Is ExxonMobil Stock Halal?

August 9, 2021

Tayssir Halwani

Table of Contents

How much of ExxonMobil’s revenue comes from haram?

ExxonMobil explores for and produces crude oil and natural gas.

In addition, ExxonMobil manufactures and sells petroleum and petrochemical products.

Practical Islamic Finance concludes:

None of ExxonMobil’s revenue comes from anything inherently haram.

Does ExxonMobil rely on interest to operate?

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What is ExxonMobil’s Environmental, Social, and Governance (ESG) impact?

Environment

On August 6, 2021, ExxonMobil was suspended from the Climate Leadership Council.

Its suspension resulted after Keith McCoy, Exxon’s senior director for federal relations, was secretly recorded in an interview stating the company voiced support for a carbon tax only because it knew such a policy would be almost impossible to implement.

In addition, McCoy revealed Exxon had funded “shadow groups” to work against some of the early climate change efforts and stated the company was looking out for their investments and shareholders’ investments.

Exxon CEO Darren Woods apologized for and condemned the comments made, stating they “in no way represent the company’s position” and reiterated its support for a carbon tax.

Social

ExxonMobil has a below average Glassdoor rating of 3.2 out of 5 from over 6,000 current and previous employees compared to a 3.3 average for all other Glassdoor rated companies.

Governance

ExxonMobil has a long history of attempting to evade liability for and falsely reporting oil spills it has caused.

These cases have since been settled, resulting in Exxon paying hundreds of millions of dollars for environmental and marine life damages.

Practical Islamic Finance concludes:

ExxonMobil has a net negative ESG impact.

Comfort Rating

From ExxonMobil’s business, financial, and ESG reviews, Practical Islamic Finance rates ExxonMobil stock as:

Uncomfortable to invest in from a Halal perspective.

Justification for our rating

The holy Quran and authenticated hadiths of the prophet Muhammad (SAW) are rich with examples that encourage preserving the natural environment.

The prophet Muhammad (SAW) said: “There is none amongst the Muslims who plants a tree or sows seeds, and then a bird, person or animal eats from it, but is regarded as a charitable gift for him.”‏ (Bukhari).

Given Exxon’s disingenuous attitude towards climate change, unknowingly revealed by its senior director for federal relations and which contrary to the CEO’s later comments we absolutely believe represents the true position of Exxon, Practical Islamic Finance is Uncomfortable investing in Exxon from a Halal perspective.