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Exxon Mobil Corp. has added an atmospheric scientist to its board, likely in a move to counter its image as a hard-line skeptic of climate change research.
Susan Avery, 67, the former president of the Massachusetts-based Woods Hole Oceanographic Institution, was elected Wednesday to become the company’s 13th director on the board. A respected scientist who spent years researching atmospheric variability, she starts on Feb. 1.
Her election could mark a turning point for the Texas-based oil上海419网
When that failed, Exxon Mobil scaled back funding for the most egregious climate science deniers and acknowledged that the climate is changing. It even publicly backed a tax on carbon in 2009 and the Paris climate accord last year. But the company continued to pay millions to proxy groups and lawmakers who fought regulations on carbon emissions. It scored below all its U.S. and European rivals in a recent ranking of oil majors’ readiness to deal with global warming. It also refused to disclose risks to its business posed by climate change, despite a high-profile shareholder revolt last May in which investors demanded more detailed financial reports.
Appointing Avery to the board may help appease some dissident shareholders, including institutional investors like the California Public Employees Retirement System, New York City’s pension funds and the Church of England’s endowment.
“Making sure you actually bring on a director with expertise in climate change, we think that’s a first step,” said Veena Ramani, who leads the corporate governance program at the Boston-based shareholder advocacy group Ceres. “This is all about decision-making, so we need more than one person who has the competence to think about these issues.”
But unless Exxon Mobil’s new chairman and chief executive, Darren Woods, gives Avery ample room to reshape the company’s climate strategy, her job could prove difficult, according to Karina Litvack, an independent director on the board of the Italian oil giant Eni.
“Figuring out how to translate an understanding of the science into practical business objectives, with a clear roadmap, timelines, capex budgets and so on ― that is the really tough job that requires a combination of business acumen, climate awareness and exceptional leadership,” Litvack, who spoke as an expert in corporate governance and climate change but declined to comment on behalf of Eni, told The Huffington Post on Thursday. “This is where the role of the chairman and CEO makes all the difference.”
The oil and gas business is built on bets that could take decades to yield profit. Oil companies deduct the current cost of digging a well from their tax bills, then speculate on how much they can sell the extracted crude for in the years to come. Those predictions fail to factor in what could happen to oil prices if, say, major economies like the United States or China put a tax on carbon emissions or apply strict rules to the use of fossil fuels to combat climate change.
That leads to risky bets. For example, Exxon Mobil invested heavily in Canadian tar sands, a particularly dirty type of fuel extracted from a mix of sand, clay and a thick, viscous oil called bitumen. Tar sands account for about 35 percent of the company’s liquid holdings, up from 17 percent a decade ago, according to InsideClimate News. Some analysts now expect Exxon Mobil to write down the value of those assets during its fourth quarter earnings call on Monday. The company, hobbled by persistently low oil prices, conceded in October that it may have to do so.
“You can tie this back to governance, actually,” said Shanna Cleveland, who directs work on energy companies at Ceres. “Nobody on the board was apparently asking them, ‘Is it reasonable to be putting so much money and growth strategy into oil sands?’ They’re expensive, dirty and have a long time frame of operating before you start to get any returns.”
Neither Exxon Mobil nor Avery responded to requests for comment.
Still, Avery’s election failed to impress environmentalists, who pointed to blockbuster reports in InsideClimate News and the Los Angeles Times that Exxon Mobil understood the effects of global warming decades ago but covered up the evidence anyway. A coalition of state attorneys general opened fraud investigations into corporations that conceal climate risk, including Exxon Mobil. The company vehemently denied the allegations and insisted that the probe was politically motivated. This month, a Massachusetts judge ordered the firm to hand over decades of documents related to its views on climate change.
“This is a little late in the game, considering Exxon has known about climate change since the 1970s,” Jamie Henn, spokesman for the environmental campaigning nonprofit 350.org, said in a statement. “It’s hard to believe this is little more than a PR stunt meant to pave over the decades the company spent deceiving the public about the crisis.”
“We wouldn’t have given Philip Morris a pass for putting a doctor on their board, and we aren’t going to let Exxon off the hook either,” Henn added. “Exxon lied, people died, and they must be held accountable.”
This article has been updated to include comment from Karina Litvack.
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