Rockefeller Family Fund to Divest From ExxonMobil, Says Oil Giant Is ‘Morally Reprehensible’
This article originally appeared in Alternet.
It’s been a really rough few days for ExxonMobil, the world’s largest publicly traded oil and gas company.
First, on Wednesday, the Rockefeller Family Fund announced it would divest from the oil giant, saying it would “eliminate holdings” of Exxon Mobil Corporation (XOM.N) “effective immediately,” asserting that the company associated with the family fortune has misled the public about the risks of climate change.
Because of the long-established threat posed to the planetary ecosystem by fossil fuel extraction and use, the fund said “there is no sane rationale for companies to continue to explore for new sources of hydrocarbons.”
— Bill McKibben (@billmckibben) March 24, 2016
In a letter posted on its website, the fund slammed Exxon’s conduct as “morally reprehensible.” They write:
Evidence appears to suggest that the company worked since the 1980s to confuse the public about climate change’s march, while simultaneously spending millions to fortify its own infrastructure against climate change’s destructive consequences and track new exploration opportunities as the Arctic’s ice receded.
Exxon tried to frame the fund’s move as unsurprising. In a statement, Exxon spokesman Alan Jeffers said, “The Rockefeller Family Fund provided financial support to InsideClimate News and Columbia University Journalism School which produced inaccurate and deliberately misleading stories about ExxonMobil’s history of climate research.”
But Stacy Feldman, executive editor of InsideClimate News, stands by those stories. “Exxon has never specified what is inaccurate or misleading in the series, nor has it requested any corrections,” she said in a statement. “But our investigation of Exxon’s climate duplicity has won five national journalism awards.”
The day would only get worse for the multinational energy firm, as the Securities and Exchange Commission ordered a vote on a shareholder resolution that would require the firm to disclose how climate change—or regulations meant to combat it—would impact the stability of the company’s finances.
— climatehawk1 (@climatehawk1) March 24, 2016
The SEC’s move comes just weeks after an investigation by the Government Accountability Project, which revealed that, for years, Exxon had lied to the SEC in its 10-K filings.
“Exxon has done a masterful job of hedging its bets, both by omission and commission: omitting mere mention for many years, and then grossly understating, the vast array of direct and indirect risks it faces as a result of climate change,” said Climate Science & Policy Watch, a GAP program that promotes governmental integrity in the use of climate science. “Even worse, Exxon has overtly and flagrantly overstated possible financial and economic risks associated with regulating carbon and other GHGs, both here in the U.S. and in nations around the world.”
On Thursday, Exxon got even more bad news. New Jersey State Senator Raymond Lesniak called on Acting Attorney General Robert Lougy to join an investigation launched by New York Attorney General Eric Schneiderman. California Attorney General Kamala Harris opened a similar probe.
The investigations just keep piling up. The FBI’s criminal investigation unit is currently conducting an initial review of evidence that Exxon knew about the “catastrophic” impacts of climate change.
While the problems and negative press continue to mount for Exxon, traders remains fairly bullish on XOM stock.
“Even if oil prices would retreat in the upcoming weeks, it is still not the right time to sell Exxon shares,” research analyst Arie Goren wrote Monday on Seeking Alpha. “In my opinion, XOM’s stock is an excellent long term investment. … Although Exxon’s dividend yield is lower than that of the other supermajor integrated oil & gas companies, it is sustainable, in my view.”
But sustainability on the stock market is very different from sustainability in the environment, and ethical investors increasingly want nothing to do with the oil industry.
The Rockefeller Fund’s announcement follows the recent decision to divest by a prominent Rockefeller, Neva Rockefeller Goodwin, who serves as the co-director of the Global Development and Environment Institute at Tufts University. In my interview with Goodwin last month, she noted the patently illogical stance that may undergird the decision-making at Exxon and other fossil fuel firms that continue to put profit above the planet:
From casual observation it appears that there are people with a reasonable sense of morality who steer their companies to do pretty immoral things. Evidently such people erect a firewall between their personal and business ethics.
Goodwin also points out that a more sustainable and sensible alternative to doing business exists:
There is a slowly growing movement to point out the ways in which what is commonly accepted as decent morality is also good for business. For example, the “Porter hypothesis” suggests that good environmental ethics tend to be efficient and cost-saving for business. There is considerable evidence that this is correct. Other kinds of ethics may be less clearly related, positively or negatively, to profits. An important role for government is to create an environment in which socially good behavior does not hurt the company, and in which the kind of behavior that creates what economists call “negative externalities” is not profitable.
In its letter, the Rockefeller Family Fund emphasizes its support for the overwhelming science on the effects of climate change and what must be done to prevent its worse potential impacts:
The science and intent enunciated by the Paris agreement cannot be more clear: far from finding additional sources of fossil fuels, we must keep most of the already discovered reserves in the ground if there is any hope for human and natural ecosystems to survive and thrive in the decades ahead.
“For decades, Exxon has done everything in its power to cover up the impact climate change would have on its business and the planet—those chickens are finally coming home to roost,” said Jamie Henn, communications director for 350.org. “Exxon is increasingly caught in its own web of deception. Instead of addressing climate change when they first found out about it decades ago, the company has aggressively pursued a business path that is incompatible with a livable planet. That’s opened them up to divestment, regulation, and now, potential prosecution.”
All of this activity centering around Exxon’s malfeasance suggests that the momentum is growing behind the #ExxonKnew campaign, which is calling on state AGs across the nation to join New York and California in opening investigations into the energy giant.
With total assets at nearly $350 billion, ExxonMobil is one of the world’s biggest companies. It has the resources to change the script; to invest more heavily in renewable energy and green jobs to help move the nation and the world toward a low-carbon future. But will it? As the pressure mounts for the company on multiple fronts, it may have to.
“If Exxon doesn’t show how it plans to adapt its business to a carbon constrained world, it’s time for shareholders to divest,” said Henn. “There’s no other responsible option.”
“Climate change will increasingly cause events like hurricanes that will destroy large swathes of property, kill numbers of people, make many homeless,” Goodwin told me. “In the long run, producers of fossil fuels will have to lose. The only question is how much the people and ecologies of the world will lose before our economies cease to make the situation worse.”
h/t Kyle Moler