As ExxonMobil prepares for its annual normal assembly (AGM) this spring, the company is dealing with calls to drop an unprecedented lawsuit towards shareholders who’re asking for deeper international warming emissions reductions. There was comparatively much less consideration to the choice by local weather scientist Dr. Susan Avery to not search re-election to the ExxonMobil board of administrators. But this shift in company management is important, marking the top of a chapter in ExxonMobil’s lengthy and ongoing historical past of local weather deception and disinformation.
Right here’s a primer on why a local weather scientist was on ExxonMobil’s board, what Dr. Avery achieved throughout her tenure, and the way ExxonMobil has acted on local weather science over the previous seven years. I conclude with one plea to Dr. Avery in her ultimate weeks on ExxonMobil’s board: to name on her colleagues in company management to cease the corporate from suing shareholders who’re searching for to protect a livable local weather.
Why is a local weather scientist on ExxonMobil’s board?
As a result of climate-conscious traders requested it. As proof mounted of ExxonMobil’s function in concerted campaigns to disclaim local weather science—by way of investigative journalism exposés and stories corresponding to UCS’s Local weather Deception Dossiers—shareholders known as for the corporate to appoint an unbiased director with local weather change experience, believing that the presence of an professional would result in science-informed company selections.
Dr. Susan Avery, a physicist and atmospheric scientist, is the previous director of Woods Gap Oceanographic Establishment (WHOI) in Massachusetts. She’s additionally professor emeritus at College of Colorado at Boulder. On the time of her nomination, Dr. Avery was a revered local weather scientist—though she had additionally sparked controversy along with her selections at WHOI to just accept main funding from oil and fuel firms.
It’s price noting that the shareholder proposal requesting the nomination of a local weather professional to ExxonMobil’s board acquired simply over 20 p.c help in 2016. But the company acted on it—giving the mislead claims that such shareholder advocacy is frivolous. In truth, shareholder resolutions could be an early-warning system to assist firms tackle problems with investor and public concern earlier than they snowball into main issues.
What did Dr. Avery accomplish?
Cynically talking, she raked in properly over $2 million in compensation for finishing up her obligations as an ExxonMobil director.
As a member of ExxonMobil’s board of administrators and chair of the Surroundings, Security, and Public Coverage (ESPP) committee of the Board, Dr. Avery was in a novel place with a vital accountability to steer the company towards scientific integrity, transparency, and accountability. Shareholders and scientists had a professional expectation that she would use her management function to make sure that the corporate’s assets weren’t used to advertise defective science, local weather disinformation, or greenwashing campaigns. Sadly, ExxonMobil’s selections and actions over the course of her board tenure have dashed that expectation.
Again within the pre-pandemic days when ExxonMobil held in-person AGMs, I attended on the proxy of climate-conscious shareholders. Scientists from a spread of disciplines and establishments joined me to ask questions of company decision-makers and converse in help of local weather motion. You possibly can learn their insights from their experiences—together with being denied the chance to take the ground—and their efforts to have interaction with Dr. Avery in 2017, 2018, and 2019.
A turning level for shareholder advocacy
ExxonMobil’s appointment of Dr. Avery to its board was an acknowledgment of mounting strain on the company to align its selections and actions with local weather science. And the strain stored rising. At ExxonMobil’s 2017 AGM—when Dr. Avery was added to the board—a majority of shareholders for the primary time authorized a climate-related shareholder proposal.
A couple of months later, Dr. Geoffrey Supran and Dr. Naomi Oreskes of Harvard College printed an essential peer-reviewed research of ExxonMobil’s local weather change communications, concluding that the company “contributed quietly to local weather science and loudly to elevating doubts about it.”
What adopted was a stream of yearly company stories produced in response to investor calls for that ExxonMobil disclose its plans for a world that meets the Paris local weather settlement’s purpose of limiting the worldwide common temperature enhance to properly beneath two levels Celsius (2°C) above pre-industrial ranges, and striving to restrict it to 1.5°C.
ExxonMobil wrapped itself within the mantle of “internet zero”—conveniently omitting the emissions deriving from use of its oil and fuel merchandise, which account for about 85 p.c of the overall international warming emissions attributable to the company. The corporate used Dr. Avery’s picture in selling its bogus net-zero options.
The company confronted an unprecedented shareholder insurrection in 2021, with upstart hedge fund investor Engine No. 1 capturing three seats on the board by efficiently arguing that ExxonMobil was failing to adapt for the transition to wash power. Throughout Dr. Avery’s tenure, three climate-related shareholder proposals gained majorities.
Not an data deficit
Nonetheless, one local weather professional on the board evidently couldn’t change ExxonMobil’s enterprise mannequin. Quite a few educational research and inner company paperwork reveal that the issue was not a deficit of data. A single local weather professional clearly didn’t steer the company away from local weather disinformation. Did her presence allow ExxonMobil to hone its local weather disinformation and greenwashing for a brand new period when bald-faced local weather denial not works?
The fossil gasoline big now claims to be “aligned” with the Paris local weather settlement, all whereas it continues to massively increase oil and fuel exploration and manufacturing and foyer towards local weather motion. In sworn testimony earlier than the Home Oversight and Reform Committee in 2021, ExxonMobil Chair and CEO Darren Woods refused to make sure that company funds will not be spent to unfold disinformation and block local weather motion.
Not surprisingly, Massive Oil’s disinformation marketing campaign continues, as documented by the Congressional investigation and local weather accountability lawsuits filed by dozens of cities, counties, and states throughout america and its territories.
In the meantime, ExxonMobil additionally resists transparency, working by way of the US Chamber of Commerce, the American Petroleum Institute, and different teams to oppose a powerful Securities and Change Fee (SEC) rule designed to mandate standardized and comparable company disclosures. Learn this current weblog by my colleague Laura Peterson to learn the way the SEC weakened its ultimate local weather disclosure rule in an (unsuccessful) try to placate foes.
Main within the fallacious course
Within the face of the local weather disaster, each board member of each publicly held company should be local weather competent—and each board member has an obligation to restrict company local weather impacts, plan for the transition to wash renewable power, and help science-based local weather coverage. Some specialists warn that board members of firms that don’t adequately handle climate-related dangers may even be held personally answerable for breaching their authorized obligations.
Dr. Avery, for her half, gave a ringing endorsement of ExxonMobil’s 2023 “Advancing Local weather Options” report—a masterclass in paltering (utilizing chosen truthful statements to mislead) and greenwashing (misleading advertising to counsel firms or merchandise are environmentally pleasant).
“As chair of our ESPP Committee, I’m proud to work on key points associated to local weather danger at ExxonMobil. With my expertise as an atmospheric scientist and a frontrunner at a world analysis group, I’m dedicated to serving to to advise the Board on public problems with significance… The members of the ESPP Committee are united in our dedication to place ExxonMobil as an trade chief in pursuing sustainable options that enhance high quality of life and meet society’s evolving wants.”
As Dr. Avery nears the top of seven years on the board, right here’s a snapshot of “key points associated to local weather danger at ExxonMobil”:
ExxonMobil presents deceptive science and refuses to acknowledge its accountability for decreasing emissions from the usage of its oil and fuel merchandise. In its 2024 “Advancing Local weather Options” report, ExxonMobil continues to disclaim any accountability for Scope 3 emissions from use of the oil and fuel merchandise that it markets and sells—which represent roughly 85 p.c of the heat-trapping emissions attributable to ExxonMobil. My local weather scientist colleague Dr. Carly Phillips does an excellent job explaining how the charts offered on this report will not be scientifically rigorous and even seem deliberately imprecise and deceptive, which reduces transparency round ExxonMobil’s local weather impacts and mitigation efforts.
The company’s “low carbon” roadmap depends closely on unproven and unscaled applied sciences. ExxonMobil focuses on net-zero applied sciences corresponding to carbon seize and storage (CCS) and hydrogen, calling into query the company dedication to decreasing emissions within the vital interval between now and 2030.
ExxonMobil’s promoting campaigns mislead customers, overstate its present and deliberate clear power endeavors, and enhance its personal legal responsibility. Given the centrality of polluting fossil fuels to its enterprise, ExxonMobil’s current advertising campaigns have been criticized as greenwashing for falsely representing ExxonMobil as a clear power chief, making overblown claims concerning the environmental advantages of its merchandise, and touting unproven applied sciences. Along with deceptive the general public about key scientific and environmental points, these campaigns enhance company legal responsibility. The corporate is now being sued by states and municipalities throughout america and its territories for client fraud, misleading commerce practices, and racketeering, threatening the monetary safety of shareholders corresponding to public pension funds.
ExxonMobil continues to fund organizations that unfold local weather disinformation and search to dam local weather motion. Regardless of the corporate’s public claims of “advancing local weather options”, ExxonMobil retains management roles in a number of commerce associations—together with the American Petroleum Institute, American Gasoline and Petrochemical Producers, and Nationwide Affiliation of Producers—that interact in local weather obstructionist lobbying. ExxonMobil additionally continues to bankroll organizations such because the American Enterprise Institute and the US Chamber of Commerce which have an extended and ongoing historical past of distorting science and downplaying the grave nature of the local weather disaster.
In the end, ExxonMobil’s “World Outlook” tasks larger oil, fuel, and coal consumption in 2050 than right now, totally failing to align with Intergovernmental Panel on Local weather Change (IPCC) and Worldwide Power Company (IEA) eventualities that fossil gasoline use should fall to restrict probably the most harmful impacts of local weather change.
Cease suing climate-conscious shareholders
Maybe nothing exhibits that ExxonMobil is set to keep up its climate-destroying enterprise mannequin higher than the corporate’s present lawsuit towards its personal shareholders. In January, the company sued two shareholders that had filed a decision requesting medium-term targets for decreasing emissions from company operations and from the usage of its oil and fuel merchandise. ExxonMobil is urgent forward with its lawsuit even after the shareholders withdrew their proposal.
The SEC has lengthy acknowledged local weather change is a big challenge that shareholders have an curiosity in discussing; the company has allowed many climate-related shareholder resolutions to proceed to a vote in recent times, and none has provoked such a authorized backlash. Because the local weather disaster worsens, traders have a proper to grasp and tackle the monetary dangers posed by delays in local weather motion, notably by fossil gasoline firms like ExxonMobil which might be contributing disproportionately to the issue whereas failing to evolve for the clear power transition.
ExxonMobil mustn’t try to repress its shareholders’ means to contemplate and supply strategic steering to company management about one of the urgent problems with our time. This lawsuit towards shareholders calling for extra bold local weather motion, together with ExxonMobil’s aggressive enlargement of oil and fuel manufacturing, show to traders and the world that the company continues to behave in unhealthy religion. Buyers together with the California Public Workers’ Retirement System (CalPERS)—the biggest US pension fund—are calling on ExxonMobil to drop the lawsuit and weighing whether or not to maintain their investments in mild of those techniques.
Over the previous seven years, Dr. Avery has pissed off shareholders, scientists, and the general public by failing to steer the company towards transparency and accountability—and away from local weather disinformation and greenwashing. Whereas she can’t erase that legacy, in her ultimate days on the ExxonMobil board Dr. Avery may do a big service to local weather science by persuading her colleagues in company management to drop this frivolous and hypocritical lawsuit. She nonetheless has time to behave earlier than her time period expires on the company’s AGM in late Could.