Deception, delusion and double standards in fossil fuel shareholder meeting season

Staff Counsel Eugene Kung, spokesperson Reuben George of Tsleil-Waututh Nation, and a representative from SumOfUs deliver a petition of 60,000 signatures to Kinder Morgan at the oil giant's AGM in Texas, 2015. 

Staff Counsel Eugene Kung, spokesperson Reuben George of Tsleil-Waututh Nation, and a representative from SumOfUs deliver a petition of 60,000 signatures to Kinder Morgan at the oil giant's AGM in Texas, 2015. 

The spring and early summer of each year signals a wave of annual general meetings and shareholder gatherings for corporations the world over. AGM season this year was a tough one for fossil fuel companies, who had to field difficult questions from stakeholders and shareholders alike about their energy policy and business practices.

Climate change stormed agendas, interventions and shareholder resolutions in what some called a "significant shareholder revolt on climate change." In the wake of escalating climate impacts around the world as well as the much-lauded Paris Agreement in December 2015, the chasm between what climate science tells us and the actions of the fossil fuel industry looms large.

According to a series of blog posts by the Union of Concerned Scientists (UCS) who attended many of this year's AGMs, major climate-related issues tabled by shareholders this year included climate deception, lobbying ties, emissions targets and downright delusion about the kind of action needed to keep emissions in line with global temperature targets. Tsleil-Waututh Nation, a First Nation from British Columbia, also brought the issue of Indigenous Rights and Title into a Texas meeting room, and nonprofit groups SumOfUs and West Coast Environmental Law supported, participated, and brought up issues in meetings as well.

Climate deception

Climate deception featured strongly in discussions at this year’s meetings, likely in light of recent findings showing that the fossil fuel industry has participated in active deception since it had knowledge of climate change – as early as the 1960s. ExxonMobil, target of the now-international ‘Exxon Knew’ campaign, is today’s most well-known face of climate deception. The company had access to the most up-to-date climate science, had staff scientists on board, and conducted cutting-edge scientific research on the effects of climate change, but worked actively to amplify and exaggerate the uncertainties within the science in an effort to distort public opinion. First exposed in an investigative series by Inside Climate News in 2015, the evidence of Exxon’s history of public deception has since drawn widespread attention from the public and the business world alike.

But it’s not just Exxon. A report by UCS traces internal industry memos, reports and other evidence to show that the major fossil fuel companies – Shell, BP, ConocoPhillips, Chevron, Exxon – worked together to carry out carefully-planned deception campaigns, using the institutional protection of ALEC and WSPA to do sustained advocacy and media manipulation. They even used tactics as bizarre as creating fake pro-oil grassroots groups and forging letters opposing climate change legislation from real nonprofits to members of congress. An exposé by the Centre for International Environmental Law, called Smoke and Fumes, also provides a detailed paper trail of deception within the fossil fuel industry, and makes an apt comparison to the tobacco industry, which historically engaged in similar tactics.

Lobbying ties

In the meetings this year, many of the largest fossil fuel companies in the world also came under fire for their close ties with political lobbying groups, namely, the American Legislative Exchange Council (ALEC) and the Western States Petroleum Association (WSPA).

ALEC is a voluntary membership organization of U.S. state legislators "dedicated to the principles of limited government, free markets and federalism”. It has long been controversial for its role in allowing corporations a seat at the table in drafting model legislation, earning it the reputation of being a “corporate bill mill”. Funded almost entirely by industry, ALEC has put forth a steady slate of right-wing legislation, reports and other materials. It has infamously promoted climate denial and the controversial “Stand your ground” legislation (the bill that protected Trayvon Martin’s killer) in the US. Fossil fuel members of ALEC have included British Petroleum, ConocoPhillips, Occidental, Shell, Chevron and Exxon. Many of these have publicly cut ties with the organization after facing scrutiny for the conflict of interest.

WSPA is a trade association of petroleum companies that has been active for over a hundred years (since 1907) in the western United States. In 2014, WSPA spent $8.9 million on lobbying efforts against climate and fracking legislation alone, and over $31 million on lobbying altogether. The Association has come under fire for its lobbying expenditure, its links to mainstream media, its pro-oil and climate denial campaign spending, its presence on regulatory panels and commissions, and its infamous creation of a network of “astroturf” groups to oppose environmental law reform. 

Shareholder concern about lobbying ties and climate-related lobbying efforts is growing as well, and it’s showing inside shareholder meetings, UCS reports. This year, Canadian oil giant Suncor shareholders faced an unusual choice when, at the annual general meeting, US-based corporate accountability group SumOfUs tabled a proposal calling for the Calgary-based energy giant to fully disclose all money spent on government lobbying efforts. The proposal followed several months of campaigning in support of the resolution. Surprisingly, upon voting, 40% of the shareholders in the room agreed. Chevron and Exxon faced similar shareholder proposals, with 38% of Exxon’s shareholders voting in favour.

Meeting the targets

This year’s shareholder season also revealed that despite the global conversation about climate change and the undeniable math of how much oil needs to stay in the ground (80%), the fossil fuel industry continues – in shareholder settings – to pursue its narratives of the past; namely, that the climate science is up for debate because of uncertainties in the findings, and that oil is the only viable energy source because it is necessary for our “survival”. Exxon CEO Rex Tillerson, by now well-known for his controversial remarks on climate change, maintained his stance that cutting oil production is “not acceptable for humanity”. UCS scientist Kathy Mulvey, in a blog post about the meeting, is baffled at Tillerson’s insistence that “There is no alternative energy source known on the planet or available to us today to replace the pervasiveness of fossil fuels in our global economy”.

More than 150 companies have signed up to set science-based targets in the wake of the Paris Climate Agreement (which calls for nations and companies to keep global temperature increases from fossil fuel pollution well below 2 degrees of warming). To date, none of the world’s largest fossil fuel companies have joined the Science Based Targets list of companies.

Indigenous rights & title

Major resource development projects have long been met with opposition from environmental and Indigenous groups. In Canada, especially since the election of a government eager to reconcile with First Nations, Aboriginal Rights and Title to land is a critical factor in decisions about energy projects. West Coast Environmental Law’s Staff Counsel Eugene Kung has attended Texas-based oil giant Kinder Morgan’s AGM for two years now as a lawyer for Tsleil-Waututh Nation, a Coast Salish people across whose lands Kinder Morgan has proposed a pipeline project.

Reuben George, a spokesperson for Tsleil-Waututh Nation, spoke about the strong indigenous opposition to the Kinder Morgan project, and asserted the right of indigenous peoples to oppose the project on the basis of their own laws.

Kinder Morgan was greeted at last year’s meeting by a petition of more than 60,000 names opposing the proposed pipeline through Tsleil-Waututh territories. This year, West Coast and Tsleil-Waututh brought a report, ‘Top 7 Reasons You Can’t Trust Kinder Morgan’, prepared by nonprofit environmental group Stand in Vancouver. 

Good signs for next year

If the serious shareholder concern from this year’s meetings persists throughout the year, we can hope for next year’s meetings to be even more uncomfortable for major polluters. Environmental groups, bolstered by the success of the divestment movement, are beginning to see shareholder advocacy as a critical tool in the fight against the seemingly impenetrable power of the fossil fuel industry. Harnessing the power of concerned people, shareholders and communities is an exciting frontier of the global climate movement, and a hopeful sign of one of the main premises of Climate Law in Our Hands – that communities have the right to demand accountability from Big Oil.

 

By Anjali Appadurai