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Meeting global needs - managing climate change business risks | ExxonMobil Page 4 of 6
profitability across a wide variety of economic conditions. Capital plans
and our asset portfolio are reviewed extensively with ExxonMobil's senior
management and the Board of Directors each year. The company's
energy and environmental perspectives, including those relating to
climate, are also reviewed with the Board annually to help the directors
understand financial and other risks associated with the corporation's
investments.
Projects are evaluated under a wide range of possible economic
conditions and commodity prices that are reasonably likely to occur, and
we expect them to deliver competitive returns through the business
cycles. We apply prudent and substantial safety margins in our planning
assumptions to help ensure robust returns.
The company also stress tests its oil and natural gas capital investment
opportunities, providing a further margin of safety against uncertainties,
such as those related to technologies, costs, geopolitics, availability of
required materials, services, and labor, etc. Stress testing provides us an
opportunity to fully consider different economic scenarios in our planning
an investment process. The Outlook for Energy \s reviewed annually, and
updated to reflect changes in views and circumstances, including
advances in technology and changes in government policies.
Financial risk
We use a simple cost of carbon as a proxy mechanism to help model the
potential impacts of a broad mosaic of future GHG policies. For example,
in most OECD nations, we assume an implied cost of C02 emissions that
App. 401
http;//corporate.exxonmobil.com/en/current-issues/climate-policy/climate-perspectives/man... 8/1/2016