Having spent many years as a writer and lawyer arguing for sustainable energy policies, last year I turned to an important source of cognitive dissonance in my personal life: an investment portfolio replete with fossil fuel stock. Not surprisingly, Exxon Mobil topped my list of “must-sell” shares. Along with its mammoth infusion of carbon-based fuels into the global economy, the company’s decades-long deception about our impending climate crisis made it a top target for divestment.
This spring, though free of my personal Exxon holdings, I couldn’t resist taking a peek at the company’s mailing to shareholders in advance of its 2016 annual meeting, in Dallas on May 25. The proxy package opens with a letter from Exxon Chairman and CEO Rex Tillerson. Reading it, I had a momentary flash of hope. “Your vote is important to us,” he writes, referring, in part, to a raft of shareholder proposals whose adoption could have real impact on the company’s environmental policies and practices. My hopes were dashed, though, as I continued reading. Each suggested reform was followed by the same stern directive: “The Board recommends that you vote against this proposal.”
One shareholder proposal calls on Exxon to appoint an independent climate expert to its board of directors. This would be a good way for the company to show that it is committed to giving more serious attention to the global-warming challenge. In recommending a “no” vote, Exxon explains that periodic briefings by Exxon staff and outside experts provide the board with all the information it needs on climate change. It also argues that Exxon board members should have “expertise in managing large, relatively complex organizations and be accustomed to dealing with complex situations with worldwide scope.” I couldn’t help wondering: What “situation” is more complex or wider in scope than potentially cataclysmic climate change? And what issue is more fundamental to the viability of a global corporation that has staked its future on the burning of fossil fuels?
Another group of shareholders — the United Steelworkers — seeks fuller disclosure of Exxon’s lobbying outlays. In calling for an annual report on the company’s efforts to influence environmental laws and policies that may affect Exxon business interests, the Steelworkers point to Exxon’s membership in the American Legislative Exchange Council, which spearheads many of the most strident state-level campaigns attacking policies favorable to renewable energy. Exxon urges shareholders to reject fuller lobbying disclosure, asserting that its periodic reports to Congress and various state and local jurisdictions, “as required by law,” provide “sufficient transparency and accountability.” Why make it any easier for scrappy shareholders, or the public at large, to track the company’s massive and often secretive lobbying campaigns?
Perhaps most disturbing is the board’s dismissal of a shareholder proposal urging Exxon to endorse an upper limit on the amount of global warming that our planet and its inhabitants can endure. The proposal suggests that the global average temperature should not be allowed to rise more than 2º C above its pre-industrial level — hardly a radical notion, as it simply echoes the terms of the Paris climate accord, agreed to by 195 nations in December. In fact, the Paris agreement warns that an even lower ceiling, keeping the global average temperature within 1.5º C of the pre-industrial level, will be needed to preserve some semblance of climate stability.
How does Exxon explain its rejection of these caps, overwhelmingly accepted by nations large and small, industrialized and developing? It says that it prefers to pursue “practical, achievable solutions … rather than focusing on a future global temperature stabilization outcome that ultimately will be dictated by many variables beyond the company’s control.”
In other words, because Exxon’s actions alone will not shape the dimensions and depth of a future climate crisis, widely credited scientific warnings about the need to keep global warming within specific bounds can be held at arm’s length. Managing Exxon’s massive internal operations (drilling, refining, distribution) and its sale of 5.8 million barrels of petroleum products per day is tough enough without the added headache of worrying about the company’s contribution to climate change.
Another shareholder, the New York State Common Retirement Fund, calls for a report on how domestic and international climate change policies will affect Exxon’s oil and gas holdings. This, too, is rejected. Exxon reasons that demand for its products is growing, not shrinking, and that it will take many decades for the world to shift to a lower-carbon economy. With all that growth in fossil fuel use, shareholders needn’t be concerned that the company’s “proven hydrocarbon reserves are, or will become, stranded.” This, of course, ignores the inconvenient truth that existing national and international policies, not to mention future ones, will require us to leave substantial portions of known reserves of oil, gas, and coal in the ground. How else might we keep our planet from burning its way through the temperature limits set by the Paris accord?
Navigating America toward a more sustainable energy future won’t be easy. Vision, rather than obfuscation and denial, must guide the efforts of governments, corporations, and institutions. Someday, we can only hope, the world’s leading oil and gas company will face up to this challenge.Philip Warburg, former president of the Conservation Law Foundation, is the author of “Harness the Sun and Harvest the Wind.’’