Exxon Mobil has indicated for the first time that it may have to write down the value of assets due to the effects of climate change risks on demand for fossil fuels.

The nation’s largest oil company said that as part of its annual business planning process, it now evaluates climate change as a business risk, similar to other operational, strategic, and financial risks.

If that process “results in any significant changes to the corporation’s current development plans for its portfolio, certain assets could be at risk for impairment,” Exxon said in a regulatory filing.

Until asset recoverability assessments “are complete, it is not practicable to reasonably estimate the existence or range of potential future impairments,” it added.

According to the Houston Chronicle, the warning is “a remarkable admission of climate change risks from one of the most recalcitrant oil giants, which has long told investors that the world’s growing population will fuel an insatiable thirst for fossil fuels and dismissing growing concerns about climate change.”

Many of the world’s largest corporations and industries that rely on petroleum have pledged to become net-zero emission companies during the coming decades. Unlike European rivals such as BP and Royal Dutch Shell, Exxon has been reluctant to embrace renewable energy but in May, a climate-minded activist investor won a quarter of the seats on its board.

“It’s a welcome shift that ExxonMobil’s new board is forcing the company to face the reality that the climate crisis it helped cause and the transition to a clean energy economy will have major financial impacts on its assets and bottom line,” Ben Cushing, campaign manager for the Sierra Club’s Fossil-Free Finance campaign, told Reuters.

Exxon said in its filing that it “continues to make progress on its greenhouse gas emission reduction plans and efforts to position the company for success in a lower-carbon emissions future.”

“Exxon appears to be taking climate risks more seriously as the oil industry faces mounting pressure from governments, corporations, and the public to change course to avoid the worst consequences of climate change,” the Chronicle said.

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