ExxonMobil: Is Chasing Net Zero Futile

The case is set in September 2023, and talks about the energy transition of the oil and gas industry in context to ExxonMobil (Exxon), which has seen continued backlash from media and climate activists on its stance on climate change, strategies towards pivoting its core business towards more sustainable practices and moving away from fossil fuel energy that contributes significantly to global warming. While many oil and gas companies have increasingly opted to investing in renewable forms of energy, Exxon has instead focussed on investing in carbon capture and storage (CCS) technology, and other alternate forms of energy like hydrogen and biofuels. Exxon had also introduced Net Zero pledges, but industry analysts continued to question the company’s stance and strategies and its persistent focus on oil and gas.

Was chasing Net Zero the right strategy for Exxon moving forward? Given its predominant involvement in oil and natural gas, was it strategic to persist in prioritising oil demand alongside lower emission initiatives and transition investments? Was its existing strategy sufficient to help the conglomerate reinvent itself in a competitive and rapidly changing energy market?

The case helps students understand: (1) how large oil and gas companies are strategising in the face of global energy transitions; (2) Adaptation strategies of a large company in a transitioning market to stay competitive and responsive to market shifts (3) How sustainability and climate change considerations impact the strategic resilience of oil and gas companies (4) Investigate challenges and opportunities associated with adopting Net Zero goals (5) strategic significance of CCS technology in the oil and gas industry, with a focus on its role in emission reduction and its impact on long-term business sustainability.

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