Exxon Mobil Stalls on Warming (OpEd)
Irving oil giant lags behind its peers, refuses to deal with climate change
Shareholders sent a strong message at Exxon Mobil Corp.'s recent annual meeting that they're unhappy with the company's lackluster response to global warming. Spurred by repeated rejections by the company's board to discuss the issue and unimpressed by its new Corporate Citizenship Report, shareholders owning $121 billion of company stock demanded at the spring meeting that the company take climate change seriously and set greenhouse gas reduction goals. We're now waiting for a response.
While its competitors are moving aggressively on climate change, Irving-based Exxon Mobil refuses to embrace renewable energy, opposes a strong national climate policy and obfuscates on climate science. Investors fear the company's go-slow approach will give domestic and overseas rivals a competitive advantage as carbon-reducing regulations take hold and wind, biofuels and other low-carbon energy sources grab a larger share of the global energy pie.
Exxon Mobil's strategy stands in stark contrast to industry peers such as BP, Shell, Chevron and ConocoPhillips, which are all beginning to manage the risks and seize opportunities from climate change. Differences with cross-state rival ConocoPhillips are especially glaring.
- ConocoPhillips says voluntary approaches to climate change are not working and mandatory national legislation is needed. Exxon Mobil opposes aggressive action on climate change, saying it will hurt the economy and U.S. competitiveness.
- ConocoPhillips has agreed to set a target to reduce greenhouse gas emissions. Exxon Mobil refuses to set any targets.
- ConocoPhillips is making major investments in renewable energy sources that build on its core strength in refining, including a $150 million commitment to alternative fuels research with a strong focus on biofuels. Exxon Mobil has consistently attacked the economic viability of renewables and is investing only $10 million a year on research at Stanford University that won't generate results for years.
- ConocoPhillips has strong board of director leadership on climate change, including active participation from former EPA head Bill Reilly. Exxon Mobil's board has shown no leadership on climate change and has rejected numerous attempts by investors to meet on the topic.
For those who believe that a company's financial performance is the only barometer that matters, consider this: Exxon Mobil's stock performance has actually lagged behind ConocoPhillips' stock since the company was created via a Conoco/Phillips merger in 2002.
More action sought
At Exxon's annual meeting in Dallas, investors made clear they want less dawdling and more action on climate change. Many of the company's largest shareholders, including the CalPERS and CalSTRS public pension funds in California and state treasurers from Connecticut, New York and North Carolina, called on the board to set greenhouse gas reduction targets. The shareholder resolution was backed by a record-high 31% of shareholders owning 1.46 billion shares of stock. Many of the same investors also sent a strong rebuke by opposing board member Michael Boskin's reappointment due to his repeated refusal to meet with them on climate issues.
The bottom line
Shareholders deserve better from Exxon Mobil. Instead of stalling on climate science, climate policy and climate action, the company should be taking the lead in providing long-term solutions to this colossal global challenge.