ESG ANALYSIS :

EXONN vs. ROSNEFT

Submitted by :-

Paresh Shrivastava
09806476021
 Global Oil Industry
An Overview
Oil prices have gone up and down rapidly
in past decade but low price is rule today
The price has risen and fallen with more or less equal
intensity over the past decade. The price in January
2001 was $35.88 per barrel, up from a low of $16.44 in
November 1998. After a modest rise in 2001, the price
dropped in early 2002, to $26.79. From March 2002 to
June 2008, oil prices maintained a prolonged, steady
upward rise to a record high of $151.72 per barrel in a
June 2008 price spike. This spike was short-lived,
though, and prices plummeted to $46.86 by January
2009. The price rose quickly over the course of the next
year, hitting a peak of $119.51 per barrel by April 2011.
Price spikes drives investments and can
shore up company’s balance sheet.
Oil companies rely on enhanced revenues derived from
price spikes to shore up their annual balance sheets—
improving net incomes, allowing for debt repayment,
providing potential for new capital investment, and
funding payments to shareholders.
Price-spike revenue can cover operational expenses but
also goes to investments in new production (physical
project add-ons and new research) and to payouts to
investors. Striking the right balance between these three
elements is the key to strong company management. Too
much capital investment, for example, will create
pressure to cancel future projects if prices rapidly decline.
Too much payout to investors can limit capital
expenditures. Operational expenses that aren’t tied to
productivity are wasteful and take dollars away from
capital expenditures and investor payouts.
Outlook can be tempered by political conflict,
Likelihood of coordination between producer
nations and demand
A healthy revenue flow for an oil company covers costs of
operations and new investment, and produces profits. Different
production plays have different cost structures, however. Each
play benefits and is punished as market prices rise and fall. For
example, Canadian Oil Sands projects require an oil price of
$98 per barrel because these projects rely on very expensive
extraction processes. Oil shale, on the other hand, produce oil
at a more competitive price of around $70 per barrel, and
various conventional onshore and offshore plays are profitable if
prices are in the $40-to $60-per-barrel range.
The current price of oil—around $50—renders significant
segments of the world’s oil investments unprofitable. The
obvious question, then, is where oil prices will be in the months
and years ahead. In the short term, through 2017, some
recovery is expected but prices will remain in the low $50-per-
barrel range. In the medium term, through 2020, the U.S.
Energy Information Administration, the World Bank5, and the
International Monetary Fund see prices rising to anywhere from
$57 per barrel to $71.12 per barrel.6 Other analyses project a
more robust price increase to $95.
The Oil Industry- Exxon and Rosneft
The oil industry dominated stock markets in the decades
after World War II, and by 1980 seven of the ten biggest
stocks in the S&P 500 were oil companies.
ExxonMobil has remained Rosneft is a leader in the
a stalwart ever since. It was Russian oil industry and the
the No. 1 company, by stock world’s largest oil company in
market capitalization, in the terms of the volume of reserves
Standard and Poor’s 500 and production
from 2006-2011. Today
ExxonMobil15 is the only oil
company in the S&P 500 top
10, where it is the third-
largest company.
 ESG Reporting – Need of
the hour
The changing dynamics ESG rating Methodology
In a recent report EY showed that investors are Companies operating in oil and gas industry are required
concerned about ESG (environmental, social and to do numerous disclosures in order to adhere to ESG
governance) issues, and take information about ESG into reporting. There are certain key parameters on which
account in making investment decisions. EY surveyed ESG reporting of a company can be evaluated. We have
over 320 institutional investors, one-third of which had shortlisted certain parameters which are relevant to oil
over $10 billion in assets under management, about the and gas industry on each of three factors i.e
importance of nonfinancial reporting, in particular, the role Environmental, Social and Governance. We will try to
ESG analysis plays in their investment decision-making. develop ESG Scores for two companies Exxon and
Looking at data over several years, EY found that there Rosneft by plotting these factors in the materiality matrix ,
was a global trend toward increased interest in assigning them weights based on its severity and scoring
nonfinancial information on the part of investment each factor for two companies according to the quality of
professionals as well as an enhanced focus on ESG disclosures by the company.
factors, albeit an informal one, in the investor decision- Environmental
making process. Analysing information over a three-year Engaging on climate change policy
period, EY concludes that ESG factors are now playing
an increasingly influential role in investment decision- Mitigating emissions
making. Interestingly, EY contended that ESG analysis Providing solutions for customers
has shifted over time from a primary focus on corporate Air emissions
governance issues to a now equal interest in Biodiversity and ecosystem services
environmental issues, particularly climate change
Decommissioning and rehabilitation of the environment
Environmental compliance
Environmental management approach
Spill performance
Water management
Developing technology solutions
Social
Personnel and process safety
Environmental Social Governance
Product safety and responsibility
Global demand for energy continues to expand as a result Product transportation safety
of population growth, rising living standards and increasing Workforce engagement
levels of urbanisation. Existing energy sources are ever Workplace security
more strained and significant investment will be required to
Worksite health and wellness
meet the needs of future generations.. There is need to
addresses these concerns through placing paramount Community relations
importance on the establishment of operating procedures External stakeholder engagement
that provide a safe and environmentally responsible Human rights
working environment, a zero-tolerance policy on
Indigenous peoples
corruption, and the promotion of positive engagement with
local communities and all other stakeholders. Over recent Local economic growth and development
decades, most oil and gas companies have developed and Supply chain management
embraced Environmental, Social and Governance (ESG) Employee benefits and practices
principles. These principles are not secondary but a central
commercial priority. Not only there is a utmost need to
promote such principles within every company to ensure
Corporate governance
good governance, safe working conditions and minimal
impact to the environment, we believe that ESG initiatives Board leadership
significantly reduce risk, create long-term value and are a Ethics and integrity
competitive advantage. Executive compensation and strategic advantage
Political advocacy and contributions
Shareholder relations
Transparency
 ESG Analysis –
Exxonmobil & Rosneft
Engaging on climate change policy
• Exxon recently joined the Climate Leadership Council as a
founding member. The council advocates for a revenue-neutral
carbon tax and aligns closely with longstanding principles of
company.
• Chairman and members of our management committee
have primary responsibility for managing climate change risks
for ExxonMobil and its operations
• ExxonMobil experts have participated in the United Nations
Intergovernmental Panel on Climate Change (IPCC) since its
Inception
• As an active IPIECA member, ExxonMobil engaged with
member companies in advance of the 2015 Conference of
Parties (COP) 21 meeting in Paris to develop a common
industry position on global efforts to address climate change
0 1 2 3 4 0
Mitigating emissions
• In 2016, ExxonMobil’s net equity greenhouse gas emissions
were 125 million CO2-equivalent metric tons. Relative to
2015 performance, 2016 emissions increased by
approximately 3 million CO2-equivalent metric tons.
• In 2016, greenhouse gas emissions avoided from
ExxonMobil actions were 19.0 million metric tons,
cumulative since 2007.
• They have Global Energy Management System in the
Downstream and Chemical businesses, and our Production
Operations Energy Management System in our Upstream
businesses to identify and act on energy savings
opportunities.
• Exxon’s cogeneration facilities enable the avoidance of
approximately 6 million metric tons per year of greenhouse
gas emissions.
• ExxonMobil is a charter member of the Global Gas Flaring
Reduction Partnership, an initiative of the World Bank that
seeks to reduce flaring by increasing the use of natural gas
associated with oil production
0 1 2 3 4 0
• Under the international convention of the United Nations on
climate change, in April 2016 the Russian Federation joined
the majority of the UN member states in signing the Paris
Agreement and Rosneft is now preparing to ratify the
agreement.
• No disclosures on engagement of board of directors in
managing climate risk.
• No additional efforts on the side of company to involve
employees and other stakeholders to fight against the climate
risk
1 2 3 4
• Rosneft’s Investmnet Gas Program and the Energy
Conservation between 2013 and 2016, resulted in APG
fl aring decrease from 29% to 9%. Every year since 2011
Rosneft has been analyzing and calculating the volumes of
greenhouse gas emissions and publishing the relevant
information in its Sustainability Report.
• In 2016, the independent certification authority conducted
the regular compliance audit to assess the compliance of
the integrated HSE management system with the ISO
14001 international standard and OHSAS 18001 standard.
• Rosneft’s Energy Conservation Program 2016-2020
approved by the Board of Directors in December 2015.
Under the Program, actual savings of fuel and energy in
2016 amounted to 1,218.9 thsd tce
• No initiative in accountability of avoiding of greenhouse gas
emmisions.
• Gross Atmospheric emissions decreased in the year 2016
to 1553k tons from 1575k tons
1 2 3 4
 Providing solutions for customers

• ExxonMobil is delivering solutions that enable our customers • No such disclosures regarding such initiatives
to reduce their emissions and improve their energy efficiency, by
the supply of cleaner-burning natural gas to reduce emissions in
power generation and creating highly efficient plastics and other
chemical materials that can be applied in a range of consumer
products and developing premium, high-efficiency fuels and
lubricants
• Efficient Plastics can create huge savings in the food
processing industry..

0 1 2 3 4 0 1 2 3 4

Biodiversity and ecosystem services

ExxonMobil closely examines the environmental context of the In 2016, the Company continued to implement the Program to
areas where they operate to identify biodiversity and ecosystem Preserve the Biodiversity of Marine Ecosystems at Rosneft’s
services risks and appropriate protective measures. They also License Areas in the RussianArctic Zone.
periodically screen the locations of our major operating
facilities against databases of the International Union for No more disclosures on this aspect.
Conservation of Nature and World Protected Areas. In 2016,
an estimated 25 percent of our major operating facilities were
within 5 kilometers of designated environmentally sensitive
areas.

In 2016, contributed approximately $4 million to organizations,

such as those focused on biodiversity protection and land
conservation.
Exxon’s Papua New Guinea biodiversity offset program, which
provides a strategic roadmap for the sustainable use and
management of the country’s biological resources, exemplifies
their approach to managing biodiversity.

0 1 2 3 4 0 1 2 3 4
 Spill performance & Water management

Over the past 10 years, ExxonMobil has reduced • No disclosures at all on spills across the world which is a
the global number of spills greater than 1 barrel by more than very bad sign in good ESG reporting.
13 percent.*
• Water consumption went down from 2055 MMCM to 1955
The total volume of hydrocarbons spilled on soil and water was MMCM.
4,700 barrels in 2016, with more than 50 percent recovered
at the spill sites. The majority of these spills did not affect
third parties or the communities that surround our assets.

ExxonMobil has participated in and provided technical

leadership to several joint industry projects to enhance industry
offshore spill response capability like API, the International
Association of Oil and Gas Producers (IOGP) etc.

In 2016, the net freshwater consumption at our operations was

290 million cubic meters, a decrease of more than 3 percent
from the 2015 consumption of 300 million cubic meters and
a more than 9 percent decline since 2007

0 1 2 3 4 0 1 2 3 4

Environmental compliance & Environmental management approach

Exxon’s Environmental Aspects Assessment (EAA) process
allows us to systematically identify, assess, manage and
monitor environmental and social risks throughout the life cycle
of our assets. Environmental Business Planning is undertaken
to plan, oversee and steward environmental performance. New
developments are typically subject to an Environmental,
Socioeconomic and Health Impact Assessment (ESHIA)
process. Environmental, Socioeconomic and Health
Management Plans (ESHMP) are then prepared to
“operationalize” ESHIAs by defining the set of measures that
will be employed during development and operations to avoid
environmental and social risks, reduce them to acceptable
levels or remedy the impacts..
In 2016, environmental expenses totaled RUB 73.7 bln 1, up by
3% year on year. This included RUB 47.1 bln invested in
fixed assets in order to reduce the negative environmental
impact.
Rosneft aims to meet compliance with requirements of the
laws and other requirements applicable to the Company’s
efforts in the sphere of environmental protection, including the
standards of international law;
No specific disclosure with respect to compliance with which
act.

Exxon need to comply to some more strict environment

compliance act in order to improve its ESG score

0 1 2 3 4 0 1 2 3 4
 Developing Technological solutions

ExxonMobil funds a broad portfolio of biofuels research • Most of the R&D has been done on exploring new
programs, including ongoing efforts to develop algae-based opportunities in exploration and improve process. Nothing
biofuels. These include programs for converting non-food has been mentioned in the front of Environmental Research.
based feedstocks — such as whole cellulosic biomass,
algae-based feedstocks and cellulose-derived sugars — into
advanced transportation fuels.

ExxonMobil is a leader in one of themost important next-

generation, low-carbon technologies. In 2016, we captured 6.3
million metric tons of CO2 for storage
.
ExxonMobil is conducting proprietary, fundamental research to
develop breakthrough carbon capture technologies that have
the potential to be commercially feasible without government
subsidies, standards or mandates.

0 1 2 3 4 0 1 2 3 4

Decommissioning and rehabilitation of the environment

Recognizing the unique challenges associated with offshore No such Disclosures

assets, ExxonMobil created an offshore decommissioning
centerof expertise in 2015 that is responsible for planning and
managing the safe decommissioning of our offshore assets

ExxonMobil Environmental Services (EMES) — a global

organization that provides guidance and supports the
remediation and stewardship of surplus sites — has managed
more than $6.6 billion of remediation work and returned more
than 2,300 property parcels to beneficial end uses since 2008.
In 2016, EMES monitored 5,600 active sites in more than
30 countries

In 2016, EMES received the U.S. Environmental Protection

Agency’s (EPA) Region 4 Excellence in Site Reuse Award
for our efforts to remediate and redevelop former Virginia
Chemical Company (VCC) fertilizer manufacturing sites..

0 1 2 3 4 0 1 2 3 4
 Personnel and process safety

In 2016, Exxon’s workforce lost-time incident rate per 200,000
work hours was 0.029 ,a decrease from the previous year. Over
the past decade, we have reduced this rate by 40 percent.
When compared with the American Petroleum Institute U.S.
petroleum industry workforce benchmark, ExxonMobil continues
to be below the industry average.
Rosneft seeks to meet the global industry benchmarks in the
field of industrial and occupational safety, including
health, road safety, fire and radiation safety, blowout prevention,
integrity of production facilities, preventing and responding to
fire, explosion and accident hazards (hereinafter referred
to as health and safety.

In 2016, we achieved our best-ever safety performance. We IN 2016, THE NUMBER OF OCCUPATIONAL injuries
have reduced our workforce lost-time incident rate by more than decreased by more than 30% compared to 2015, which is a
80 percent since 2000. positive trend.

Properly discloses any major accident in their report and Compliance with the requirements of the International
continuously take efforts to improve safety Standard on Environmental Management Systems (ISO
14001:2004) and the Standard on Occupational Health and
Safety Management Systems (OHSAS8001:2007).

0 1 2 3 4 0 1 2 3 4

Product safety and Transportation safety

Exxon’s Product Stewardship Information No disclosures on product safety and transportation safety.
Management System applies common global processes and
computer systems to capture and communicate information
on the safe handling, transport, use and disposal of our
products, as well as emergency contact information.

As of year-end 2016, more than 55,000 safety data sheets for

ExxonMobil products and manufacturing streams were authored
and distributed as part of the implementation of this guidance by
national and regional regulatory authorities in several countries.
Due.

ExxonMobil’s worldwide marine business, which involves

about 500 vessels in daily service, logged more than 20,000
voyages and 45,000 port calls in 2016, safely transporting
approximately 1.4 billion barrels of crude oil and refined
products, without a spill to water.

0 1 2 3 4 0 1 2 3 4
 Workforce engagement
Exxon spent $108 million on training employees during 2016 -.
In 2016, more than 4,600 employees at various levels of the
company participated in ExxonMobil’s leadership development
training programs, of which 32 percent were women and 58
percent were employees from outside the United States.
0 1 2 3 4 0
Workplace security and emergency preparedness
Exxon have addressed the threats of malaria,
tuberculosis, HIV/AIDS, Ebola, Zika and other outbreaks in
workplace through effective and efficient prevention
and control programs. Since 2007, no malaria deaths have
been reported among any workers. Additionally, none of the
approximately 100 active tuberculosis cases diagnosed in our
workforce since 2010 have infected another worker on our
sites, and no operational disruption has been reported due to
an outbreak during that time.
ExxonMobil, routinely train emergency support group
personnel on a range of possible scenarios, including simulated
spills, fires, explosions, natural disasters and security incidents.
In 2016, their activities included the 21 Emergency support
groups and 577 Exxonn personnel.
0 1 2 3 4 0
Mandatory programs on industrial, environmental and fi re
safety, occupational safety and admission to hazardous work
account for 70% of the total amount of training provided
by the Company
The Company participates in the WorldSkills global movement
promoting blue-collar occupations. The participation of the
Company’s team of chemical analysislaboratory technicians in
the WorldSkills National Championship was organized;
Rosneft’s delegates took second place in the Championship
No disclosure on gender diversity in the workforce.
1 2 3 4
In 2016, company gave utmost importance for proper workwear
and working condition of employees.
The introduction of a uniform standard Template will make it
possible to:
• Organize work more effi ciently by regulating working hours
and monitoring to ensure the appropriate use of working
time;
• Avoid the risk of breaking the law when developing and
introducing the Internal Labor Regulations in GroupCompanies;
• Improve the performance of employees by stipulating working
hours.
No emergency preparedness related disclosures
1 2 3 4
 Human Rights

No mention of Human Rights anywhere in their sustainability

Exxon approach to human rights is consistent with the goals of report.
the United Nations (UN) Guiding Principles on Business and
Human Rights. These principles outline governments’ duty to
protect human rights and businesses’ responsibility to respect
them. ExxonMobil works closely with governments, civil
society and industry to help advance the goals of the UN
Guiding Principles.

Exxon Statement and Framework on Security and Human

Rights states our commitment to conduct business in a way that
protects the security of our personnel, facilities and operations.
It also affirms our commitment to respect human rights.

ExxonMobil has conducted human rights training for

employees in select regions for many years and voluntarily
participated in Human Right’s voilation issues.

0 1 2 3 4 0 1 2 3 4

Community Relations

0 1 2 3 4 0 1 2 3 4
 Supply Chain Management

Exxon manages its suppluchain locally by
• Local Hiring and Training
• Local Supplier development
• Local Community Investment
Promoting Diverse Suppliers
In 2011, Exxon spending with minority- and women-owned
business enterprises (MWBEs) reached $1 billion in the
United States. They have been able to maintain that level of
spending with diverse suppliers for the past five years. In 2016,
they exceeded our target with a total of $1.4 billion in spending
with diverse suppliers in the United States
In 2016, they continued to increase ExxonMobil leadership
engagement in our supplier diversity program.
72 % SHARE OF SMALL AND MEDIUM-SIZED ENTERPISES
in the total number of suppliers accredited by the Company.
The Company is committed to developing cooperation with
small and medium-sized enterprises (SMEs). In 2016, the
Company actively cooperated with JSC Federal Corporation for
Small and
Medium-Sized Business Development in holding joint training
workshops for small and medium-sized enterprises on
their participation in the Company’s procurement process.
To increase the transparency of procurement via the electronic
trading platform of CJSC TEK-Torg (in the Rosneft section), in
2016, the Company and Group Companies initiated
9,096 procurement procedures regulated by Federal Law No.
223- FZ on Procurement of Goods

0 1 2 3 4 0 1 2 3 4

Employee Benefit Initiatives

NO Such Disclosure .
In the reporting year, pension contributions made by Rosneft
and Group Companies to NPF Neftegarant totaled RUB 5.72
bln; in addition, the Company allocated RUB 445.96 mln for
social support for veterans.

Rosneft is one of the most socially responsible employers in

Russia. In 2016, the Company spent RUB 24.7 bln to create
optimal working conditions, health care, promote a healthy
lifestyle and provide its employees with social guarantees.

In 2016, 788 employees of the Company improved their housing

conditions through a long-term mortgage lending program

In 2016, voluntary health insurance programs covered over 200

thsd employees of Group Companies and the administration
of Rosneft

0 1 2 3 4 0 1 2 3 4
 Executive compensation and strategic advantage
Executive compensation program supports this business model
and focuses our executives on continuous improvement,
effective risk management, operations integrity and sustainable
growth in shareholder value.
Compensation committee carefully considers the
feedback on executive compensation they receive from
shareholders, some of whom have held ExxonMobil stock for
more than a decade. Shareholders have some SAY in PAY of
executives.
0 1 2 3 4 0
Shareholder relations
In 2016, Exxon held 51 shareholder engagements on
environmental, social and governance issues with institutional
investors, pension funds, and labor, religious and
nongovernmental organizations, representing almost 40 percent
of outstanding stock held by institutional investors. These
engagements have frequently allowed Exxon to reach common
ground with shareholders, At the corporation’s 2016 annual
meeting, shareholders owning approximately 3.5 billion — or
more than 85 percent — of outstanding shares were
represented. In 2016, shareholders voted on directors,
independent auditors, executive compensation and 11
shareholder proposals.
Shareholders blamed Exxon for suppressing research result on
climate change in a recent controversies which is a red sign for
a healthy relation.
0 1 2 3 4 0
Rosneft’s existing program of remuneration to members of the
Board of Directors of the Company is based on observance of
legislative provisions and the Company’s internal documents
developed with due regard for the recommendations of the
Bank of Russia Corporate Governance Code and
best practices in respect of determination of a system of
incentives for members of governing bodies
Matters of remuneration to members of the Company’s Board of
Directors is the Regulation on Remuneration and Compensation
of Expenses to Members of the Board of Directors, which
contain an exhaustive list of all types of payments provided to
the Board of Directors members and conditions for receipt
thereof.. This which ensures absolute transparency
of the director remuneration determination mechanism.
1 2 3 4
.
To enable effective cooperation with shareholders, the
Company has provided the following communication channels:
a Hotline for shareholders, mail, electronic communication
and fax
Shareholders received answers from the Company’s specialists
to all questions of interest to them. Answers to frequently asked
questions can be found on the offi cial website of Rosneft in the
section “For Investors and Shareholders/Information for
Shareholders
In accordance with Rosneft’s Sustainability Policy, since 2007,
Rosneft has held annual round-table meetings with
representatives of its stakeholders in the form of round tables in
the regions where it operates (14 round-table
meetings were held in 2016).
1 2 3 4
 Board leadership
ExxonMobil’s affairs are managed independently under the
direction of board of directors. All directors are required
to stand for election each year at our annual meeting of
shareholders. At year-end 2016, 11 of 13 directors, including the
presiding director and all members of the audit, compensation,
public issues and contributions, and board affairs committees,
were independent as defined by New York Stock Exchange
guidelines. In 2016, the board met 12 times. Independent
leadership is also supported by the presiding director, a
non-employee director. Exxon has 3 women director on board.
As per good governanace practice contributions committee, the
board affairs committee and the compensation committee, and
are routinely reviewed at board meetings.
0 1 2 3 4 0
Transparency
ExxonMobil supports multi-stakeholder engagement for the
purpose of increasing transparency of government revenues
from the extractive industries.
ExxonMobilhas held an active role at both the secretariat and
country levels since EITI’s inception more than a decade ago.
An ExxonMobil representative has served on the EITI board as
either a primary or alternate member since it began.
0 1 2 3 4 0
Members of Rosneft’s Management Board are appointed for a
period determined by the Company’s Charter, namely three
years. The procedure for Management Board formation,
the rights, duties and liability of Management Board members,
proceedings of the Management Board are governed by the
Regulations on the Collective Executive Body
The number of members of the Company’s Management Board
has not changed and totals 11 persons. Rosneft’s Management
Board includes the heads of key business lines, operation
service and support function segments of the Company.
In 2016, the Management Board held 53 meetings and
considered over 150 items within its remit.
Rosneft have best board leadership but don’t have any women
on board
1 2 3 4
.
In 2016, Rosneft ranked 2nd in the Best Corporate Information
Disclosure on a Public Company’s Website category in the
Best Corporate Information Disclosure on an Internet Website
competition held by the National Association of Corporate
Secretaries (NACS).
As part of its efforts to increase transparency
and openness, the Company gives priority
to improving the effi ciency of communication
with shareholders and investors.
1 2 3 4
 ESG Materiality Matrix for both
companies
iiiiiiiiiiiiiiiiiiIncreasing Importance to stakeholders

Product safety and responsibility

Personnel and process safety
Transparency
Mitigating emissions Workplace security

Providing solutions for customers Executive compensation & strategic advantage

Shareholder relations
Engaging on climate change policy
Worksite health and wellness
Workforce engagement
Environmental management approach
Water management
Employee benefits and practices
Environmental compliance Spill performance
Developing technology solutions

Biodiversity and ecosystem services Supply chain management

Decommissioning and rehabilitation
of the environment Board leadership
Human rights
Community relations

Ethics and integrity

Political advocacy and contributions

Local economic growth and development

IIncreasing importance to Business

Weight- 0.25 Weight- 0.5

Weight- 0 Weight- 0.25

Calculation of ESG scores

Absolute Scores Weighted Scores

Weights Exxon Rosneft Exxon Rosneft
Engaging on climate change policy 0.5 3 2 1.5 1
Mitigating emissions 0.25 2 2 0.5 0.5
Providing solutions for customers 0.25 2 0 0.5 0
Biodiversity and ecosystem services 0 2 1 0 0
Decommissioning and rehabilitation of the
environment 0 2 0 0 0
Environmental compliance 0.5 2 1 1 0.5
Environmental management approach 0.5 2 1 1 0.5
Spill performance 0.5 3 1 1.5 0.5
Water management 0.5 3 1 1.5 0.5
Developing technology solutions 0.5 2 0 1 0

Personnel and process safety 0.5 1 2 0.5 1

Product safety and responsibility 0.5 2 0 1 0
Product transportation safety 0.5 2 0 1 0
Workforce engagement 0.25 3 2 0.75 0.5
Workplace security 0.25 2 1 0.5 0.25
Worksite health and wellness 0.25 2 1 0.5 0.25
Community relations 0 2 3 0 0
Human rights 0 4 0 0 0
Local economic growth and development 0 2 3 0 0
Supply chain management 0.25 1 3 0.25 0.75
Employee benefits and practices 0.25 0 3 0 0.75

Board leadership 0.25 3 3 0.75 0.75

Ethics and integrity 0 0 0 0 0
Executive compensation and strategic
advantage 0.5 2 3 1 1.5
Political advocacy and contributions 0.25 1 0 0.25 0
Shareholder relations 0.25 2 3 0.5 0.75
Transparency 0.25 2 2 0.5 0.5

ESG Ratings 16 10.5

 Bloomberg ESG Data
EXXONMOBIL
XOM -
Metrics Current Change Low High Median Peers
Current Low
Environmental
GHG/Revenue 648 299.7 696.9 1370.1 835.1 -187.1
GHG/MBOE 86.3 -7.8 75.8 113.7 82.2 4.1
Carbon Reserves 8182 -2086.1 519.2 4592.8 1187.2 6994.8
Oil in Total Prod % 52.1 0.6 66.3 100 75.4 -23.3
Energy/MBOE 280.9 12.3 266 439.8 348.3 -67.4
Social
Women Empls Mgmt Ratio 0.57 0.04 0.81 0.81 0.81 -0.24
Women Employees % 28 0 24.2 27 24.8 3.3
Employee Turnover % -- -- 7 7 7 --
Employees Unionized % -- -- 0 34.6 17.3 --
Lost Time Incident Rate 0.03 -0.01 0 0.14 0.02 0.01
Governance
Independent Directors % 84.6 -7.1 56.3 91.7 90.9 -6.3
Percent of Board Members that are
Women 36.4 19.7 13.3 33.3 28.6 7.8
Director Avg Age 64 2 62 66 65 -1
Director Meeting Attd % 93 0 90.5 99 95.9 -2.9
Board Size 11 2 7 15 12 -1

ROSNEFT
ROSN -
Metrics Current Change Low High Median Peers
Current Low
Environmental
GHG/Revenue 1027.2 579.6 307.6 698.3 534.8 492.4
GHG/MBOE 39.1 -4.4 21.7 194.2 60.3 -21.2
Carbon Reserves 654 0 128.5 7280.3 2886.3 -2232.3
Oil in Total Prod % 79.2 -11.1 35.2 97.2 58.8 20.4
Energy/MBOE 247.5 151.2 22.2 727 228.6 18.9
Social
Women Empls Mgmt Ratio 0.42 -0.08 0.67 0.92 0.67 -0.25
Women Employees % 33.5 1.6 24.3 41 31 2.5
Employee Turnover % 10.9 -0.8 4 16 13 -2.1
Employees Unionized % 69 0 73 89 83.6 -14.6
Lost Time Incident Rate -- -- 0.05 0.33 0.08 --
Governance
Independent Directors % 33.3 -11.1 15.4 90 50 -16.7
Percent of Board Members that are Women 0 0 0 45.5 12.1 -12.1
Director Avg Age 60 1 52 70 61 -2
Director Meeting Attd % 99.6 0.2 81.9 99.4 96.6 3
Board Size 11 4 8 17 12 -1
 Bloomberg ESG Data Analysis

10000
1000
100
ROSNEFT EXXON
10
EXXON ROSNEFT
1

100

10 ROSNEFT EXXON
EXXON ROSNEFT
1
Women Women Employee Employees Lost Time
0.1 Empls Employees Turnover % Unionized Incident
Mgmt Ratio % % Rate
0.01

100

10
ROSNEFT
EXXON EXXON
1
ROSNEFT
 Conclusion
Exxon Rosneft
Robecosem Rank 60 48
Sustainlytics Rank 60.2
Bloomberg ESG Disclosure 50.2 58.1
ESG Ratings( Calculated) 16 10.5

Exxon has the most diversified portfolio considering hydrocarbon type,

geological setting and country risk. Exxon is also a good operator. Today,
XOM's oil share of production is rising but XOM has a large share of gas
resources. Renewables : ExxonMobil funds a portfolio of biofuels research
programs through research collaborations and university partnerships They
are working with REG on Cellulosic research and Synthetic Genomics on
algae.

Rosneft Gas business has been an important focus for the company.
Rosneft has large gas reserves post its recent M&A spree and as such is
looking for options to monetise it, including potential pipeline exports. After
looking for various ESG factors in its reporting we found that Rosneft is
lacking most of the factors and has below average ESG reporting.

Although Exxon had been hit with a lot of controversies in the past over
sustainable issues which has destroyed its reputation from time to time but
at the same time Exxon has shown efforts to consider the ESG factors into
its reporting and has realized that ESG can have considerable impact on
company’s value. Its reporting into various ESG factors has been
substantial. Therefore the ESG rating calculated by us and the rank
provided by Bloomberg is considerably higher for Exxon as compared to
Rosneft’s Rating. Therefore Exxon has performed better on the ESG
aspect of reporting as compared to Rosneft.
References

https://www.blackrock.com/corporate/en-
in/literature/whitepaper/viewpoint-exploring-esg-a-practitioners-
perspective-june-2016.pdf
http://corporate.exxonmobil.com/en/community/corporate-
citizenship-report/environmental-performance/environmental-
management

https://www.rosneft.com/upload/site2/document_file/RN
_SR_2016_EN(2).pdf

http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2008.n2.1

ESG Credit Suisse report 2016

Rosneft 2016 annual report

Thank you !