The oil giant should focus on value rather than investing money in expensive projects to build the very fossil fuel reserves that endanger its own – and the planet’s – survival
Exxon Mobil has been left pondering an age-old investment question – when to re-invest profits and when to return them to investors – after a shareholder proposal, which asks the company to return capital to shareholders rather than break ground on high-cost high-carbon projects in the face of global climate change, was filed by Arjuna Capital and As You Sow.
The answer boils down to where you can secure the greatest value. If companies invest in new projects for ever-lower returns, those investments are value destroying. At a certain point, companies must face the fact that they are as big as they are going to get they are no longer growth companies, but mature, value companies that pay steady dividends.