Will Changes at ExxonMobil Lead to More Social Responsibility on Climate Change?

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INCOMING: CEO Darren Woods; Source: ExxonMobil

INCOMING: Susan Avery; Source: NASA

Three recent changes at the Exxon Mobil Corporation could lead to meaningful and much needed improvements in corporate behavior and attitudes towards the growing existential threat of climate change and broader environmental concerns – or they may not. Only time will tell. New developments – a brand new CEO, Darren Woods, at the helm; a new board member, Susan Avery, with climate expertise and top credentials as an atmospheric scientist; and the sudden resignation of an advisory panel member, Sarah Labowitz, in protest of ExxonMobil’s unsubstantiated claim in court that the normal engagement of NGOs with public officials amounts to “an illegal conspiracy” – could prove to be a combined force serving to raise the company’s overall failing grades in corporate social responsibility. Or not. We are cautiously pessimistic.

OUTGOING: Sarah Labowitz; Source: NYY Photo Bureau

Widely known (even among its peers in the oil and gas industries) for its corporate culture marked by stubborn recalcitrance and hard resistance to external pressures – especially those related to carbon emissions resulting from the products it sells when used as intended – these new forces may not be strong enough to overcome the heavy inertia of this oil giant. Woods is a virtual unknown; Avery is just one board member of thirteen; and Labowitz’s departure letter, while elegantly clear in its condemnation of Exxon’s use of vicious attacks in reaction to being the subject of multiple investigations, could easily fall on deaf ears. Moreover, even larger forces will now be at play: its newly departed CEO and board chair Rex Tillerson, now freshly confirmed as US Secretary of State, can be expected to favor more oil drilling over drilling down on keeping and improving international climate agreements. CSPW will continue to keep a close eye on things and report back on any changes in the corporate culture we observe: good, bad, or ugly.

ExxonMobil’s New CEO
We don’t know very much yet about Darren W. Woods, ExxonMobil’s new CEO and board chair. According to his corporate bio, he is 52 years old, he joined the company in 1992, and has spent most of his time in the chemical and refining part of the operation – not in the upstream portion which deals with oil discovery and extraction. His unfamiliarity with the drilling arm of the oil giant, combined with his relatively young age for a chief executive, could prove to be beneficial. It is possible that he is not as “indoctrinated” as his predecessors into the older-school culture that emphasizes maximizing volume and profit at the expense of other priorities, such as human health and the environment. He may also be more aware that it is important to save some of the oil underneath our feet for petroleum-based products, such as plastics, rather than seeing it all go up in smoke as fuel for combustion in engines and heating systems.

Incoming:  New Board of Director Member, Susan Avery
In what was to many a surprise announcement, the Exxon Mobil Corporation has elected atmospheric scientist Susan Avery to its board of directors, reversing its prior position stated as recently as April 2016, expressed in a “proxy statement” that included its formal responses to shareholder resolutions. ExxonMobil stated unequivocally that a climate scientist was not needed because its current board members already had the ability to address climate-related issues, a statement that had been issued for several years previous. It is not known what inner workings may have precipitated the change of heart, other than the fact that ExxonMobil is now under the leadership of a new chief executive officer. It’s also possible that the company could be tossing bones to an increasingly agitated set of shareholders and consumers at large who take issue with the company’s greenwashing and stubborn refusal to take the climate problem by the horns and deal with it honestly and squarely. Nevertheless, the news was exuberantly welcomed by the Rev. Michael Crosby, who directs the Interfaith Coalition for Responsible Investment. Crosby crafted, and has been pushing for several years running, a shareholder resolution urging ExxonMobil to appoint a climate change expert to the board of directors.

ExxonMobil’s media relations manager, Alan Jeffers, commented on the move, as quoted in an interview with Eos magazine:

“We are delighted to add Dr. Avery’s scientific background and expertise, as well as her management experience, to the board of directors. ExxonMobil is a science-based company with a long-standing technical and scientific foundation, which will be complemented by Dr. Avery.”

Jeffers neglected to mention that at least half of the board members hail from big industry names like Merck, Nestlé, Caterpillar, Xerox, PepsiCo, and Johnson & Johnson. He also failed to mention that board member Michael J. Boskin, who served as George W. Bush’s chairman of the Council of Economic Advisers, was one of the key culprits of that administration’s consistent exaggeration of the uncertainties in climate science as a means for stymieing legislation that would curb carbon dioxide emissions. This strategy was essentially a 1980s brainchild of ExxonMobil and the mega-trade association to which it belongs, the American Petroleum Institute.

So, for Avery, it will be an uphill battle, but her impeccable credentials make her a good choice and give us cause for some optimism. She is most known for having served as the president and director of the Woods Hole Oceanographic Institution from 2008 to 2015. She sits on the National Academy of Sciences panel that oversees and advises the governance of the U.S. Global Change Research Program (USGCRP, temporarily renamed the Climate Change Science Program under Bush). In 2013 Dr. Avery was invited to join the Scientific Advisory Board of the United Nations Secretary-General. A known quantity and well-respected and revered in climate change science and policy circles, she is also well-regarded for her willingness to go out of her way to mentor students and less experienced colleagues, according to some of our sources.

Avery has ties to CSPW through Rick Piltz’s role at the USGCRP Coordination Office during the George W. Bush Administration as the point person responsible for the final editing and preparation for publication of federal reports on climate science. In 2003, through NOAA, Avery contributed to the drafting of a ten-year national Strategic Plan for climate research. Non-scientist political appointees in the Bush White House, most notably CEQ Chief of Staff Philip Cooney, made hundreds of edits to the Plan, each of which was designed either “to manufacture or elevate existing scientific uncertainties” or “to delete or downplay evidence of the human effect on global warming,” as reported in our recent CSPW White Paper. Cooney also made sure that no mention was made of the 2000 National Assessment on Climate Change Impacts, a report that became the target of conservative groups with ties to the oil industry and was suppressed by the Bush White House. Dozens of these edits survived final scrutiny.

Fully aware of this type of politically-motivated censorship by an administration friendly with the fossil fuel industry, Avery is no stranger to oil company meddling into federal climate science communications. While the brash brand of direct interference into the public discourse on scientific findings about global warming and associated harmful impacts we saw from Exxon operatives in the 1980s and 1990s has now morphed into a more passive, less-visible form of tampering – such as the company’s continued stream of donations (some alleged to be illegal) to groups known for lobbying against and often shooting down federal and state-level proposals to promote renewable energy and limit carbon emissions – perhaps Avery will be able to persuade the new corporate leadership team to stop funding these groups altogether. ExxonMobil should also be strongly urged to go beyond its tepid support for a carbon tax and use its political muscle to push for policies that will result in significant emissions reductions and safer levels of atmospheric carbon dioxide. Advocates for sensible policies to address the mounting climate threat, CSPW included, have their fingers and toes crossed, hoping that her presence will help alter the course of this behemoth ship, if only incrementally.

Source: Screenshot from ExxonMobil website, February 14, 2017

Outgoing: External Citizenship Advisory Panel member, Sarah Labowitz
In an elegantly written letter dated February 6, 2017, corporate social responsibility expert Sarah Labowitz resigned her post on ExxonMobil’s “External Citizenship Advisory Panel,” created in 2009 to invite constructive criticism of the multinational corporation’s overall impact on civil society, human rights, democratic governance and the environment from experts in those areas. She cited as motivation for quitting her objection to “the kind of vehemence and aggressive attack strategy that Exxon has executed over the last year” toward state attorneys general with open investigations of ExxonMobil and over a dozen non-for-profit groups (such as the Union of Concerned Scientists) and individuals who have been in communication with them over the corporation’s decades-long role as champion of climate denial. She made specific reference to the legal brief Exxon filed in a Federal District Court in Texas “advancing an argument that everyday aspects of civil society advocacy with public officials should be treated as an illegal conspiracy.”

A co-director for the Center for Business and Human Rights at the NYU Stern School of Business, Labowitz studies companies facing significant human rights challenges. She found herself having to defend fundamental democratic principles of free speech and activities associated with normal discourse such as “having a private meeting, conducting a workshop, publishing a report, or advocating that a public official take action” and underscored the importance of these activities in her own work at various NGOs and in academia – and as a staff member at the State Department. (We hope Mr. Tillerson has read her letter.) Given that top members of this new administration appear to be careening at full tilt toward authoritarian rule, and ExxonMobil’s strong presence in many countries around the world, Labowitz gets extra points, in our view, for noting the critical value of such discourse “in countries where governments sought to suppress their rights to freedom of association, expression, and assembly.” Touché.

“Many companies face criticism and critique, but few respond with the kind of vehemence and aggressive attack strategy that Exxon has executed over the last year,” Labowitz admonished Ben Soraci, President of the ExxonMobil Foundation and General Manager of Public and Governmental Affairs. She picked up on ExxonMobil’s well-established reputation as an outlier – even among its industry peers – in noting that plenty of large corporations opt to take a more earnest, transparent tack in the face of harsh public scrutiny and criticism. Not too dissimilar from the way a parent or teacher might take a child aside to talk about bullying, she reminded the bigwigs at ExxonMobil that “there are much more effective and constructive ways to respond to such criticism.” The court of public opinion is already judging ExxonMobil harshly; one would think that a company this big and this old would not have to be reminded that it is against its own long-term interests to “win the legal argument at the expense of its reputation and the public’s trust.” This is not rocket science.

We agree that ExxonMobil, as a major carbon emitter on the global scale, needs to be a more credible participant in the global dialogue regarding the climate threat, which would mean essentially doing another 180-degree turn back toward the curiosity-driven, honest approach to climate change it took back in the 1970s. What was done once can be done again. Admitting disappointment that her own efforts over two-plus years to bring about a more positive corporate culture had largely failed took real courage; vowing to continue her campaign from outside took even more.

We join Sarah Labowitz in urging the new CEO Darren Woods, Ben Soraci, and other members of the ExxonMobil corporate leadership team to “get on with the business of developing sound solutions to a warming planet.”

 

CSPW Senior Climate Policy Analyst Anne Polansky has 30 years of experience in public policies relating to energy and the environment, with a strong focus on climate change and renewable energy. She is a former Professional Staff Member of the House Committee on Science, Space and Technology.

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