Climate Feedback

Oil heirs mutiny at Exxon

2007_there_will_be_blood_013.jpgWith much of the corporate world competing to be ahead of the decarbonization curve, it’s not uncommon to see investors actually begging governments for more regulations, as a prominent group in the US did this week. More remarkable is witnessing oil goliath Exxon Mobil torn by a climate-driven shareholder revolt and its backlash.

On fossil fuels and climate change, Exxon in the past has not so much failed to read the writing on the wall as actively attempted to efface it. That’s changed, but not enough, say the heirs of John D. ‘Standard Oil’ Rockefeller, whose ancestral ex-monopoly forms Exxon’s core. The Rockefellers are sponsoring four shareholder resolutions that will come to a vote at the company’s annual shareholder meeting May 28. According to The Independent, they say Exxon needs to research how climate change will affect the developing world, fund alternative fuels, reduce its carbon footprint, and spur more managerial debate by splitting up the roles of chariman and CEO – both posts are currently held by Rex Tillerson. At last year’s meeting, says The Guardian, a call to split up Tillerson’s jobs got 40% yays, and addressing climate change got 30%. With a vast green tide and 19 institutional investors backing up the Rockefellers (who own only 0.006% of Exxon’s stock, the company says), this year could see even greater support.

But the Wall Street Journal – ever the champion of the little guy – noted in an editorial yesterday (subscription required) that blue-collar investors have struck back. According to the Journal, US police union leader Chuck Canterbury wrote to Tillerson that the resolutions

would impose “rigid, ideologically-based conditions on the company’s future,” would nullify “the judgment of a highly successful management team,” and would “undercut every project and business operation.” This would “hamstring ExxonMobil’s profitability and growth, thus directly harming the police officers, firefighters, teachers and public employees whose retirement savings are invested in the company.”

The WSJ goes on to sneer at Denise Nappier, the “ambitious” Connecticut treasurer in charge of state pensions who favors changes at Exxon: “It’s more likely that the future candidate for Governor is merely angling for some easy green publicity as she and the state’s pensioners continue to benefit from their investment in Exxon’s substantial oil profits.”

Now, the Wall Street Journal may think that US$11-bilion quarterly profits should moot shareholders’ ethical qualms, but that doesn’t make the qualms hypocritical. The Rockefellers, and representatives of the good people of Connecticut too, have every reason to want Exxon to go greener, including a financial rationale: as economist Neva Rockefeller Goodwin pointed out in a press conference, today’s record profits stem “from investments and decisions made many years ago, focusing on a narrow path that ignores the rapidly shifting energy landscape around the world, including developing nations”. And in the event that Goodwin and the other worried Exxon investors are wrong about that rapidly shifting landscape, police pensions are hardly shackled to Exxon.

Slate aptly observes that “no family in American history has possessed more wealth, or been more conflicted about the obligations and benefits it bestows, than the Rockefellers.” But the stakes here go well beyond inherited oil guilt. Here’s to teachers, firefighters and police officers retiring with both more wealth and a more sustainable energy economy.

Anna Barnett

Photo: Wikipedia user Pollinator


Comments are closed.