one of the most effective tools nologies that reduce GHG emissions and better evaluate whether large-scale volumes available for reducing GHG emissions. The high efficiency cogeneration plant at the Antwerp refinery that could be developed on a large scale of affordable biofuel can be made from algae. in Belgium reduces Belgium’s carbon dioxide emis- within a 10- to 50-year time frame. GCEP has Because scientists are using both naturally sions by approximately 200,000 metric tons per year. sponsored more than 66 research programs occurring and engineered strains of algae to at 27 institutions in Australia, Europe, Japan, identify optimal characteristics for growth, and the United States. harvesting, and bio-oil recovery, environmental Advancing renewable biofuels. ExxonMobil considerations and safety were factored into is focused on improving the efficient supply the design and construction of the greenhouse. of current energy sources, such as oil and The facility is built in a secure area of the SGI natural gas, while developing potential campus and has containment and treatment new sources, such as biofuels from algae. systems for all greenhouse waste streams.
Improving efficiency in transportation
Mobil 1 Advanced Alternative fuel Fuel Economy research could can improve fuel make fuels more economy by up to available and 2 percent versus affordable with motor oils most lower life cycle GHG commonly used. emissions.
Advances in the Advanced tire internal combus- lining technology tion engine could keeps tires properly achieve significant inflated longer. Cars fuel economy with properly inflated improvement. tires may save up to an extra tank of gas annually.
Fuel cell with Strong, light- onboard hydrogen weight plastics generation could help reduce vehicle be up to 80 percent weight. For every more fuel efficient 10-percent drop in than today’s internal vehicle weight, fuel combustion engine. economy improves by ~7 percent. 2010 Corporate Citizenship Report 37
Algae-based biofuels present potential Panel on Climate Change (IPCC). In 2010, one market innovation, such a carbon tax could environmental benefits compared to other of our scientists participated as a reviewer play a significant role in addressing the chal- biofuels. At the La Jolla testing facility, algae in an IPCC report on renewable energy lenge of rising GHG emissions. International are cultivated in salt water drawn from the technologies and organized a workshop to accords and underlying regional and national nearby Pacific Ocean. A commercial algae- provide industry input to the IPCC on this regulations for GHG reduction are evolving growing and algae-harvesting farm could use report. We work with legislative and regula- with uncertain timing and outcomes, making land and water unsuitable for crops, eliminat- tory processes around the globe to assist in it difficult to predict their business impact. ing competition for acreage or fresh water the design of practical, cost-effective ways In 2010, we engaged in discussions around intended for human or agricultural use. to implement climate policies. these issues with numerous governments and legislators from Australia, Canada, the The next phase of our project is to build a Effective public policy should promote inno- European Union, Japan, Singapore, and the larger testing facility in an outdoor setting; work vation, encourage competition, set goals, and United States. on this phase has already begun. Successful provide a broad framework for entrepreneurs research could create an integrated system and innovators to achieve these goals. When We test a range of potential cost scenarios for where algae, fed on CO2 captured from a considering policy options, ExxonMobil advo- energy-related GHG emissions in our Outlook large stationary source, would then be refined cates an approach that: for Energy (see page 6), which we prepare into a variety of transportation fuels. • Ensures a uniform and predictable cost of each year to assess the business environment carbon across the economy; and use in our investment evaluations. Public policy debate • Lets market prices drive the selection of A number of countries have adopted, or solutions; On the Web: are considering the adoption of, regula- Climate and emissions • Maximizes transparency to companies tory frameworks to reduce GHG emissions, exxonmobil.com/climate and consumers; including cap and trade regimes, carbon Carbon Disclosure Project response • Reduces administrative complexity; taxes, increased efficiency standards, and exxonmobil.com/cdp incentives or mandates for renewable energy. • Promotes global participation; and, Our actions to reduce GHG emissions Assessing policy options to reduce emis- • Is easily adjusted to future developments exxonmobil.com/emissions sions requires an understanding of their likely in climate science and the economic impacts Global Climate and Energy Project effectiveness, scale, and cost, as well as of climate policies. their implications for economic growth and gcep.stanford.edu quality of life. While the final determination A well-designed carbon tax is better able Oil sands and timing of policy belongs to governments, to accommodate these key criteria than exxonmobil.com/oilsands other alternatives, such as cap and trade. ExxonMobil is—and will continue to be—a Climate change risks Importantly, a carbon tax can be made constructive participant in these discussions. exxonmobil.com/10k (page 4) revenue-neutral via tax offsets in other areas. Our scientists, engineers, and managers Combined with further advances in energy Algae research participate in research and assessment efficiency and new technologies spurred by exxonmobil.com/algae activities, such as the Intergovernmental
Technology Management System
ExxonMobil pursues research into proprietary which must be completed prior to moving Wyoming. This testing will occur more than breakthrough technologies that will not only on to the next phase of development. two decades after we received our first enhance existing business, but provide step Assuming the likelihood of passing each patent on the technology. CFZ™ technol- changes in the Corporation’s competitive posi- gate is about 70 percent, the probability ogy freezes CO2 and effectively separates tion. Research and development of an energy of reaching broad deployment would be it as well as other impurities, enabling us breakthrough technology may take 10 to 20 about 8 percent. A simplified version of to process gas with high concentrations years, with up to an additional decade before this pipeline can be seen below for carbon of CO2. The technology could both unlock the technology achieves widespread use. capture and storage technology. vast new natural gas resources and make CCS more affordable and efficient. ExxonMobil utilizes a Technology Manage- For example, in 2011, we will begin testing ment System to steward this process. This our proprietary CFZ™ technology in a com- system consists of several gates, each of mercial demonstration plant near La Barge,
Basic Laboratory Pilot First Industry use science research testing commercialization and benefits
Form initial CO2 CFZ™ LaBarge Shute Enhanced oil and gas hypothesis separation technology Creek facility, recovery and reduced Wyoming GHG emissions 38 exxonmobil.com
Economic Development
HIGHLIGHTS $77+ 60% $237 million spent of our employees million in combined on corporate and are located outside corporate and employee technical training the United States giving in the form of cash, goods, and services worldwide
Performance Overview
What we said in 2009 What we did in 2010 What we plan to do spend $1 billion a year with U.S. spent $812 million with U.S. minority- fund 10 scholarships for a Masters minority- and women-owned businesses and women-owned businesses in Global Health Science at Oxford by year-end 2012 elected to serve on the Iraqi EITI Council University to help train the next genera- tion of health leaders from developing work with the governments of Launched a new national content countries and emerging markets Cameroon, Equatorial Guinea, Web-based toolkit Kazakhstan, and Nigeria to advance approach a 90 percent Russian work- awarded $1 million to technologies their Extractive Industries Transparency force at our Sakhalin-1 project by 2012 identified through the Women / Tools / Initiative (EITI) validation efforts before Technology: Building Opportunities and Launch a Latin America the March 2010 deadline Economic Power Challenge Businesswomen’s Network study the benefits of our operations- conducted a pilot Supplier Diversity work with Medicines for Malaria related and social investments to host Training in Accra, Ghana, with our Africa Venture to fund clinical trials of new communities Businesswomen’s Network members anti-malarial drugs in Papua New Guinea continue to expand the ExxonMobil Malaria Initiative to relevant tropical countries outside of Africa 2010 Corporate Citizenship Report 39
Contributing to economic development in the countries where we operate is part of ExxonMobil’s business strategy. We focus on economic growth as a precondition for achieving development targets such as the United Nations Millennium Development Goals, which encompass a full range of corporate responsibility issues, from environmental sustainability and combating HIV/AIDS to promoting gender equality and achieving universal primary education.
Achieving sustainable impact is no small chal- Individual plans are customized for each contracts for our contractors and suppli- lenge, especially when faced with competing country to account for local factors such as ers to hire and train a national workforce. local priorities, high expectations of the pace regulatory requirements, business environ- We strategically implement development of progress, and shifting political agendas. ment, workforce capability, supply base, and programs to meet local hiring objectives and As a significant presence in many emerging infrastructure. As a project progresses from overcome challenges related to availability markets, ExxonMobil works alongside a host one stage of development to the next, the of experienced candidates and in-country of other actors to overcome the many barriers National Content Plan must be reviewed and training capabilities. to economic growth. revised accordingly. Local hiring. We have made significant Our contractors also play a significant role in strides in hiring host country nationals. The National content the execution of the National Content Plan. In company uses a variety of best practices to It is a business imperative that our pres- many instances during the project phase, our support local hiring, including on-campus ence contributes to the social and economic Engineering, Procurement, and Construction recruiting, campus recruiting focused on development of local communities and (EPC) contractors drive much of the work- nationals studying abroad, employee net- host nations. By establishing comprehen- force and supplier development. We ensure working, trade organization and Web site sive programs in the areas of workforce that our national content priorities are met by referrals, and external search firms. development, supplier development, and including requirements in our EPC contracts. In 2010, approximately 60 percent of our strategic community investments, we help EPC contractors are expected to execute employees were located outside the United to build capacity and sustain economic these plans through their subcontractors. growth beyond the life cycle of our projects. States. ExxonMobil expatriates (individuals Collectively, we refer to this approach as Our National Content Development— working in a country other than their country national content. Guidelines, Strategies, and Best Practices of permanent residence) are deployed around Guidebook provides an overview of the key the globe to share their expertise as well as A successful national content program elements of a National Content Strategy train and mentor nationals for operational requires long-term perspective driven by and Plan; models and tools for the suc- and leadership roles. In 2010, expatriates clearly defined and consistently applied cessful development of national content accounted for approximately 5 percent of management processes. National content is components; and roles and responsibilities our total workforce. integrated into overall project and execution at the corporate, country, and project levels. Training and development. With careful through the ExxonMobil Capital Projects This past year, we launched a new national attention to the job requirements of each Management System (EMCAPS). As part of content Web-based toolkit consisting of best stage of development, we apply global EMCAPS, every new upstream project in an practices, sample tools for national content principles in a proven training curricu- emerging market must develop a project- implementation, and case studies. specific National Content Plan. lum to address local challenges. Training typically covers ExxonMobil culture, ethics, A plan consists of goals and objectives; an Workforce development and business practices; safety practices; outline of the approach and requirements for Workforce development is a long-term environmental regulations; English language; workforce development, supplier develop- approach to recruiting and training that skill-specific training; facility-specific training; ment, and strategic community investments; enables the Corporation to meet future staff- work assignments and on-the-job training; performance monitoring; and reporting. ing needs and business objectives. Where and mentoring and coaching. applicable, we include requirements in our
ExxonMobil Capital Projects Management System
STAGE 1 STAGE 2 STAGE 3 STAGE 4 STAGE 5
Development/ Evaluate and Define project/ Execute Operate business planning select project execution planning project
Early National Comprehensive Implement Annual review of Content Plan National Content National National Content Plan developed Plan completed Content Plan and revise as part of and approved by business plan project team 40 exxonmobil.com
In addition to early career training, we pest control. As local contractors develop Training Expenditures and Number of Employees Trained provide corporate and technical training to their capability and expertise, they begin to Spending (millions of dollars) employees throughout their careers. In 2010, compete for bigger packages. Employees trained (participants) our major business units together spent Purchasing from minority- and women- more than $77 million on training, reaching 07 $61 owned businesses. Expanding opportunities more than 61,000 participants. To strengthen 08 $69 for minority- and women-owned business our technical capacity, approximately 09 $71 enterprises (MWBEs) and local suppliers 35,000 participants attended more than 10 $77 provides economic growth to local areas, 3700 professional technical training sessions. 07 35,000 expands our supplier base, and builds 08 48,000 Nearly 3300 employees at various levels of customer and supplier loyalty. 09 52,000 management participated in ExxonMobil’s In the United States, our Supplier Diversity 10 61,000 leadership development training programs Program ensures that qualified MWBE suppli- in 2010. Approximately 25 percent of par- ers are included in our procurement sourcing ticipants were women and 59 percent were process. In 2010, we made continued progress non-U.S. employees. Expatriates by Region of Origin toward our goal of purchasing materials and services worth $1 billion annually from MWBEs Supplier development by year-end 2012. This represents 7 percent of Supplier development is a long-term invest- our total procurement-managed spending in the ment of time, people, and resources to United States. In 2010, we spent $812 million, improve supply chain reliability, reduce costs, North America 1778 representing a 36-percent increase since 2006. strengthen host country economies, and promote ExxonMobil as a partner of choice. We are considering opportunities to further We are dedicated to working with host gov- expand our program internationally in Australia, Total ernments, nongovernmental organizations Canada, China, and the United Kingdom. In the 3833 (NGOs), and other stakeholders to develop United Kingdom, we introduced tools to allow procurement staff to more easily identify and Europe 1141 local capacity. The focus on supplier develop- ment begins in the early stages of the project work with minority suppliers. Access to diverse life cycle and continues to evolve throughout suppliers, defined differently by country, poses the life of the operation. Our ultimate goal is a challenges as supplier diversity programs Asia Pacific 592 stable and globally competitive supply chain. mature internationally. Latin America 167 Africa/Middle East 155 To consistently develop local suppliers, best In addition to offering supply chain opportuni- practices are institutionalized through our ties to MWBEs, ExxonMobil funds scholarships global processes. These practices include for suppliers to attend specialized programs at local supplier databases, enterprise centers business schools in the United States. for business development and training, tailored work scopes, supplier forums, and Strategic community electronic bidding. investments Another proactive approach we employ is to As we invest in communities, we pursue break down large bid packages into scopes of long-term projects with strategic goals that work that enable local suppliers to compete are aligned with global and social priorities for—and win—small projects. For example, as well as our business strengths. We seek to in Indonesia, camp management projects have a more meaningful impact by focusing were divided into catering, maintenance, and the majority of our spending on significant challenges in the regions where we operate.
Best practice: Workforce development in Russia
Exxon Neftegas Limited (ENL) and its To successfully compete for national workers standards and are internationally accredited. contractors currently employ more than and meet its needs for skilled field personnel, The STTC facility provides on-the-job training 570 Russian nationals, making up 80 percent ENL invests in the training and development as well as theoretical instruction and net- of the Sakhalin-1 project workforce. As of national personnel. In 2000, ENL started working opportunities. In 2010, 41 trainees Russian national employees are trained its own technician training program. After graduated from the program, bringing the and gain experience, they will approach training three groups, ENL contracted PKT total since 2000 to 167. 90 percent of the workforce by 2012. A Training Services to create the Sakhalin small local population, combined with a Technical Training Center (STTC). Percent of Local Workforce in Sakhalin complicated economic crisis in the 1980s All training performed at the STTC is mapped and 1990s that steered people away from 05 64% against a Competency Assurance Program geology, engineering, or construction, 06 70% that includes necessary knowledge, aware- created the current competitive market for 07 72% ness, and skills assessments. Today, the 08 skilled workers. 78% training programs meet Russian regulatory 09 77% 10 80% 2010 Corporate Citizenship Report 41
Our worldwide spending includes con- tributions to nonprofit organizations as well as funds invested in social projects through various joint-venture arrange- ments, production-sharing agreements, projects operated by others, and contrac- tual social bonus arrangements. In 2010, Exxon Mobil Corporation, our divisions and affiliates, including XTO Energy Inc., and the ExxonMobil Foundation provided a combined $199 million in cash, goods, and services worldwide. Of the total, $119 million supported communities in the United States and $80 million supported communities in other countries.
Our signature programs address three Malaria is preventable, treatable, and curable. Research shows that when three-quarters of the people in a long-term social challenges that directly community use bed nets, the incidence of malaria infection decreases and the actual mosquito population impact the success of our own business: is reduced by 90 percent. eliminating malaria; advancing economic opportunities for women; and improving develop three new pediatric anti-malarial women’s economic participation, and identify- education, especially in mathematics and drugs and gain acceptance for the first-ever ing and deploying technologies to accelerate science. Ongoing stakeholder engage- malaria vaccine. women’s economic advancement. In 2010, ment helps us to identify local projects and ExxonMobil made grants totaling more than In 2010, ExxonMobil awarded more than partnerships that support our strategic $9 million—bringing our cumulative investment $14 million to 21 organizations for projects investments. We believe that public-private since 2005 to $41 million—to help women in across Africa and expanded our work into partnerships are key to improving difficult 88 countries fulfill their economic potential and the Asia Pacific region, where malaria social and economic issues. drive change in their communities. is also endemic. See the global citizen- ExxonMobil Malaria Initiative. Ending the ship stories on our Web site for numerous In partnership with Ashoka’s Changemakers spread of malaria will require multiple examples of our specific contributions to and the International Center for Research on approaches, including bed-net distribution, malaria initiatives. Women (ICRW), we implemented the Women preventive education, and research into / Tools / Technology: Building Opportunities Women’s Economic Opportunity Initiative. new and accessible treatments. Over the and Economic Power Challenge that identi- Enabling women to reach their economic last decade, ExxonMobil has emerged as a fied 268 transformative solutions from 67 potential is a critical driver of social develop- corporate leader in the fight against malaria. countries to promote women’s economic ment and progress. When women are able to Since 2000, we have made cash grants of advancement through technology. At the generate and control income, they invest a more than $83 million to help fund malaria 2010 Clinton Global Initiative annual meeting, large share of it in the health, education, and programs across sub-Saharan Africa. Our we announced $1 million in grants to support well-being of their families. This benefits the funding has allowed our partners to reach the expansion of high-impact, sustainable entire community. more than 39 million people; provided technology-driven business models identi- 11.4 million bed nets, 1.6 million doses We focus on three key strategies to improve fied through the challenge. One exemplary of anti-malarial drugs, and 820,000 rapid women’s economic opportunities globally: technology is a solar-powered drip irrigation diagnostic kits; and trained 116,000 health- developing women entrepreneurs and busi- system that enables women farmers to grow care workers. Our funding also helped to ness leaders, creating a level playing field for crops during a dry season. To further support
Best practice: Supplier development in Chad
Using local suppliers can be challenging the supplier assessment. The Center rates institutions to help local businesses access where local business expertise has not fully suppliers for eligibility for EEPCI contracts financial resources and demonstrate their developed or where safety and product and provides training to rated suppliers to ability to execute a contract. In 2010, four quality standards have not yet been met. improve their business and technical skills. training sessions were held for 42 par- Esso Exploration and Production Chad Inc. ticipants. The training included the IFC In 2007, EEPCI introduced an electronic pro- (EEPCI) works to improve local business small- and medium-enterprise training curement system and has since trained more and operating performance. package, which addresses private sector than 22 suppliers on electronic bidding, a skill management performance gaps and busi- EEPCI conducted a major assessment of that allows local suppliers to better participate ness needs. local supplier skills in 2006 and found signif- in EEPCI’s bidding process. While preserv- icant gaps in accounting, risk management, ing the integrity of the bidding process, the To date, more than 300 small and medium human resources, and other areas. Together system facilitates the application process enterprises have received training at the with the Chamber of Developing Enterprise and checks for completeness and errors. Enterprise Center. Chadian companies were and the Chadian Chamber of Commerce, awarded contracts for services totaling Together with the International Finance EEPCI opened an Enterprise Center in $110 million in 2010. Corporation (IFC), the Center developed 2006 to address gaps observed during strategies and programs with financial 42 exxonmobil.com
grant recipients, we are working with the to clarify their procurement processes and 2010 Community Investments by Focus Area Thunderbird School of Global Management’s encourage increased purchasing from (millions of dollars) Emerging Markets Laboratory to provide on- women-led businesses. the-ground business consulting support. Education. Globally, a strong focus on educa- We continue to support skills training for tion empowers communities and builds the Pre-college education $53.4 women entrepreneurs through regional foundation for human progress. Healthy and businesswomen’s networks, which focus on educated communities also create a stable expanding the number of women succeed- operating environment and a future pool of Higher education $42.6 ing in business and advocating for policies talented candidates for employment. Since to remove legal barriers. Our partner, Vital 2006, our contribution to education efforts Worldwide total* Civic and Voices, has provided training, business has totaled nearly $421 million. In 2010, we $237.1 community $40.4 exchange programs, and networking oppor- directed nearly $110 million to education tunities to 4100 participants in the Middle East worldwide, of which more than $42 million Employee and retiree giving $37.9 and North Africa and more than 7000 women was dedicated to math and science educa- in sub-Saharan Africa. We will support the tion in the United States. Health $22.5 launch of a Latin America Businesswomen’s Other education $13.6 Pan-European math and science program. Network in 2011. Public policy research $7.6 Our regional presence is a strategic advan- United appeals and Workplace giving $7.5 To aid supplier development, we supported tage that we employ to maximize the benefits Environment $6.9 our partner Vital Voices in conducting a four- of our community investments. In 2010, Arts and culture $4.7 day supplier diversity pilot program in Ghana ExxonMobil designed a pan-European *Total contributions include ExxonMobil corporate and XTO for participants from our African business- program to help students ages 15 to 18 think donations and employee and retiree giving through ExxonMobil’s matching gift, disaster relief, and employee giving programs. women network hubs in Cameroon, Ghana, in practical ways about the energy issues Kenya, Nigeria, South Africa, and Uganda. they will face in the future. Partnered with Content included key steps for becoming a Junior Achievement Young Enterprise Europe, supplier to multinational corporations, and for ExxonMobil funds the Sci-Tech Challenge to implementing in-country supplier diversity encourage interest in math-, science-, and training sessions and pilot activities in their technology-oriented careers. home countries. In 2011, the African busi- The three-year, $839,000 program will reach nesswomen network hubs will build on the approximately 10,000 students. In 2010, 2010 supplier diversity training by engaging approximately 60 schools, nearly 150 vol- with government and private sector officials unteers, and more than 1200 students from Belgium, France, Germany, the Netherlands,
Applying national content best practices in Papua New Guinea
We are applying best practices and lessons A class of a similar size will be recruited in program. Local suppliers must be finan- learned across our projects and operations 2011. Successful graduates will be prepared cially sound, technically capable, and to develop an effective National Content to operate and maintain this world-class competitive in price and quality. Plan for improving the economic and social liquefied natural gas production facility. Strategic community investments well-being of Papua New Guinea. Supplier development The project aims to improve living standards Workforce development The project supports the development of by investing in sustainable health, educa- Similar to our Sakhalin, Russia, operations, the local business economy through the tion, and agriculture projects. As part of our strategy is to increase the participation of purchase of goods and services in Papua our National Content Plan, we are commit- Papua New Guinean employees over the life New Guinea and by developing long-term ted to spending $20 million on strategic span of the project, and to provide the neces- supplier relationships. Through 2010, we community investment projects during the sary technical and professional skills training had already exceeded our commitment to construction phase and $5 million a year for working on existing and future projects. spend $450 million in Papua New Guinea, during the production phase. Through the with local spending totaling more than ExxonMobil Malaria Initiative, the project To facilitate implementation of this strat- $550 million. Local capacity is promoted collaborated with the Rotarians Against egy, the project is building several training by helping suppliers meet global stan- Malaria Program on logistics, planning, and facilities. The Port Moresby Construction dards, providing training for entrepreneurs, bed-net distribution. Project sites were also Training Facility, which officially opened in and creating business opportunities for added to the National Malaria Surveillance 2010, and the Juni Construction Training local small and medium enterprises. In Program and plans are under development Facility will train up to 4000 students during March 2010, the project opened a resource for enhanced malaria diagnostics at relevant the construction phase of the project. center to assist selected Papua New community clinics. More than 1000 commu- More than 400 trainees graduated from a Guinean suppliers to strengthen their nity members have been tested for malaria temporary training facility in 2010, including business processes and skills. We include and were treated if positive. We are also 84 women. To prepare for project start-up, requirements in our contracts with our working with Medicines for Malaria Venture 76 individuals were recruited to attend the multinational suppliers to prioritize the to fund clinical trials of new anti-malarial Production Operations Training Center in hiring of local firms, implement training, drugs in Papua New Guinea. Port Moresby in 2010, including 20 women. and execute a local business development 2010 Corporate Citizenship Report 43
Norway, and the United Kingdom participated • Sally Ride Science Academy: The Academy 2010 Community Investments by through online tools, national and regional focuses on curriculum augmentation to make Geographic Region competitions, and classroom events. Nearly math and science more relevant, especially (millions of dollars) 1200 students completed the online quiz with young girls. In 2010, we moved from based on general knowledge and our Outlook the pilot phase to conduct three academies, for Energy: A View to 2030. bringing the total number of educators trained to about 400. They have since trained more Focusing on math and science in the than 850 additional teachers. United States. Demand for science, technol- ogy, engineering, and mathematics (STEM) We continued to support diversity-based United States $154.8 professionals is rapidly expanding, yet fewer education programs such as the Hispanic Worldwide and fewer students are choosing to prepare Heritage Foundation, National Society total* for these important career tracks. In 2010, of Black Engineers, Society of Women $237.1 we continued to encourage students to study Engineers, Society of Hispanic Professional math and science through programs such Engineers, and the National Action Council as the National Math and Science Initiative for Minorities in Engineering, among others. Africa $33.9 (NMSI) and the Harris Foundation. Through Russia/Caspian $14.0 UTeach, Mickelson ExxonMobil Teachers Employee volunteerism and giving Canada $13.2 Academies, and the Sally Ride Science Asia Pacific $7.9 In 2010, more than 24,800 ExxonMobil Middle East $7.7 Academy brought to you by ExxonMobil, we Europe $3.7 employees, retirees, and their families world- Latin America $1.9 continue to give teachers the skills necessary wide donated more than 779,500 volunteer to motivate students to pursue careers in hours to 5500 charitable organizations in *Total contributions include ExxonMobil corporate and XTO math and science. For details about each of donations and employee and retiree giving through ExxonMobil’s 43 countries through company-sponsored matching gift, disaster relief, and employee giving programs. these programs, visit our Web site. volunteer programs. Of this, 12,500 partici- We also introduced new partnerships and ini- pants donated more than 179,400 hours to Worldwide giving tiatives to further advance math and science more than 1200 organizations in countries exxonmobil.com/contributions in the United States: outside the United States. Global citizenship stories • Change the Equation: In 2010, Rex W. Employees and retirees donated $38 million exxonmobil.com/globalstories Tillerson, chairman and CEO, joined the through ExxonMobil’s matching gift, disaster board of Change the Equation, a CEO-led relief, and employee giving programs. Math and science initiative launched by President Obama to When combined with corporate donations, exxonmobil.com/mathandscience encourage STEM literacy. ExxonMobil—together with our employees Change the Equation • NMSI Young Leaders Program: This and retirees—contributed $237 million to changetheequation.org program, founded by ExxonMobil and Fortune community investments around the world. National Math and Science Initiative magazine, seeks to address the gender gap nationalmathandscience.org in STEM fields by matching female college On the Web: Sci-Tech Challenge juniors majoring in STEM subjects with ExxonMobil Malaria Initiative http://scitech.ja-ye.org female executives working in these fields at exxonmobil.com/health Transparency Fortune 500 companies. In 2010, 22 pairs of Women’s Economic Opportunity Initiative exxonmobil.com/transparency executives and students participated in the exxonmobil.com/womensinitiative mentoring program.
Promoting revenue transparency
With good governance and accountability, Corruption. EITI is a unique collabora- will serve on the Iraqi EITI Council. In Papua the value generated from natural resources tion among governments, companies, civil New Guinea, our project has the potential to can provide a better standard of living and society, institutional investors, and inter- boost the country’s gross domestic product increased opportunities for the citizens of national organizations. Together, we share and provide a catalyst for employment and host countries. As part of our commitment the goal of implementing global principles further industry development. Project team to honest and ethical behavior, ExxonMobil that support improved governance through members from Esso Highlands Limited are is an active participant in transparency and the verification and disclosure of extractive active members of Transparency International anti-corruption programs. Transparency ini- industry payments to governments and gov- and acknowledge the government’s bilateral tiatives are designed to increase disclosure ernment revenue from those companies while Memorandum of Understanding. Over the past of government revenues from the production protecting confidential company information. several years, ExxonMobil has been active of oil, gas, and minerals, with the goal of in the multistakeholder committee working We provide assistance to our newest partners greater accountability by governments on to implement the EITI process in Equatorial as they seek to implement greater transpar- how they spend revenues. Guinea. As part of that effort, Equatorial ency. At the same time, we recognize that Guinea EITI published its first revenue report We support initiatives such as the Extractive transparency initiatives can only be sustainable in 2010. However, Equatorial Guinea did not Industries Transparency Initiative (EITI), the when national governments have owner- complete its required validation within the Group of Eight (G-8) Transparency Initiative, ship and responsibility. In 2010, Iraq joined prescribed time period and was delisted by and the United Nations Convention Against EITI as a candidate country and ExxonMobil the EITI Board last year. 44 exxonmobil.com
Community Engagement and Human Rights
HIGHLIGHTS 95 2 75% pre-construction Voluntary Principles of private security surveys finalized in briefing sessions personnel contracts Papua New Guinea conducted with security enhanced to include forces in Nigeria provisions to address human rights concerns
Performance Overview
What we said in 2009 What we did in 2010 What we plan to do continue deployment of security and continued to provide security and assess company policies and processes human rights training to appropriate staff human rights training in priority countries relative to U.N. Special Representative further implement our Framework on distributed security and human rights Ruggie’s final report Security and Human Rights through self- materials through regular, systematic complete human rights training in assessments and other processes communications priority countries and assess follow-up engage in international dialogues such participated in several social and needs for those who received training in as the Voluntary Principles on Security human rights conferences and working the last three years and Human Rights, the Fund for Peace, groups, as well as consultations with U.N. develop a computer-based human and consultations with John Ruggie, Special Representative Ruggie rights training module for efficient, wider United Nations Special Representative on evaluated upstream socioeconomic availability Business and Human Rights management processes and began con- update the Upstream Socioeconomic continue to integrate human rights con- solidating for consistency Management Standard cerns into existing business operations conducted an in-depth assessment of Framework implementation in Papua New Guinea 2010 Corporate Citizenship Report 45
ExxonMobil’s community relationships are an essential element of our global business. The quality of the relationships we develop with local communities has a direct impact on the long-term success of our activities.
Community impacts and contractors, partners, and employees to The Papua New Guinea liquefied natural gas better execute upstream projects consistently (PNG LNG) project area comprises a rich relationships with our company values and, as such, help and diverse cultural mix of some 13 ethnic Our approach to managing local community us maintain our license to operate. groups, 46 language groups, and more than impacts consists of several core elements, Impact assessment and mitigation. We 400 clans. Most of these communities rely including adhering to corporate policies and recognize our activities can impact host primarily on subsistence-oriented produc- expectations (see page 22), applying national communities and other stakeholders. We tion, maintain a close physical and spiritual laws and universally recognized principles, strive to identify and avoid or mitigate relationship to ancestral territories, consider assessing risks and opportunities, engaging negative impacts and enhance positive themselves as distinct lingo-cultural groups, with external groups (see page 8), and build- outcomes. At the start of major projects, an and retain customary social and political insti- ing local economic capacity (see page 39). Environmental, Socioeconomic, and Health tutions. The unique cultural heritage of these At ExxonMobil, we call this socioeconomic Impact Assessment (ESHIA) is conducted to groups needs to be preserved for the benefit management. This area encompasses assess the potential impacts of our activi- of current and future generations. several distinct topics, including human ties throughout the project and operations rights, labor and workplace rights, economic As part of the PNG LNG project’s pre-con- life cycle. We consult with the public during development, cultural heritage, land use, struction surveys, cultural heritage specialists the ESHIA process and integrate results into social and environmental considerations, conduct detailed studies in consultation with decision making, including impact avoidance treatment of communities and indigenous communities to identify areas and features of and mitigation plans, and in some cases, peoples, security, and relationships with cultural and historic significance. This impor- modifying aspects of the project design or host-country governments. tant phase of activity is conducted before execution plan. approval being granted for project access For major upstream projects, the ExxonMobil to potential worksites. In some cases, the Development Company applies its Upstream Consultation and engagement project facilities were re-designed to avoid Socioeconomic Management Standard. Wherever ExxonMobil operates, we work features. To date, pre-construction surveys As project teams apply our Operations with stakeholders through consultation and and reports have been finalized for 95 sites, Integrity Management System, the Standard act with respect toward individuals with and third-party experts have identified more provides guidance specific to key socioeco- diverse cultures. than 1400 mitigation measures. nomic issues that should be identified and addressed throughout the upstream resource Our Best Practices in External Affairs (BPEA) Once a site is approved and access granted, development life cycle, including: initiative focuses on building positive external pre-construction surveys are again conducted relationships and is integrated with our before work is allowed to commence on-site. • Consultation with relevant communi- Operations Integrity Management System These surveys involve assessing each work- ties, government officials, and appropriate (see page 18). BPEA is our strategic planning site, often with landowners, to further identify stakeholder organizations to share infor- and management tool for external affairs, sites of significance such as burial grounds, mation, solicit feedback, and respond to which ensures implementation of consistent sacred waterways, or areas containing expressed concerns; community awareness programs, including artifacts. In populated areas, surveys include • Identification of potential issues includ- information provision, dialogue, and collabo- discussions with local people who are knowl- ing, but not limited to, the management of ration with local communities. edgeable of the area. For known sites, the cultural and heritage properties, interaction focus of the Cultural Heritage Management with indigenous or vulnerable populations, We believe engagement is a two-way com- Plan is twofold: to avoid those sites which involuntary resettlement, compensation, munication and recognize the need for local are to be protected from disturbance, and to employment and training, and the procure- populations to be able to voice and resolve establish the process for the compensation, ment of goods and services; and, concerns related to a project without fear of management, clearance, and salvage of sites retribution. Our Upstream Socioeconomic • Development of appropriate prevention that are authorized by the government for dis- Management Standard includes provisions (or enhancement), control, mitigation, and turbance. We work closely with the landowner for establishing a grievance mechanism monitoring strategies related to potential or clan to determine appropriate mitigation where appropriate. While our BPEA engage- socioeconomic impacts. measures, including customary ceremonies. ments provide an important means to hear In 2010, the upstream companies formed a and address community concerns, griev- In addition to known cultural heritage sites, socioeconomics task force to assess current ance mechanisms provide a systematic and construction activities can disturb or alter processes for planning and implementing transparent process for local people to raise unrecorded archaeological finds within the socioeconomic management programs in concerns, which can be addressed by the project work area. The project has agreed on new ventures. The task force developed company within an appropriate time frame. a protocol for managing the preservation and recommendations to standardize and inte- appropriate treatment of these finds with the grate approaches, tools, and organization Indigenous peoples and cultural heritage. Papua New Guinea National Museum and Art into existing business systems. One outcome We value cultural heritage and customs in Gallery. The protocol deems that, following was the decision to include Socioeconomic the communities where we operate and analysis and documentation, any material Principles to guide our approach in several incorporate these considerations into found is transferred to the gallery. social areas. We believe further refinement project planning, design, execution, and of the Management Standard will help our ongoing operations. 46 exxonmobil.com
section, ExxonMobil’s approach is consistent with the basic components of this frame- work. We look forward to reviewing Professor Ruggie’s final recommendations in 2011 that offer further guidance on how corporations can put the framework into practice.
Labor policies and practices. Our com- mitment to human rights is supported by the policies in our Standards of Business Conduct, which are consistent with the spirit and intent of the United Nations Universal Declaration of Human Rights and the 1998 Declaration on Fundamental Principles and Rights at Work of the International Labor Organization (ILO). In Papua New Guinea, we are responding to community members’ requests to build a new walking path Our Statement on Labor and the Workplace when our operations overlapped with an existing path. articulates our support for the principles of the ILO Declaration, namely the elimination Land use and resettlement. We respect For project-affected households, a non- of child labor, forced labor, and workplace property rights in the countries in which we profit Papua New Guinean law practice acts discrimination, and the recognition of the operate. We strive to achieve free, prior, and as an independent advisor with respect to right to freedom of association and collec- informed consultation of impacted communi- their rights, responsibilities, and options tive bargaining. All employees are required to ties before we implement new operations. concerning resettlement in the context of comply with our policies. We seek to avoid resettlement through both national Papua New Guinean legisla- project design, and where resettlement is tion and the project’s plans and provisions. We seek business partners that observe unavoidable, we seek to ensure appropriate This assists households to better under- similar standards. Our standard contract restoration of livelihoods of displaced persons. stand the resettlement process, particularly language requires adherence to all national the valuation, compensation, and assistance laws and regulations. We prescreen suppliers As a result of the PNG LNG project, we are options. The resettlement process also and mandate compliance with all applicable currently engaging in resettlement activi- has a strong monitoring and evaluation laws regarding business practices and human ties. Resettlement may be necessary due to component to achieve the project’s goal of rights. All requests for quotations include physical or economic displacement, involving livelihood restoration. clauses relating to the prohibition of forced the loss of shelter, assets, income streams, or child labor and the payment of wages in or means of livelihood resulting from land A total of 13 project locations were identified accordance with all local laws. acquisition or obstructed access to economic where resettlement is deemed to be necessary. resources (land, water, and forest). The Providing human rights training. Our PNG LNG project has made efforts to avoid Respecting human rights human rights training is based on resettlement activities wherever possible. ExxonMobil guidelines, practices, and We respect human rights in our operations, However, when necessary, resettlement priorities, and is informed by guidance not just because doing so fosters a stable activities are conducted in accordance from the International Petroleum Industry business environment, but more importantly, with international best practice, as defined Environmental Conservation Association because it is the right and responsible thing by the International Finance Corporation and other sources. Training materials are to do. Performance Standards on Social and periodically updated to reflect new develop- Environmental Sustainability and the laws of We continue to participate in the consultation ments in the human rights arena as well as Papua New Guinea. The project’s goal for process outlined by John Ruggie, the United to incorporate feedback from trainees. resettlement is to give displaced people the Nations Special Representative on Business The training focuses primarily on employee opportunity to, at a minimum, restore their and Human Rights. Professor Ruggie’s 2008 awareness, company policies and approaches, livelihoods and standards of living. report set forth a widely accepted policy framework for managing business and human company resources, and our commitment For communities where resettlement is rights challenges based on distinct yet to respecting human rights. Each session deemed to be necessary, Resettlement complementary responsibilities for govern- also includes information on the Voluntary Action Plans were developed based on local ments and corporations as well as effective Principles on Security and Human Rights, needs and circumstances, and in consultation remedies in cases of abuse. the requirements of our Framework on with affected people. Customary land owner- Security and Human Rights, and the status of The “protect, respect, remedy” framework ship is perhaps the single most important implementation of the Framework in the given outlines the duty of governments to protect feature of Papua New Guinean society. The country. Human rights and security training against human rights abuses by third parties, complex portfolio of land rights defines social has been completed in 16 countries over the the corporate responsibility to respect human identity, group membership, and access to past three years. rights, and the need for improved access to resources such as forest, power, and ritual effective remedy mechanisms. Under this In 2010, we continued to provide dedicated status. This unique social organization pres- framework, the corporate responsibility to human rights training to key affiliates and ents some challenges with resettlement and respect human rights involves due diligence, staff, including lead country managers often requires a case-by-case approach. having policies in place, conducting impact (LCMs). Human rights is a recurring compo- assessments, and establishing mechanisms nent in both quarterly LCM communications to track performance. As discussed in this 2010 Corporate Citizenship Report 47 and new LCM training. Following an initial three-year implementation period, we have nearly completed training sessions in all priority countries identified on the basis of a variety of criteria, including the specific level of security threat, acute and dynamic issues, and external nongovernmental organiza- tion (NGO) ratings. We are now assessing progress in each of the countries to deter- mine follow-up actions. Training will also be provided on a wider spectrum to employees via a computer-based training module or other means.
Addressing security concerns ExxonMobil is committed to safeguard- Employee training is an important element of our effort to address human rights challenges facing our industry ing company personnel and property in and specific operations. a manner that respects human rights and fundamental freedoms. to addressing security concerns in Papua Framework on Security and Human Rights. New Guinea, and reinforced the integration Since 2002, we have been an active partici- of these issues. pant in the Voluntary Principles on Security Police deployed in support of the project and Human Rights, a forum for discussion have undergone training in the Principles by and information-sharing among extractive trainers approved by the International Red industry companies, governments, and Cross. Complaints will be fully reported in NGOs. To help implement the Principles, accordance with the executed memoran- ExxonMobil’s Framework on Security and dum of understanding and the Principles. Human Rights provides expectations for Investigations will be led by the Royal our majority-owned operating affiliates. The Papua New Guinea Constabulary Internal Framework includes guidance on working Investigation Unit with oversight from the with host government security personnel, Papua New Guinea government ombudsman. memoranda of understanding regarding host government-assigned security person- On the Web: nel, approaches for interacting with private Human rights policies and practices security providers, and reporting and record- exxonmobil.com/humanrights keeping templates. Currently, 75 percent of our private security personnel contracts Papua New Guinea liquefied natural gas project have been enhanced to include provisions to pnglng.com address human rights concerns.
Human rights is a priority in our Nigerian operations. There have been security chal- lenges and increasing tension in oil production communities in the country. To ensure the safety of our personnel and the communities around our operations, we actively advocate respect for human rights by government secu- rity personnel, as well as by private security providers who secure our assets. In 2010, our security team organized two briefing sessions on the Principles for host government security forces assigned by the Nigerian government to our facilities. Similar training will be con- ducted in 2011 as well.
In Papua New Guinea, our project team works closely with contractors and the com- munity on security issues. Project security challenges are systematically addressed in accordance with the Security Plan, which is regularly monitored and reviewed. A Security and Community Affairs workshop, held in mid-2010, provided valuable insight to all parties for maintaining a consistent approach 48 exxonmobil.com
IPIECA/GRI Content Index Our corporate citizenship reporting was guided by the International Petroleum Industry Environmental Conservation Association/American Petroleum Institute (IPIECA/API) Oil and Gas Industry Guidance on Voluntary Sustainability Reporting (April 2005). This report also cross- references the Global Reporting Initiative (GRI) G3 Sustainability Reporting Guidelines. These standards can be downloaded at ipieca.org and globalreporting.org.
Reporting Overview IPIECA /API GRI Where Reported 2.1, 2.3, 2.4, 2.6, 2.9, 3.1, 3.3-3.9, 3.11, Inside cover, 48, inside back About this report and assurance 3.12, 3.13, 4.13 cover, back cover Letter from the Chairman and CEO 1.1 2-3 About ExxonMobil 2.2, 2.3, 2.5, 2.7, 2.9 4-5 Sustainability 1.2 5 The Outlook for Energy: A View to 2030 1.2, EC2 6-7 Engagement SOC8, SOCA5 2.8, 3.2, 4.4, 4.14-4.17, EC6, EN26, SO1 8-9 ECO1, ECO2, ECOA2, ECO3, ENV1, 2.8, 3.10, 3.11, DMA-EC, EC1, EN3, Performance data ENV2, ENVA3, ENV3, ENV4, ENVA6, EN4, EN16, EN20, EN22, EN23, EN30, 10-11 H&S4, SOC3, SOC9, SOCA4 LA1, LA7, HR2, SO6
Citizenship Focus Areas IPIECA /API GRI Where Reported Safety, Health, and the Workplace Safety, security, and health management H&S1, H&S2, H&S4 4.8, DMA-LA, LA7 12-14 Employee health H&S3 LA8 15-16 Product stewardship and product safety H&S5 4.11, 4.12, DMA-PR, PR1, PR3 15-16 Employment policies and practices ECOA2, SOC4 DMA-LA, LA1, LA3, LA12, LA13, EC3 16-17 Case study: Operations Integrity Management System ENV6, H&S1 4.8, 4.11 18-19 Corporate Governance Board of Directors 4.1-4.5, 4.7, 4.9, 4.10, 4.16, 4.17, LA13 20-21 Ethics SOC2, SOC6 DMA-EC, HR2, SO3, SO4 22-23 Management systems ENV6, H&S1 4.8, 4.11, 4.12 23 Political involvement SOC3, SOCA1 SO5, SO6 23 Environmental Performance Managing to reduce environmental impacts ENV6 4.8, DMA-EN 24-25 Assessing our surroundings ENVA9 DMA-EN, EN13, EN14, SO1 25-26 Designing our facilities and operations ENV6 4.8, DMA-EN 25-26 2.10, 4.8, EN8, EN20, EN22, EN23, Operating with integrity ENV1, ENVA3, ENVA5, ENVA6, ENVA7 26-29 EN26, EN28, EN30 Restoring the environment EC6, EN13 29 Case study: Natural gas 4.17, EN26 30-31 Managing Climate Change Risks Mitigating operational greenhouse gas emissions ENV3, ENV4, ENV5, ENVA8 2.10, 3.9, EN5, EN7, EN16, EN18 32-35 Improving customer efficiency EN6, EN18, EN26 35-36 Investing in long-term scientific research ENVA8 EN6, EN18, EN26 36-37 Public policy debate SOCA1 1.2, EC2, SO5 37 Economic Development National content SOC8, SOCA5 4.8, DMA-SO, EC9 38-40 Workforce development SOC5, SOCA3 EC7, LA10, LA11 39-40 Supplier development SOCA5 EC6 40-41 Strategic community investments SOCA4, SOCA5 EC1, EC8, EC9, LA8 40-43 Employee volunteerism and giving EC1, EC8 43 Promoting revenue transparency ECOA1 4.12, 4.13 43 Community Engagement and Human Rights Community impacts and relationships SOC8, SOCA6, SOCA7 4.8, DMA-SO, SO1 44-45 Consultation and engagement SOCA6, SOCA7 SO1 45-46 4.8, 4.12, 4.13, DMA-HR, HR2, HR3, Respecting human rights SOC1, SOC7 46-47 HR5, HR6, HR7 Addressing security concerns SOC9 4.8, 4.12, 4.13, HR2, HR8 47
DMA: Disclosure on Management Approach. GRI indicators in italics are partially reported. Indicators not in italics are fully reported, but may not be fully reported in individual sections of this report.
Environmental Resources Management, Inc. (ERM) reviewed ExxonMobil’s 2010 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) G3 Sustainability Reporting Guidelines. ERM found that the report contents address the indicators shown in this index. ASSURANCE STATEMENT
Scope of the Assurance. Lloyd’s Register These reviews comprised: corporate reporting obligations and are Quality Assurance, Inc. (LRQA) was com- • A review of the reported information included in corporate safety, health, and missioned by Exxon Mobil Corporation to confirm the inclusion of all core safety, environmental reporting; (ExxonMobil) to assure the reporting health and environmental performance • The methods used for calculating processes used in the creation of the indicators referenced in the IPIECA/ each metric are clearly defined and ExxonMobil 2010 Corporate Citizenship API Guidance; communicated; Report (“the Report”). The objectives of • A review of the documented report- • Data collection begins at the operating- the assurance engagement were to verify ing requirements against the applicable site level and is ultimately collated and the integrity of the processes used for industry guidelines to assure consistency combined into Corporation-wide metrics; determining material issues and for report- of scope, definition, and reporting for each • Processes are in place to ensure that ing, and to evaluate consistency with the of the relevant indicators; the quantitative indicators are checked for following industry guidelines: • A review of the reporting processes at completeness, consistency, and accuracy; • IPIECA/API, Oil and Gas Industry Headquarters and at each of the functional • Responsibility for annually reviewing and Guidance on Voluntary Sustainability business levels to evaluate the processes updating reporting guidelines is clear and Reporting (April 2005); and, used by ExxonMobil to assure completeness, improvement in methodology is regularly • API, Compendium of Greenhouse Gas consistency, and conformance to reporting undertaken; Emission Estimation Methodologies for requirements across its global operations; • Guidelines for greenhouse gas emissions the Oil and Gas Industry (February 2004). • Reviews of the data-reporting processes reporting are consistent with, and specifi- The LRQA scope of assurance was at a sample of 11 selected operating sites cally refer to, the API Compendium for GHG limited to processes for the reporting of to assess local understanding and imple- Emissions Methodologies for the Oil and safety, health, and environmental core mentation of reporting requirements. Sites Gas Industry (February 2004); IPIECA performance indicators and include refineries in Slagen, Norway and • Active engagement with external stake- ExxonMobil-selected additional indica- Sriracha, Thailand; Australia Upstream; holders provides feedback for determining tors. Verification of the accuracy of data lubricant facilities in Paulsboro, New Jersey; material issues; and and information was not included in the Uddevalla, Sweden; Ulsan, Korea; Comma, • LRQA believes the ExxonMobil report- review scope. ExxonMobil has prepared England; Asher, Egypt and Alexandria, ing system is effective in delivering safety, and approved the Report and fully Egypt; a films plant in La Grange, Georgia health, and environmental indicators that acknowledges its sole responsibility for and a chemical plant in Beaumont, Texas; the accuracy of all data and information are useful for assessing corporate perfor- • A Headquarters review of the stake- mance and reporting information consistent contained within it. LRQA has reviewed holder engagement process; and, ExxonMobil’s reporting processes since with IPIECA/API Guidance. • A review of the processes used to 2005 (for the 2004 CCR). Observations and areas for potential aggregate the data and information at the improvement are provided in a report to Approach. The assurance engagement corporate level for inclusion in the Report. was based on interviews with key person- ExxonMobil Management. These observa- Conclusions and findings. Based on the nel to identify the processes in place to tions do not affect our conclusions. scope of the LRQA assurance engagement fulfill the core IPIECA indicators followed and the data and information presented for by reviews of the processes for collecting, review, objective evidence was available to compiling, and reporting these indicators support the following conclusions at a high at the corporate, functional-business, and level of assurance: Andrea M. Bockrath operating-unit levels. • Processes are in place that ensure On behalf of Lloyd’s Register Quality sites contributing to core safety, health, Assurance, Inc. and environmental metrics understand 8 April 2011
Third party liability. LRQA, its affiliates and subsidiaries and their respective officers, employees or agents are, individually and collectively, referred to in this clause as the ‘Lloyd’s Register Group’. The Lloyd’s Register Group assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever provided, unless that person has signed a contract with the relevant Lloyd’s Register Group entity for the provision of this information or advice and in that case any responsibility or liability is exclusively on the terms and conditions set out in that contract. LRQA’s Competence and Independence. LRQA ensures the selection of appropriately qualified individuals based on a rigorous appraisal of their training, qualifications, and experience. The team conducting the assurance of the Report was multidisciplinary and has been involved in assurance assessments from the outset of external verification of nonfinancial performance reports. LRQA’s internal systems have been designed to manage and review assurance and certification assessments. This involves independent review by senior management of the outcome derived from the process applied to the assurance of corporate reports. Independence of LRQA from ExxonMobil. LRQA and ExxonMobil operate as discrete and independent legal entities. LRQA provides ExxonMobil with third-party attes- tation assessment services to ISO 14001 and OHSAS 18001. The assurance and attestation assessment services are the only work undertaken by LRQA for ExxonMobil. Conflict of interest.LRQA is part of the Lloyd’s Register Group of entities. Lloyd’s Register Group entities recognize that potential conflicts of interest may exist that could impact on their independent assurance and certification activities. Lloyd’s Register Group entities are committed to identifying and managing such conflicts so that they do not adversely impact their independence and impartiality. To protect the integrity, neither LRQA nor any other Lloyd’s Register Group entity will provide services that create a conflict and compromise the independence and impartiality of third-party assurance and certification. The Lloyd’s Register Group entities will never verify their own solutions to a customer’s problem. Corporate Headquarters 5959 Las Colinas Blvd. Irving, Texas 75039-2298 exxonmobil.com
Note: Exxon Mobil Corporation has numerous affiliates, with many names that include ExxonMobil, Exxon, Mobil, and Esso. For convenience and simplicity, those terms and terms such as Corporation, company, our, we, and its are sometimes used as abbreviated references to specific affiliates or affiliate groups.
ExxonMobil is a publicly traded company. The New York Stock Exchange (NYSE) is the principal exchange on which Exxon Mobil Corporation common stock (symbol XOM) is traded. Worldwide, ExxonMobil markets fuels and lubricants under three brands.
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