Critical Analysis of Exxon Mobil’s Ethics, Governance and Corporate Social Responsibility (CSR)


This report critically evaluates and analyses ethical performance, corporate social responsibility, leadership, and governance practices of ExxonMobil. Formed by the merger of Exxon and Mobil in 1999, ExxonMobil deals in exploration, transportation and sale of crude oil, chemicals, and natural gas. US-based oil and gas major ExxonMobil is one of the biggest companies in the petroleum sector in terms of revenue, having reached $ 256 billion in 2019 (ExxonMobil, 2019). The company ranks 11 in Forbes global 2000 rankings and earned a profit of over $ 20 billion in 2019 (Wald, 2019).

Exploration of oil and gas in the Middle East in the early 20th century transformed industries throughout the world (Alfred, 2008). Excessive usage of fossil fuels resulted in the massive omission of greenhouse gases into the atmosphere, which resulted in global warming (Client Earth, 2020). Increase in temperatures forced governments to introduce laws to deal with global warming, and in 2016, 195 countries signed the Paris agreement to limit global warming below 2°C (European Commission, 2016).

Take help for your assignment

Whenever you are in a need of help for your assignment, essay or report, we are here to assist you

These regulations have forced businesses to move from conventional sources of energy, i.e. fossil fuels to less polluted and renewable energy sources such as solar energy, wind power and hydropower. This shift has forced investors to divest their stocks from oil and gas companies (Meyer, 2020). Exxon, like other companies in the sector, is also facing this challenge. CEO Darren Woods stated that “We think about this on a global scale. Individual companies hitting targets and then selling assets to another company so that their portfolio has a different carbon intensity has not solved the problem for the world. It has not made a dent in it. And in some cases, if you are moving to a less effective operator, you’ve actually made the problem worse” (Meyer, 2020).

ExxonMobil is the 2nd biggest investors-owned company which contributed 41.9 billion carbon equivalents into the environment since 1965. It ranks 4th in the list of companies to have omitted the highest number of carbon equivalents into the atmosphere (The Guardian, 2019). ExxonMobil has been surrounded by multiple accusations of unethical business practices over the years. In 2017, ExxonMobil paid a penalty of $2.5 million to the federal government and several US states in settlement of offences relating to air pollution. Moreover, it agreed to build new infrastructure to monitor air pollution caused by its operations at the cost of $300 million (Reuters, 2017). In another misconduct, US federal judge ordered ExxonMobil to pay a fine of $19.95 million, which was imposed due to air pollution caused by Exxon`s Baytown facility. This facility was charged a penalty of $1.4 million by the local regulator earlier as well as the Baytown plant is said to have omitted 4.5 million kilograms of pollutants into air (Reuters, 2017).

With ExxonMobil being the major producer of carbon footprints and source of air pollution, the company will be ethically evaluated through stakeholder theory to identify who Exxon is liable to. Further, the organization will also be assessed through corporate social responsibility theory to determine its accountability and obligations within the environment it operates.

Exxon`s Stakeholder Management

Decisions taken by any organization can be best understood by the stakeholder theory. The traditional theory focuses on shareholders and believes that a manager is answerable to its shareholders. Freeman (2010) stated a more versatile approach with multiple stakeholders. Freeman describes stakeholders as “any group or individual who can affect or is affected by the achievement of the organization objectives.” This definition of stakeholder theory divides them into primary and secondary stakeholders. Primary stakeholders being those who can directly impact an organization while secondary stakeholders are those affected or influenced by activities of an organization.

Both the primary and secondary stakeholders are critical in analyzing the ethical performance of ExxonMobil because they are largely affected by the activities of the company and have an equal ability to influence the organization. Considering Freeman’s stakeholder approach, in the case of ExxonMobil, the primary stakeholder is the natural environment and communities, i.e. the general public which has been affected by air omissions and operational impact of Exxon’s activities. Exxon has termed the environment and communities as key stakeholders in its sustainability report of 2018 (ExxonMobil, 2018). By law, it is an organization’s responsibility to respect the rights of its stakeholders. Exxon’s ethical performance concerning environmental conservation and reducing the impact of its activities on communities can be analyzed in the following manner.

Critical evaluation of Exxon’s Ethical Performance

Utilitarian approach

Jeremy Bentham and John Stuart Mill developed the theory of utilitarianism which states that an action is right if it produces happiness for everyone involved and wrong if it is harmful to those affected by it (Mulgan, 2014). Utilitarianism seeks to gain the greatest good for the highest number (Mulgan, 2014). In the context of Exxon, the organization produces happiness for human beings by fulfilling their energy needs. It is due to the vast exploration of oil and gas that people are now able to travel long distances within hours which previously took weeks. Moreover, due to the exploration of oil and gas, people in cold regions now have access to warm homes all the time. Also, there are more industries now than ever before, and people are getting employed, none of this would have been possible without power that energy companies provide (Atlantic Canada Offshore, 2020).

Utilitarianism views the actions of an organization in the face of the consequences it brings. Therefore, it can be argued that the exploration of oil in African countries by ExxonMobil brings new streams of revenue to the states (African Business Magazine, 2019). It will make governments strong financially, and African nations may finally have the chance to turn their economies, thus bringing the greatest good to the vastly poor and underdeveloped region. Moreover, exploration of new resources with huge potential will make Exxon more profitable than ever before, perhaps achieving wealth maximization of shareholders (Porreto, 2008). Exxon has been part of an international group of geophysical oil and gas companies which in aggregate have contributed $55 million to search the impact of noise on marine life, mammals in specific (ExxonMobil, 2018).

However, other than the benefits that Exxon has derived for the society and community, the company has also brought several harms. Political Economy Research Institute, an independent unit of the University of Massachusetts Amherst, has ranked the organization #17 among U.S. water polluters and the company is expected to have released 3 million pounds of toxic components onto water surfaces (PERI, 2016). Nevertheless, although the company has since improved and ranks #22 according to the latest report, massive improvement is needed for the company to become environmentally viable. In another report published in journal Climatic Change, Exxon is declared responsible for 3.22% fossil fuel emissions worldwide (Heede, 2014).

Under the utilitarian theory, Exxon is not making enough efforts to meet its ethical obligation of the greatest good for all. Despite the enormous benefits that Exxon provides to stakeholders, the environment is suffering badly from its activities (Crowley & Rathi, 2020). Hence, it can be inferred that in the case of Exxon, the greatest harm is larger than the greatest good the company provides.

Deontological theory

ExxonMobil`s ethical performance can also be judged in another way, i.e. Kant theory of deontological ethics which is the opposite of utilitarianism. Immanuel Kant, a German philosopher, presented his theory of ethics in which he argued that duties performed by an organization are the basis of ethics regardless of the outcomes or consequences it brings (Robinson & Dowson, 2012). The theory states that an action is morally acceptable if some part or attributes of it are good and does not consider or discusses the consequences that action might bring (Britannica, 2020). Modern followers of Kantianism believe that stakeholders should have a say in matters of an organization and that they should have influence over decisions taken by the organization (Britannica, 2020). Exxon does allow its stakeholders some degree of power, which is evident by Exxon not issuing donations to organizations that downplay the environmental change and global warming risks (Heger, 2008). Exxon has also invested $10 billion since 2000 to research and develop technologies resulting in lower emission than ever (ExxonMobil, 2017). The organization has also pledged to donate $100 million over ten years to U.S. Department of Energy’s National Renewable Energy Laboratory and National Energy Technology Laboratory to develop lower-emission technologies on a large scale (ExxonMobil, 2017). The corporation is also working to grow sustainably in future, and its emission of volatile organic components like sulphur dioxide and nitrogen oxides has decreased by 14% over the last ten years (ExxonMobil, 2019).

In its attempt to mitigate climate change risks, ExxonMobil, in 2018, joined the Oil and Gas Climate Initiative (OGCI, 2018). This is a voluntary initiative taken by 13 largest oil and gas producers to develop methods which ensure sustained growth within the framework (OGCI, 2020). This initiative works to develop technologies for low gas emission. Moreover, the company has also joined the Climate Leadership Council (CLC), which aims to generate carbon fee with revenues returned to Americans (ExxonMobil, 2017).

In the context of the Kant theory, Exxon is working impressively to adhere to its ethical obligations. The company has shown serious commitments against climate change by partnering with other major companies of the industry. Exxon has ensured that the planet stays safe by investing in technologies which emit less pollution as well as the company has made sure investors stick to it by guaranteeing sustained growth.

Virtue ethics

Another way to examine Exxon’s ethical performance is by performing a virtue analysis. Virtue ethics theory stresses the actions of organization’s agents and believes that the right actions come from good people (Russell, 2010). Virtue ethics theorists believe that organizations should exist to provide a “good life” to all (Russell, 2010). In 1989, a ship carrying crude oil struck a reef, resulting in the release of 11 million tons of crude oil into the seawater. This was the biggest oil spill disaster in the US at that time, and as a result, sea life suffered heavily as 22 whales, 250,000 seabirds and 3,000 sea otters died among other species (Taylor, 2014). Oil spread 1,300 miles along the coast, and fishermen went bankrupt (Wilkins, 2019). Consequently, Exxon was accused of sluggishness in damage control works which exacerbated to a more significant incident. As a result of this, ExxonMobil paid fines of $125 million on criminal charges and $900 million on account of civil penalty (Taylor, 2014). All the charity and philanthropic work of Exxon does not wipe out the fact that Valdez oil spill incident heavily harmed natural habitat of underwater life and made people related to sea industry redundant. While it can be argued that Exxon has transformed people’s lives by providing uninterrupted energy resources and donating millions of dollars for the betterment of society, is it enough concerning the danger its activities produce? Does all the community work remove the harm, Exxon’s practices created for underwater species? Is it really providing a good life to everyone affected by its operations? Based on virtue ethics theory, Exxon has failed to provide a good life to those affected. The efforts made by Exxon are insignificant in comparison to the harm caused by it.

Corporate social responsibility

Howard Bowen, an American economist, is considered as the father of the concept of corporate social responsibility. He coined the term for the first time in his book “social responsibilities of a businessman” in 1953 (Bowen, 2013). CSR is defined as self-determining framework according to which an organization is socially responsible. CSR is a tool to build an organization’s image, how is it viewed among its stakeholders, i.e. environmentalists and public. It demonstrates an organization’s performance in respect of the environment, social and economic performance, and the impact these activities have on internal and external stakeholder of the organization (Bowen, 2013). Major components of a company’s CSR are elements of accountability, transparency, responsibility and sustainability (Forbes, 2014). CSR has become extremely crucial that 80% of the top 250 companies include this report in their annual financial statement (Wenhao & Kaufman, 2011). Corporate social responsibilities fulfilled by an organization can be tested against Carroll pyramid which states that firms should endeavour to make a profit, comply with rules and regulation, become good corporate citizen, and participate in ethical practices (Carroll, 2001). Exxon’s CSR performance will be analyzed on these matrices.

Business organizations exist to make profits. Similarly, the motivation of people to invest in any organization is that the investment will derive significant returns, and they will be able to enjoy dividends (Greek Share, 2020). Carroll’s CSR pyramid firmly believes that organizations should strive to make profits, which is the first responsibility of any organization and is termed as “economic responsibility”. Exxon is working exceptionally well in its economic obligation towards its investors and shareholders. The company has paid dividends consecutively since 1882 (Reeves, 2020). Moreover, Exxon’s dividend payment to shareholders over the last 38 years has grown at a rate of 6.1% (ExxonMobil, 2020a). This extraordinary economic performance of the company has earned shareholders’ faith, and investors have their investments in Exxon. This has let the company grow over the decades, and investors have benefited mutually by generating massive returns. The economic might of Exxon is evident by the fact that the company has paid dividends even during the COVID-19 pandemic (ExxonMobil, 2020a). Based on Carroll’s economic duty of a company to its shareholders, Exxon is performing relatively well.

The second responsibility of an organization according to the Carroll pyramid is the compliance of the law. Companies are expected to respect the framework laid by regulators in areas of their operations (Carroll, 2016). ExxonMobil has been involved in various regulatory violations of laws over the years. In 2011, one of the Exxon’s pipelines in Montana ruptured resulting in release 40,000 gallons of crude oil into Yellowstone River. Regulators report indicated that Exxon was redundant in their damage control and fined the company $1 million (Brown, 2019). Moreover, in 2015, Exxon and state of New Jersey settled compensation of $225 million to be paid by Exxon due to contamination of wetlands, marshes and waters and damage to other natural resources (Weiser, 2015). ExxonMobil has failed to comply with safety regulations and has resulted in impairment of the environment.

Third duty in Carroll pyramid that an organization shall satisfy is that it should be ethical in its decisions and activities. This means that the operations of the firm shall be morally correct. The corporation shall plan considering the interest of all parties related to it, e.g. if activities of an organization are permitted by law but are ethically incorrect, then such activities shall not be carried out (Carroll, 2016). Adhering to its ethical responsibilities, Exxon has worked actively to reduce the impact of its operations on the environment by investing heavily in research of new technologies for low emission of carbon and greenhouse gases into the atmosphere (Exxon, 2020). Studies have shown that efforts made by Exxon for the conservation of ecosystems are not enough. CDP report in 2016 ranks Exxon second last among 11 major oil companies who are ready for a shift towards a green economy (Clark, 2016).

The fourth and final responsibility of an organization according to Carroll is philanthropic work. The organization should look after its employees, local communities and those affected by its activities. Carbon emissions and rupture of Exxon facilities has dented its efforts to preserve the environment, mainly marine life, and it can be argued that Exxon is not meeting philanthropic responsibilities of the pyramid. To overcome this situation, Exxon has started various initiatives. In 2018, Exxon contributed $211 million towards communities all over the world building schools and providing health facilities and supplying clean water resources (ExxonMobil, 2019). Moreover, ExxonMobil Foundation, a philanthropic unit of Exxon, carries out welfare work on behalf of the organization. More than 125 million people have been given malaria medication by this foundation in the last 20 years (ExxonMobil, 2020b). The foundation has invested $1.25 billion in STEM education in the 21st century and worked for women development in more than 90 countries (ExxonMobil, 2020b). Overall, the organization is making efforts to fulfil Carroll pyramid responsibilities, but more work needs to be done for Exxon to become a highly socially responsible organization.


Exxon has started to accept its responsibility for climate change by accepting the phenomenon of global warming. Exxon was accused of denying climate change and helping the firms advocating low impact of global warming, but the New York judge gave a verdict in favour of ExxonMobil (NY Times, 2019). With Exxon being major fossil fuel producer and emitter of greenhouse gases, it faces ethical issues over the safety of the planet. Exxon should adhere to its sustainability goals, and there are three ways it can be done.

Government legislation

Sustainable development is fulfilling the needs of the current generation without compromising the needs of future generation (Leal Filho et al., 2018). In 2015, all UN member states adopted sustainable development goals to be met by 2030 (UN, 2020). These goals apply uniformly all over the globe, and companies operating anywhere in the world must follow them (UN, 2020). The 17 goals adopted by UN call for an end to poverty, peace for everyone and environment conservation. 3 of the 17 SGD goals are related to environmental protection and preservation, which means this is an issue taken seriously by governing bodies (UN, 2020). Regulators shall make sure that companies are following these goals, and there is no fabrication in their disclosures. Exxon has shown its commitment to the application of these goals by the development of operations integrity management system, OIMS. This system warns about environmental impacts of Exxon operations and inherent risks related to the company’s activities.

Low carbon strategies

It is recommended that ExxonMobil should devise its strategies for low-carbon business models while remaining profitable at the same time. These models shall be appropriately communicated to the stakeholder as well as shareholders. Exxon should invest in technologies with net-zero emissions and use the concept of a circular economy to its competitive advantage. Circular economy utilizes waste products to make new, useful products, in and outside the industry (WRAP, 2020). By adopting the principles of the circular economy, resources will stay in the environment for a longer time, perhaps reducing the usage of unexplored resources (Sertin, 2020). Furthermore, it should endorse de-carbonization across the company and the oil and gas industry. ExxonMobil should also diversify its portfolio from oil, gas, and chemicals to electricity to become sustainable. Resources should be employed to make use of water produced because of drilling. Moreover, the organization should use resources for moving towards renewable forms of energy which are becoming highly popular among customers and are future of the power industry (C2ES, 2020).


ExxonMobil’s board of directors shall ensure that the company is abiding by these targets and future planning shall be made in consideration of these goals. New projects and initiatives must be taken after excessive research on the impact of Exxon activities on environmental and socioeconomic dynamics of the area. The company should devise environmental policy, and it must be strictly followed. Moreover, Exxon shall explore new ways of doing business which ensure that environmental security is not compromised. Short-term and long-term goals shall be set by the organization to move away from conservative sources of energy, i.e. crude oil which releases high carbon footprints to new and efficient sources of energy, i.e. cleaner-burning natural gas. Exxon should work actively to ensure the economy of products with low environmental impacts such as premium lubricants, lightweight materials, and special tire liners. The company should develop its ecological standards, which should be in line with international standards, and strictly follow them. An independent board shall be developed within the company, which shall oversee the impact of Exxon activities on the environment and shall report directly to the CEO. Moreover, Exxon should pursue technologies to enhance existing operations and develop alternative energy technologies with low carbon intensity. Exxon should make productive use of its status as big oil for philanthropic work rather than exploitation of resources and financial gains.


Based on the above discussion, it can be concluded that ExxonMobil has performed poorly in its ethical responsibilities. Effects of excessive emissions of methane and greenhouse emissions are more everlasting than benefits that provision of oil and gas to industries provide. However, by following the above-mentioned recommendations, the company can improve its ethical performance in order to become an environmentally sustainable organization.

Learn how can Essay Assignment Writing assist you

We are a team of professional assignment writers, essay experts, editors, proofreaders and tutors. We
can help you with all your projects, dissertations and reports. We guarantee a service that satisfies you


African Business Magazine. 2019. Opinion: Exxon Mobil’s investment in Mozambique gas project could solve Africa’s energy problems. [WWW Document] Available at: [Accessed 2 November 2020]

Alfred, R., 2008. 1908: Mideast Oil Discovered — There Will Be Blood. [WWW Document] Wired. Available at: [Accessed 28 October 2020]

Atlantic Canada Offshore. 2020. Benefits and Revenue from the Industry. [WWW Document] Available at:,generating%20and%20maintaining%20sustainable%20infrastructure. [Accessed 1 November 2020]

Bowen, H.R., 2013. Social Responsibilities of the Businessman. University of Iowa Press.

Britannica. 2020. Deontological ethics. [WWW Document] Available at:> [Accessed 1 November 2020]

Brown, M., 2019. Exxon agrees to $1 million penalty for Montana oil spill [WWW Document]. AP NEWS. Available at: [Accessed 31 October 2020]

Carroll, A., 2001. (PDF) The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders [WWW Document]. ResearchGate. URL (accessed 1.17.19).

Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International Journal of Corporate Social Responsibility 1, 3.

Clark, P. 2016. ExxonMobil and Chevron near bottom of league on ‘green’ strategy. [WWW Document] Financial Times. Available at: [Accessed 3 November 2020]

Client Earth, 2020. Fossil fuels and climate change: the facts. [WWW Document] Available at:,our%20atmosphere%2C%20causing%20global%20warming. [Accessed 28 October 2020]

C2ES, 2017. Renewable Energy [WWW Document]. Center for Climate and Energy Solutions. Available at: (accessed 11.14.20).

Crowley, K., Rathi, A., 2020. Exxon Plans to Increase Its Climate Pollution [WWW Document]. EcoWatch. Available at: [Accessed 30 October 2020]

European Commission., 2016. Paris Agreement. [WWW Document] Available at:,support%20them%20in%20their%20efforts. [Accessed 29 October 2020]

ExxonMobil. 2017. Sustainability report. [WWW Document] Available at: [Accessed 2 November 2020]

ExxonMobil., 2018. Worldwide Giving. [WWW Document] Available at: [Accessed 31 October 2020]

ExxonMobil, 2019. Summary Annual Report, [WWW Document] Available at: [Accessed 27 October 2020]

ExxonMobil, 2020a. Dividend information | ExxonMobil [WWW Document]. ExxonMobil. Available at: [Accessed 5 November 2020]

ExxonMobil, 2020b. Community investments [WWW Document]. ExxonMobil. Available at: [Accessed 2 November 2020]

Freeman, R., 2010. Stakeholder Theory: The State of the Art, Research Gate. Available at: [Accessed 31 October 2020]

Greek Share. 2020. What Motivates Investors? [WWW Document] Available at: [Accessed 2 November 2020]

Heede, R., 2014. Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 1854–2010. Climatic Change 122, 229–241.

Heger, M., 2008. ExxonMobil Cuts Back Its Funding for Climate Skeptics,. [WWW Document] Spectrum. Available at: [Accessed 5 November 2020]

Leal Filho, W., Azeiteiro, U., Alves, F., Pace, P., Mifsud, M., Brandli, L., Caeiro, S.S., Disterheft, A., 2018. Reinvigorating the sustainable development research agenda: the role of the sustainable development goals (SDG). International Journal of Sustainable Development & World Ecology 25, 131–142.

Lynch, S., 2017. Exxon Mobil, PDC Energy settle with U.S., states over air pollution claims, [WWW Document] Reuters. Available at: [Accessed 29 October 2020]

Meyer, G., 2020. ExxonMobil dismisses carbon targets as a ‘beauty’ match. [WWW Document] Financial Times. Available at: [Accessed 31 October 2020]

Mulgan, T., 2014. Understanding Utilitarianism. Routledge.

OGCI, 2020. OGCI | Oil & Gas Climate Initiative | A Catalyst for Change [WWW Document]. OGCI. Available at: [Accessed 6 November 2020]

OGCI, 2018. OGCI News | Chevron, ExxonMobil & Occidental Petroleum Join OGCI. OGCI. Available at: [Accessed 6 November 2020]

PERI. 2016. Toxic 100 Air Polluters Index. [WWW Document] Available at: [Accessed 1 November 2020]

Porreto, J., 2008. ExxonMobil sets annual profit record: $40.6B. [WWW Document] ABC News. Available at:,crude%20prices%20at%20year’s%20end [Accessed 4 November 2020]

Reeves, J., 2020. 13 dividend stocks that have paid investors for 100+ years [WWW Document]. Fidelity. Available at: [Accessed 5 November 2020]

Reuters. 2017. Judge says Exxon owes $19.95 million for Texas refinery pollution. [WWW Document] Available at: [Accessed 31 October 2020]

Robinson, S., Dowson, P., 2012. Business Ethics in Practice. Kogan Page.

Russell, D., 2010. Virtue ethics, happiness, and the good life. pp. 7–28.

Sertin, C., 2020. Closing the loop: Bringing the circular economy to the oil and gas sector [WWW Document]. Oil & Gas Middle East. Available at: [Accessed 3 November 2020]

Taylor, A., 2014. Remembering the Exxon Valdez Oil Spill. [WWW Document] The Atlantic. Available at: [Accessed 3 November 2020]

The Guardian., 2019. Revealed: the 20 firms behind a third of all carbon emissions. [WWW Document] Available at: [Accessed 30 October 2020]

UN. 2020. Take Action for the Sustainable Development Goals. [WWW Document] Available at: [Accessed 3 November 2020]

Wald, E., 2019. RDS Tops The List But Global Diversity Dominates World’s Largest Oil And Gas Companies In 2019, [WWW Document] Forbes. Available at: [Accessed 27 October 2020]

Weiser, B. 2015. New Jersey’s $225 Million Settlement With Exxon Mobil Is Approved. [WWW Document] NY Times. Available at: [Accessed 3 November 2020]

Wenhao, C., Kaufman, K., 2011. Corporate social responsibility in fortune magazine’s top 50 companies: State of action and salient trends. Afr. J. Bus. Manage. 5.

Wilkins, C., 2019. Exxon Valdez changed the oil industry forever—but new threats emerge. [WWW Document] National Geographic. Available at: [Accessed 3 November 2020]

WRAP. 2020. WRAP and the circular economy. [WWW Document] Available at:,end%20of%20each%20service%20life. [Accessed 5 November 2020]

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter
Share on linkedin
Share on Linkdin
Share on pinterest
Share on Pinterest