Last month, I attended ExxonMobil’s annual shareholder meeting in Dallas, Texas, at the invitation of UCS and Mercy Investment Services, the latter of which holds company shares and therefore has the right to speak directly to the officers and board of the company in support of or opposition to shareholder proposals and other aspects of the company’s business. I joined a group of representatives from the faith community, steelworkers union, and investment community who presented and spoke on behalf of resolutions calling for the company to acknowledge and account for climate change.
Taking on Tillerson’s recent comments on climate
At last year’s meeting, ExxonMobil CEO Rex Tillerson responded to a shareholder question indicating that he did not think the results of climate models were sufficiently reliable for policymaking and, in any case, his view is that technical and engineering solutions will be found to overcome all impacts, as has been the case in the past. I prepared my comments to address Tillerson’s comments head on in my statement:
In DOE’s major, widely peer-reviewed 1985 climate change assessment, Exxon’s leading climate change scientist for the past several decades, Dr. Brian Flannery, co-authored the chapter on projecting climate change. His chapter concluded that “climate models currently available, when run with standard scenarios of fossil fuel CO2 emissions, indicate a global warming of the order of 1ºC by the year 2000, relative to the year 1850, and an additional 2º-5ºC warming over the next century.” That projection was made three decades ago and is still the case today.
Indeed, improving models and having more data and computer resources available has been helpful in working out many details, but the top-line conclusions have held up very well. The main reason for the range in model simulations that you [Tillerson] cited is not uncertainties in the models, but the energy technology choices that society will make.
With respect to the potential for adapting, all major assessments make clear that, in the absence of sharp emissions cuts, the challenges of adapting will be very severe. As just three examples, loss of biodiversity, breakup of ecosystems, and the rise in sea level will be large and essentially irreversible. Indeed, several leading economic studies make clear that the conditions will be so serious that replacing the world’s fossil fuel energy system would reduce the risks and be less costly than adapting to the impacts of not doing so.
IPCC’s climatic and environmental projections and the Paris Agreement now represent the international consensus for how we must move forward. My question is what the due diligence analyses that I assume ExxonMobil has conducted show for the internationally desired scenario and what sorts of analyses have been done for both more gentle and more severe scenarios of climate disruption and emissions contraction?
My private exchange with Tillerson
Kathy Mulvey (second from right) and I (far right) joined other concerned shareholders at ExxonMobil’s annual meeting in Dallas. Photo: Mollly Rooke.
In the lobby before the meeting started, Kathy Mulvey of UCS and I happened to encounter Tillerson himself. On the issue of climate change, he indicated that to understand the science, one has to skip past the IPCC Summary for Policymakers (SPM) and read the detailed science chapters that explain how little is really understood, suggesting that no one but himself seems to read the chapters.
I responded that the chapters were written using the hypothesis-testing framing traditional in the sciences where it takes, for example, two-sigma significance to support a finding, whereas the SPM was written using a relative likelihood (or relative confidence or relative risk) framing that is what society and business use in their decision-making and risk management practices.
Tillerson then pivoted to say that he has seen the poor and starving around the world who need energy, something he suggested we had not; again we took exception and described their particular vulnerabilities to climate change.
His comments made clear that during the public comment section I needed to also call out Tillerson’s ‘win now and technology will surely save us’ perspective (which, given the limits of technology to deal with many of the impacts is really a win-lose strategy) and instead urge adoption of a win-win strategy of providing people with carbon-free energy now so that their future will not be destroyed.
No surprises here: Tillerson’s prepared remarks
In Mr. Tillerson’s overview of the company’s status and performance, he proudly described ExxonMobil’s performance in an environment with volatile prices; progress on new fossil fuel extraction and production; a further increase in the dividend; and more. He also insisted that ExxonMobil’s projections of future demand for fossil fuels were consistent with the emission reduction commitments made at the Paris meeting.
It all sounded very positive because of what he had left out. For example, he did not point out that the Paris commitments, even if fully implemented, will lead to a global warming of order 3.5ºC by 2100, so way above the 1.5–2.0ºC Paris objective, nor did he mention that ExxonMobil’s global demand projections are well above those of other major oil companies, nor that they had borrowed money to pay its ever rising dividend. Clearly, the shareholder meeting was a day for positives, not the threats to their diminished bottom line the shareholder activists wanted to have presented.
Tillerson’s non-response on climate change
During the public comment period, I defended the model projections and indicated that the new scientific findings suggest that future impacts could well be greater than reported in the latest IPCC assessment (e.g., faster sea level rise, altered weather, etc.), and that meeting the Paris temperature objectives would require even greater carbon constraints than set out in pledged emissions cuts to date.
Mr. Tillerson, in response, claimed there was no difference between the views of IPCC and ExxonMobil except on solutions—a statement that I found astounding, as it would seem to indicate acceptance of both the climate change science and the scientific findings on impacts and the limits of adaptation. However, he then explained that even the IPCC said that there was no scientific basis for setting the 2ºC target—that while he could accept it as a societal objective, there was no science behind it. He then repeated his earlier statement that he and the company take pride in supplying energy to the poor in the world (failing, however, to mention that the cost would be lower if overall global demand is reduced—that is the way supply and demand works!).
After the not unexpected applause died down for his non-response I explained that, while choosing the 2ºC value was somewhat arbitrary in that the impacts curve is more or less exponentially upwards, there were very important impacts occurring at well less than 2ºC, so that value actually represents a rather high upper limit. I wondered later if it might have been better to note that, especially as leader of a petrochemical company, he should more deeply understand how very different the high-CO2 concentration climates were in the past that had fostered growth of the vegetation that became fossil fuels.
ExxonMobil still downplays the importance of climate change and its impacts
Unfortunately, though not surprisingly, ExxonMobil’s leadership remains nearly blind to what an increasing proportion of its shareholders are seeing. Their leadership projects that the next 25 years will be much as in the past, with continued heavy reliance on petroleum and no unmanageable impacts to society (or its operations) from climate change. One can only hope that the next time Tillerson visits ExxonMobil’s Baytown refinery near increasingly flooded Houston, he will at least start to reconsider.