Just a few weeks into the new year, ExxonMobil has turned the page on 2017—a year of significant gains for corporate climate accountability and significant setbacks for major fossil energy companies. However, some of these companies are aggressively fighting back, continuing to spread climate disinformation and refusing to plan for a low-carbon future. ExxonMobil, in particular, has moved toward countersuing California communities that are suing it and other fossil fuel producers over climate-related damages, and launched a webpage and video attacking the #ExxonKnew campaign. ExxonMobil’s retaliation against advocates for climate action and corporate accountability is a sure sign that our work is having an impact, and that now is the time to redouble our efforts.
Here’s a look back at important 2017 developments in three key areas: science attributing climate impacts to particular companies, efforts to hold fossil fuel producers legally accountable for their role in change, and investor pressure for improved climate-related disclosure and governance—and a look ahead to what we can expect from ExxonMobil and other major fossil energy companies in 2018 and beyond. (Spoiler alert: we need to be prepared for both Dr. Jekyll and Mr. Hyde).
For more information, listen to UCS’s Got Science? podcast featuring my colleague Peter Frumhoff.
1) Advances in company climate attribution science
A UCS-led study published in September in the scientific journal Climatic Change for the first time links global climate changes to the product-related emissions of specific fossil fuel producers, including ExxonMobil and Chevron. The study found, for example, that emissions from the manufacture, extraction, and burning of the products marketed by 90 fossil fuel companies and cement manufacturers contributed nearly half of the rise in global average surface temperature and nearly 30 percent the rise in global sea level between 1880 and 2010.
Importantly, the study also quantified the climate change impacts of emissions traced to these companies’ products from 1980-2010—when major investor-owned companies knew the risks of burning fossil fuels and not only did not take steps to reduce those risks but also supported a concerted campaign to deceive the public and block action.
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This new analysis is timely, as communities in the US and worldwide are experiencing climate impacts from record flooding, extreme drought, severe wildfires, and devastating storms like Hurricanes Harvey, Irma, and Maria. Advances in climate attribution science support the argument that taxpayers alone should not have to foot the bill for climate damages and adaptation costs.
2) Moves toward legal accountability
New York City recently joined several California communities in suing major fossil energy companies over climate change-related damages. Most of the complaints focus on addressing climate-related sea level rise and preparing for future climate impacts. For example, sea level rise increased Hurricane Sandy’s flood damages to property in New York City by $2 billion, more than $230 per New Yorker, according to one study. Meanwhile, New York City officials have already estimated it will cost more than $19 billion to adapt to climate change.
The lawsuits filed by the City of Santa Cruz and Santa Cruz County were the first to call out disruptions to the hydrologic cycle caused by fossil fuel pollution, including more frequent and severe wildfires, heat waves, droughts and extreme precipitation events. This week, the city of Richmond, California—home to a large Chevron refinery—filed a similar broad complaint.
These complaints are grounded in the outsized role of fossil fuel companies in making the problem of climate change worse—not only through emissions from the burning of their products, but also through their decades-long campaign to sow doubt about climate science. As communities begin to demand that fossil fuel companies pay their fair share of harm caused by their products, the New York and Massachusetts attorneys general continue to investigate whether ExxonMobil violated any laws by deceiving shareholders and the public about climate change. (A federal judge may rule soon on whether ExxonMobil’s efforts to block these investigations can go forward).
For more information about holding fossil fuel companies liable for climate change harms in California, join a live webcast of an event this Thursday, January 25, co-sponsored by the Emmett Institute on Climate Change and the Environment, UCLA School of Law, and UCS.
3) Mounting investor pressure
It’s no wonder that investors are feeling antsy about climate risk and calling companies like ExxonMobil and Chevron to account.
ExxonMobil began 2017 by appointing a climate scientist, Dr. Susan Avery, to its board of directors—acceding to demands from shareholders to improve its corporate governance on climate-related issues.
Both ExxonMobil and Chevron faced shareholder resolutions calling for them to report on how they are aligning their businesses with global climate action. Chevron released a report, “Managing Climate Change Risks: A Perspective for Investors,” which, though short on details, bought the company more time to explain to shareholders how it factors climate change into its strategic planning. ExxonMobil shareholders, meanwhile, voted in May by a two-to-one margin to call on the company to report annually on how global measures designed to keep global temperature rise well below 2° Celsius would affect its business.
In June, the industry-led Task Force on Climate-Related Financial Disclosures (TCFD)—chaired by former New York City mayor Michael Bloomberg—reinforced the demands of ExxonMobil shareholders. In its final recommendations, the TCFD recommended that companies across all sectors and jurisdictions disclose what a 2°C or lower scenario would mean for its business, strategies, and financial planning. Royal Dutch Shell was among more than 100 companies that supported the TCFD’s final recommendations.
In December, on the eve of the deadline for submission of shareholder proposals for consideration at the company’s 2018 annual meeting, ExxonMobil pledged in a filing to US securities regulators that its board will provide shareholders details on climate change risks and impacts to its business. However, the filing raised more questions than it answered. Take action here to tell the company what you expect to see in its report.
At the other end of the socially responsible investing spectrum, fossil fuel divestment is also gaining traction. In March, the Barnard College Board of Trustees took an innovative approach to divestment, voting to divest from all fossil fuel companies that deny climate science or otherwise seek to thwart efforts to mitigate the impact of climate change. In December, Barnard announced the criteria it will use to assess a fossil fuel company’s position on climate change, working with Fossil Free Indexes and UCS toward the release of a public list in spring 2018.
Divestment momentum continues into 2018, with New York City announcing that its pension funds plan to divest $5 billion in fossil fuel investments.
4) Crumbling public trust
In March, Shell CEO Ben van Beurden admitted, “Trust has been eroded to the point where it is an issue for our long-term future.”
In 2017, several major fossil energy companies took baby steps away from the deception and disinformation that cost them the public’s trust.
- ExxonMobil was one of many companies that urged President Trump not to withdraw the US from the Paris Climate Agreement.
- BP, ExxonMobil, and Shell endorsed the Climate Leadership Council’s proposal for a carbon tax (albeit without a concrete advocacy plan).
- BHP Billiton Limited reported on misalignment between its climate-related positions and those of trade associations of which the company is a member—and based on its review, pledged to get out of one group, reconsider its membership in another, and put a third on notice about the inconsistencies it identified.
- ExxonMobil publicly pressured the American Legislative Exchange Council to refrain from drafting a sample resolution against the Environmental Protection Agency’s 2009 finding that greenhouse gases are endangering the planet.
Lest we lapse into complacency that we are dealing with Dr. Jekyll, ExxonMobil’s aggressive counterattacks against public officials, communities, and civil society organizations are a reminder that Mr. Hyde can still emerge. Ultimately, both corporate personas are a response to growing pressure from advocates—including UCS experts and supporters.
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