The week before the ExxonMobil Corporation’s recent annual shareholders meeting, several hundred of the mega-corporation’s executives, investors and analysts received a disconcerting piece of mail: an ExxonMobil-logo’d envelope labeled “Revised Annual Report Enclosed.” In a cover letter, ExxonMobil chairman and chief executive Lee R. Raymond explained: “I know you already received a copy of our 2002 annual report. As I am sure you realized, a number of errors were contained in the document. I apologize for printing and distributing an inaccurate report, but the revised version contained herein is updated and corrected.”
Although it substantially resembles the company’s 2002 report, the accompanying brochure was clearly a hoax. The three globes adorning the report’s cover have burst into flames. ExxonMobil’s slogan has been rendered: “Still Staying the Course … Yesterday, Today and Last Century.” (On closer inspection, Mr. Raymond’s letter shows signs of mockery, too. It concludes: “It is no coincidence that my name is an anagram for Dr. Real Money.”)
Inside the glossy brochure, the usual metrics and glowing references to the company’s achievements have been replaced with satire. A list of “Performance Highlights” includes “Carbon dioxide emissions at an all time high”; “Challenges for the Year Ahead” features a snapshot of protesters occupying an Esso filling station in Luxembourg; ExxonMobil board of directors member Henry (Hank) McKinnell Jr. testifies that “I love my SUV and I love global warming”; and there’s Mr. Raymond again, boasting that “our vision is a never-ending supply of fossil fuels, and we believe that we can extend the life span of oil, perhaps indefinitely, by drilling ever deeper into the earth’s core.”
Produced by Greenpeace (the activist organization ‘fesses up on page 11), the faux annual report presents Exxon-Mobil, the world’s top-grossing oil and gas company (and No. 2 petrochemical concern), as an environmentalist’s nightmare, a corporation in deep denial about the risks posed by climate change, spending millions to prevent curbs on carbon-dioxide emissions, and misleading the public and elected officials on the subject. To Greenpeace, Exxon-Mobil presents “the best boycott target since Pepsi got out of Burma.”
Not surprisingly, the report didn’t go over too well at ExxonMobil’s Irving, Tex., headquarters. “There were some who felt tricked by it, because they used envelopes with the ExxonMobil logo on it, but mostly what we’ve heard [from recipients] is real annoyance,” says Tom Cirigliano, a ExxonMobil spokesman. “It’s typical of Greenpeace. It’s a cheap gimmick-long on publicity, short on fact.” Lawyers for ExxonMobil, Mr. Cirigliano said, were “taking a look at” a possible lawsuit over illegal use of the company’s trademark. But, he added, “We might be better off ignoring it, it’s of so little value whatsoever. My only real concern was if they sent it to The New York Times . They might think it was the real thing.”
Mr. Cirigliano dismissed Greenpeace’s complaints. “Our position remains that climate change may prove to be significant,” he said, “which is why it’s critical that studies continue, and why, regardless of whether [global warming] is from man-made factors or cyclical factors, we’re working to reduce air emissions.” He said ExxonMobil supports the transparent reporting of carbon-dioxide emissions and has, over the last 25 years, reduced its own such emissions by 200 million metric tons. Mr. Cirigliano also said that the $200 billion firm was investing heavily in new, cleaner technologies. He noted that last year ExxonMobil donated $100 million to Stanford University for research into energy systems which “have the capability of substantially reducing greenhouse emissions”-including the hydrogen fuel cells mentioned in President Bush’s State of the Union address. “While Greenpeace is spending money on fake reports and running around in tiger costumes,” Mr. Cirigliano said, “we have already done more than Greenpeace ever will to reduce emissions.” (Demonstrators dressed as tigers-remember the old Esso mascot?-attempted to disrupt ExxonMobil’s May 28 shareholder meeting.)
Greenpeace research director Kert Davies said that he and his colleagues chose to target ExxonMobil’s leadership and investors for two principle reasons: first, because government regulation seems improbable at this point (“The Bush administration’s policy mirrors ExxonMobil’s,” Mr. Davies said); and second, because in the last two years especially, environmental activists pressuring ExxonMobil on climate change have been joined by a wide array of shareholder groups and economists, such as London’s Claros Consulting, Boston’s Coalition for Environmentally Responsible Economies and Austin’s Campaign ExxonMobil. A few of these organizations provide research to shareholders on proxy-vote issues; others represent pension funds and other major institutional investors. All have turned up the heat on ExxonMobil.
“ExxonMobil, to its credit, has been very clear on its strategy regarding climate change,” says Doug Cogan, deputy director of social-issue services at Washington, D.C.’s Investor Responsibility Research Center. “Where it’s gotten into trouble is in its combative stance, and in challenging the science. That’s what has made it a lightning rod.” As a research analyst, Mr. Cogan declines to “take sides,” but allows that he has detected a clear pattern in his scrutiny of the company. Alone among oil’s big four (which also includes British Petroleum, Shell and ChevronTexaco), ExxonMobil and its chief executive continue to seize on obscure opportunities to discredit the consensus view among climate scientists that global warming is in large part caused by human activity, and fossil-fuel combustion in particular.
Peter Altman, the national coordinator of Campaign ExxonMobil, is less impartial. He contends that the oil giant’s position on climate change places shareholder value at risk. “The financial community is becoming aware of this issue, so it concerns their reputation as well as their long-term profitability,” he said. For example, insurance firms, Mr. Altman asserts, have begun to recognize that global warming will impact agribusiness. As such, it represents staggering liability potential. What’s more, he says, ExxonMobil has been losing ground to B.P. and Shell on sustainable sources of energy, such as solar and wind power. Mr. Altman characterized the company’s grant to Stanford as “spit in a puddle …. It’s one-tenth of 1 percent of what they will spend exploring for new oil. And the contrast tells you what their pre-set agenda is.”
Mr. Altman, who says he’s in this for the long haul, championed three resolutions on the proxy card at the May 28 shareholders meeting, two of which specifically addressed climate change and renewable energy.
Pat Daly, executive director of New York’s Tri-State Coalition for Responsible Investment, attended the meeting. Her organization backs Campaign Exxon-Mobil. She voted in favor of the resolution calling for a report on climate-change risks. It received 22.2 percent of the vote-not enough to pass, but enough to keep it on the ballot for 2003. Ms. Daly considered this “a win,” but noted that the resolutions are nonbinding, and that it would likely take 90 percent of the vote to persuade ExxonMobil’s board to take action. She also said a campaign for divestiture on this issue didn’t seem likely any time soon.
Ross Gelbspan, a former Boston Globe reporter and the author of The Heat Is On , an exposé of how coal and oil interests have funded junk science to “refute” those industries’ contribution to global warming, says that it’s clever of Greenpeace to parody ExxonMobil’s official communications. In 1998, he notes, a report designed to look as though it had been issued by the National Academy of Sciences was circulated by the Washington, D.C.–based Marshall Institute. The report raised doubts about climate change, and was taken seriously by journalists and members of Congress-until, that is, the N.A.S. saw it and denounced it.
“ExxonMobil continues to act like there’s a debate over this-and because the press is used to giving both sides, it does,” Mr. Gelbspan says. “But that’s like giving the tobacco companies equal room in every story on the health effects of cigarette smoking.” The United Nations’ Intergovernmental Panel on Climate Change, Mr. Gelbspan emphasizes, receives input from 3,500 scientists in 120 countries. “In what amounts to the world’s most rigorously peer-reviewed research in history,” he said, “they concluded that we need to reduce carbon-dioxide emissions by 70 percent.” If ExxonMobil is as committed as Mr. Cirigliano says to reducing emissions, Mr. Gelbspan asks, why did it successfully petition President Bush to dismiss the IPCC president, Dr. Robert Watson? Mr. Gelbspan notes that the corporation still donates more than $1 million a year-as revealed in the Form 990 I.R.S. filings of Houston’s ExxonMobil Foundation-to “greenhouse skeptics.”
In response, Mr. Cirigliano points out that ExxonMobil and the Bush administration were not the only ones opposed to the IPCC’s recommendations and the Kyoto Protocol: “The U.S. Senate voted against it, too, 95 to 0. And when does that ever happen?” He added that ExxonMobil supports independent organizations that “broaden the debate” on climate change. (On May 28, he told The New York Times that those, like Ross Gelbspan, who consider the debate closed are guilty of “the kind of dark-ages thinking that gets you into a lot of trouble.”) Mr. Cirigliano also called Mr. Altman’s suggestion that ExxonMobil had fallen behind B.P. and Shell on alternative energy “extremely naïve.”
“We were the first major energy company to pursue renewables 25 years ago,” he said. “But we found they had too many disadvantages. The future is not going to come from these ancient technologies, like the solar panels B.P. is spending $5 billion on, or wind farms.
“The future,” Mr. Cirigliano continued, “is going to come from new technologies, and that’s what we’re investing in and continue to be a leader in. Other companies try to say the right things, but no other company is placing more time and money and effort in the technologies that will reduce emissions, and be economically and socially acceptable. If you go to the developing world, which is a priority for us, you have to provide a sound economy first. Concern over the environment falls to the bottom of the list.”
Brad Wieners is a columnist for Business 2.0 and correspondent to Outside . He lives in New York.