In September 2016, the U.S. Securities and Exchange Commission (SEC) launched an investigation into ExxonMobil's accounting treatment of its oil and gas reserves. The SEC questioned the company's decision to record no impairments of its reserves, although oil prices had declined by almost 60% since mid-2014 due to a mix of factors, including excess supply from the US, Russia and Middle East and slowing demand from China. Moreover, critics of ExxonMobil's accounting noted that competitors, such as Chevron and Royal Dutch Shell, had impaired their reserves. This followed probes, by New York and Massachusetts Attorney Generals among other state Attorney Generals, which questioned whether ExxonMobil had, for decades, failed to inform investors about potential climate-change risks. As CEO Rex Tillerson stepped down to become the Secretary of State in the new Administration under President Donald Trump, the new CEO of ExxonMobil faced many strategic questions. How should ExxonMobil invest going forward? What were the capabilities that ExxonMobil needed to develop in order to be successful in the future? Did the accounting book value of the reserves reflect economic reality or was an impairment needed?

Supplement to case 117046. The case presents ExxonMobil's response to growing pressure to disclose how climate change will impact their business. This includes multiple asset impairments and losing a proxy vote to shareholders to increase climate change related reporting. Supplements the (B) case.