· 3 min read
illuminem summarises for you the essential news of the day. Read the full piece on Oil Price or enjoy below:
🗞️ Driving the news: ExxonMobil’s CEO, Darren Woods, has threatened to exit the European market unless the EU significantly relaxes its new Corporate Sustainability Due Diligence Directive (CSDDD)
• The directive, aimed at aligning companies with the EU’s net-zero goals by 2050, includes penalties for non-compliance on environmental and human rights issues, with fines potentially reaching 5% of a company’s annual global revenues
• ExxonMobil, along with other companies like QatarEnergy, has fiercely opposed the directive, citing its potential to harm business operations
🔭 The context: The CSDDD, adopted by the EU last year, introduces stringent sustainability requirements for large corporations, requiring them to mitigate their environmental and social impacts or face significant fines
• While the directive is part of the EU’s broader ambition to lead the global transition to net-zero emissions, major corporations, particularly in industries like oil and gas, have expressed concerns over the regulatory burden
• ExxonMobil’s opposition is particularly significant, as it highlights the tension between ambitious EU climate goals and the interests of major international corporations
🌍 Why it matters for the planet: ExxonMobil’s threat to leave Europe underscores the challenges of enforcing corporate responsibility in a globalized economy
• The EU's push for stricter sustainability rules could set a precedent for other regions, but also risks creating divisions between economic blocs
• While such regulations could drive corporate behavior towards more sustainable practices, the opposition from influential players like ExxonMobil suggests that the path to achieving ambitious climate goals may encounter significant resistance, especially from industries critical to fossil fuel-based economies
⏭️ What's next: The European Parliament has agreed to review the CSDDD, partly in response to lobbying from affected companies
• ExxonMobil continues to push for a rollback of the regulations as the outcome of the review could determine the future relationship between U.S. businesses and the EU, especially in terms of trade and climate policy
• The pressure on the EU to balance its climate goals with economic considerations will intensify as the review process unfolds
💬 One quote: “If we can't be a successful company in Europe, and more importantly, if they start to try to take their harmful legislation and enforce that all around the world where we do business, it becomes impossible to stay there.” — Darren Woods, CEO of ExxonMobil
📈 One stat: The CSDDD mandates that companies found non-compliant with its sustainability requirements could face fines of up to 5% of their annual global revenues.
See on illuminem's Data Hub™ the sustainability performance of ExxonMobil and its peers Shell, and Chevron
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