By Karen Savage
The oil giant joined the Dow in 1928 as Standard Oil of New Jersey and was the world’s most valuable company in 2013. It has lagged in recent years, amidst dropping oil prices and swirling questions about its role in climate change.
Oil prices, which hovered around $100 per barrel in 2013, dropped to around $60 per barrel by the end of last year. As the Covid-19 crisis unfolded, prices plummeted below $20 per barrel. The price has rebounded, but is still below its pre-pandemic value.
Exxon and other major oil companies have argued their businesses will remain valuable despite the growing climate movement because the world will continue to rely on fossil fuels indefinitely. Many of the lawsuits, particularly by investors, argue the company is not being honest about the risks climate change poses to its business.
Investigative reports by InsideClimate News and the Los Angeles Times in 2015 revealed that Exxon knew about the harmful effects of climate change for decades, yet still funded climate denial campaigns and worked to cast doubt among the public on the imminent impacts.
The Dow said the move was prompted by Apple’s decision to split its stock. It’s unclear what effect it will have on Exxon’s value.
Company spokesman Casey Norton said the action doesn’t affect Exxon’s business nor the long-term fundamentals that support the company’s strategy.
“Our portfolio is the strongest it has been in more than two decades, and our focus remains on creating shareholder value by responsibly meeting the world’s energy needs,” Norton said in an emailed statement.
Climate advocates, however, say the Dow’s move is a step in the right direction.
“ExxonMobil [has] been dropped from the Dow Jones Industrial Average, a major US stock market index,” Greenpeace UK, an advocacy group, said on Twitter. “There’s a long way to go but the age of oil is coming to an end.”