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Exxon Mobil's Shareholder Revolt on Global Warming

by Steven D Fri May 19th, 2006 at 10:23:09 AM EST

It seems not everyone agrees with Big Oil that global warming is over-hyped alarmist nonsense.  Today's Houston Chronicle has this story about Exxon's institutional investors who are demanding a meeting with the Board of Directors over Exxon's failure to address the threat of global warming:

NEW YORK - A group of pension funds and institutional investors on Thursday accused Exxon Mobil Corp. of failing to act on global warming concerns and demanded a meeting with the company's board.

In response, Exxon Mobil said it has an ongoing dialogue with members of the group and is setting up a meeting in July to discuss these issues.

Why are these big time investors in such a tizzy when Exxon Mobil is making just obscene amounts of money?  Follow me below the fold for the answer. . .

Exxon has agreed to a meeting with the shareholders, but, as currently planned, it will only be with Exxon staffers (whoever that might mean) and not with Exxon's board.  The investor group is adamant that it meet with the board in its entirety and not be fobbed off on low level minions of Exxon's senior management:

"In part, our position includes the fact that we recognize that the accumulation of greenhouse gases in the Earth's atmosphere poses risks that may prove significant for society and ecosystems," Exxon Mobil said in a prepared statement. "We believe that these risks justify actions now, but the selection of actions must consider the uncertainties that remain."

The group, composed of pension fund trustees and institutional investors, said they were concerned Exxon Mobil's handling of the climate change issue left it trailing behind its major oil peers, such as BP and Royal Dutch Shell.

Now why are Exxon's largest investors getting into a snit about the global warming issue?  After all, these large pension and mutual funds don't put their money in Exxon's stock in order to effect social change or better mankind.  They hold Exxon Mobil stock in order to get a share of Exxon's massive profits for their own investors and pensioners.

The answer can be guessed at when we consider these two words:  Big Tobacco.  Like the oil companies are doing today, Big Tobacco spent millions of dollars in a disinformation campaign to dissuade people from the clear scientific evidence that smoking was harmful to your health.  The upshot of all that corporate fraud and deceit?  Billions of dollars paid by Big Tobacco to settle lawsuits brought by smokers and numerous State Attorney Generals.

Is the picture getting clearer?  Sure, Exxon's shareholders may be happy with record profits and dividends, but they have to be concerned about Exxon's record of lying about the threat global warming poses, especially since Exxon Mobil's products are the main source of the greenhouse emissions driving that warming trend.  So, when these large institutional shareholders see stuff like this . . .

[T]he Competitive Enterprise Institute (CEI) will unveil two 60-second TV ads focusing on what it calls "global warming alarmism and the call by some environmental groups and politicians to reduce fossil fuel and carbon dioxide emissions." The ad, which will be aired in more than a dozen cities across the country, is being released just a week before the May 24th opening (in LA and NYC) of Al Gore's new movie on global warming, An Inconvenient Truth.

Who is CEI? The Washington Post explains:


The Competitive Enterprise Institute, which widely publicizes its belief that the earth is not warming cataclysmically because of the burning of coal and oil, says Exxon Mobil Corp. is a "major donor" largely as a result of its effort to push that position.


Exxon documents reveal the company gave $270,000 to CEI in 2004 alone. $180,000 of that was earmarked for "global climate change and global climate change outreach." Exxon has contributed over $1.6 million to CEI since 1998.

CEI's general counsel Sam Kazman said, "I think what attracted [Exxon] to us was our position on global warming." CEI's position? The Institute believes the dangers of global warming are akin "to that of `an alien invasion.'"

Exxon's spokesperson Tom Cirigliano has explained why the company is so dedicated to funding CEI's pushback on global warming:


We want to support organizations that are trying to broaden the debate. ... There is this whole issue that no one should question the science of global climate change that is ludicrous. That's the kind of dark-ages thinking that gets you in a lot of trouble.


For the oil industry, Al Gore's film exposing the truth is perceived as a threat, and they have no shortage of funds to try to distort it.

. . . it doesn't take much for them to put 2 + 2 together and conclude that massive lawsuits (How many dollars in future losses?  Billions?  Trillions?) are in Exxon Mobil's future unless it starts doing something immediately to cover Lee Johnson's massive jowls inoculate itself against such claims.  Exxon's continuing efforts to muddy the waters of the global warming debate are seen by these investors as a dangerous sign that the value of their Exxon shares in the future will plummet unless management adopts a different strategy regarding climate change, and the sooner the better.

My prediction?  The investors won't get their meeting with the board, not will Exxon back off its campaign to mislead the world about the danger global warming poses.  In fact, I wouldn't be surprised to see a bill presented to Congress (by Republicans, naturally) at some future date proposing to absolve the oil companies from all legal liability arising from greenhouse gas emissions and the effects of global warming.  After all, that's the approach Big Tobacco has taken, time and time again.

But then I'm a pessimist.  Let's hope my crystal ball gazing proves to be a bit clouded, and that these investors force Exxon to change its approach on the environment before it's too late -- for all of us.

Front paged at Booman Tribune.  Cross-posted at My Left Wing and Daily Kos.

Tell me if you think I have it wrong, please.
by Steven D on Fri May 19th, 2006 at 10:33:42 AM EST
My uninformed guess is that you have it right.

These investors have a major influence if they decide to switch their investments to other oil companies and still make the same indecent profits

You can't be me, I'm taken

by Sven Triloqvist on Fri May 19th, 2006 at 12:03:28 PM EST
[ Parent ]
by Steven D on Fri May 19th, 2006 at 01:14:48 PM EST
[ Parent ]
A much better way of attracting the attention of company boards is consumer power.

A couple of million people not tanking their cars at Exxon or Esso for a week would really make them sit up. For the consumer it is easy, as there are so many alternatives at the same price. The question is: how to organize such a protest. This medium is ideal, but no-one has cracked it yet.

But I think we will see, over the next few years, the development of these kinds of actions. I am awaiting a further move by Shell (for instance) to shift their 'passive - we think green' campaigns into higher gear. It's crap of course - they are not really very green, but it would open the floodgates.

You can't be me, I'm taken

by Sven Triloqvist on Fri May 19th, 2006 at 02:15:49 PM EST
[ Parent ]
Chevron has been running ads for "awareness" in some sense... What exactly, except for the liability issue, could the oil company expect in returns for those moves ? Look like "right guys" ? Stabilize demand and prices for the best of everyone ? Dunno. It certainly is better if oilcos testify about energy scarcity / climate change issues.

by Pierre on Fri May 19th, 2006 at 03:45:49 PM EST
[ Parent ]
It's about changing perceptions.

You can't be me, I'm taken
by Sven Triloqvist on Fri May 19th, 2006 at 06:03:10 PM EST
[ Parent ]
And it's about market share. If an oil/petrol company can attract more people to tank at their stations. of course they win.

But I suspect a perceptual cartel. No company wants to make the first move because such a move would be an admittance of responsibility. But it will happen...

You can't be me, I'm taken

by Sven Triloqvist on Fri May 19th, 2006 at 06:07:24 PM EST
[ Parent ]

I need a shower

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Sat May 20th, 2006 at 08:52:57 AM EST
[ Parent ]
just thinking, wouldn't some of those institutional investors have some level of investment in Insurance companies?

and wouldn't that give them cause to worry about very large scale losses, with the flooding and storm damage that may come from global warming?

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Sat May 20th, 2006 at 11:09:16 AM EST
[ Parent ]
One difficulty with this line of argument is that there are a lot of things that are profitable but demonstrably bad for people. For example, should Ford and VW be required to place ads pointing out that their cars kill more people than anything else, and that their engines are wasting a non-renewable resource, and that they are the main contributor to greenhouse gases? And should sugar companies be required to point out that eating their product is bad for everybody not in danger of starving?
by asdf on Fri May 19th, 2006 at 06:39:45 PM EST
The Competitive Enterprise Institute, which widely publicizes its belief that the earth is not warming cataclysmically because of the burning of coal and oil, says Exxon Mobil Corp. is a "major donor" largely as a result of its effort to push that position.

...even I would be supportive of the CEI. Once again, such an "independent think tank" (CEI seems copy-pasting Exxon's policy straight from the higher ups) is releasing an extremely misleading and dishonest description of the worries of millions of people. The key word here is "cataclysmically" - try to define that. It's a pretty honest description I could agree with and I have actually posted diaries in the same vein: battling some of the exaggerations that are rampant in climate science. The CEI, however, pushes an agenda that is without "cataclysmically" entirely. Bah.

From CEI:

Among numerous recognitions, Greenpeace featured Mr. Ebell and three of his CEI colleagues in "A Field Guide to Climate Criminals" distributed at the UN climate meeting in Montreal in December 2005. Rolling Stone magazine in its November 17, 2005 issue named Mr. Ebell one of six "Misleaders" on global warming in a special feature, along with President Bush, Senator James Inhofe, and Michael Crichton. In November 2004 as a result of a BBC Radio interview, seven members of the British House of Commons from all three major parties introduced a motion to censure Mr. Ebell "in the strongest possible terms." In its May 22, 2004 special Issues and Answers issue, National Journal profiled Mr. Ebell as one of ten people who would lead the global warming debate during the next presidential administration. The Clean Air Trust in March 2001 named Mr. Ebell its "Villain of the Month" for his role in convincing the Bush Administration not to regulate carbon dioxide emissions.

Just have a look at their guy... Pictures, thousand words.

by Nomad on Sun May 21st, 2006 at 03:37:23 AM EST
what's the point?  that villains can't look like Poindexter?  as I recall, George Joseph Smith was quite respectable looking and mild of manner...

Crichton's a piece of work.  Actually he wouldn't be so dangerous if he didn't have the ear of the "decider in chief" who seems to prefer Crichton's Greens-R-Turrists fiction to reality.  As we saw a couple of decades back, Science Fiction Writers Can Be Dangerous when mixed with Presidents of weak intellect:

In 1980, Jerry Pournelle talked me and Marilyn into hosting a gathering of the top minds in the space industry in an attempt to write a space program for the Reagan government, with goals, timetables, and costs. The Citizens Advisory Council for a National Space Policy met four times during the Reagan Administration, and twice since, for harrowing three day weekends. Attendees have included spacecraft designers, businessmen, NASA personnel, astronauts, lawyers. Adding science fiction writers turns out to be stunningly effective. We can translate! We can force these guys to speak English.

We've had some effect on the space program. SDI (Space Defense Initiative, or Star Wars) was drafted at our house in Tarzana. In '93 we watched the DC-X1 fly. It was a toy version of a single-stage ground-to-orbit spacecraft, and the Council generated it. Our design lost out to the current Skunk Works X-33, but the Council caused the revival of the X Program itself.

And how much did that little sci-fi sales pitch cost the taxpayers...?  I remember seeing a video interview with Niven during which he bragged about having "created" SDI, and thinking it was a very strange thing to be bragging about...

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Sun May 21st, 2006 at 04:17:34 AM EST
[ Parent ]
I long lost my respect for ties. It began when I realised that men are voluntarily wearing inverted gallows around their necks. The picture of Mr. Ebell emanates the arrogance of black suited commerce to me adhering to an ideology that is as tunnel-visioned as creationist "science".

And George Joseph Smith who? Don't know the chap. Wikipedia gives an entry on the Brides in the bath murderer, which seems to fit the profile...

by Nomad on Sun May 21st, 2006 at 04:39:37 AM EST
[ Parent ]
yes, yes i know we'll all be dead....but rich!

some things are more important than trifles like human habitat...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sun May 21st, 2006 at 08:52:46 PM EST

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