By Mathieu Munsch, PhD student at the University of Strathclyde
Over the summer 2015, a team of investigative journalists at the Pullitzer-price winning news website Inside Climate News uncovered what may very well turn out to be the single biggest crime a corporation has ever been responsible for.
They discovered, through meticulous gathering of evidence from archives, leaked documents and interviews with ex-employees that the oil giant Exxon Mobil was well aware of the impact of its activities on the climate as early as the late 1970s, but willingly silenced that information and embarked on a multimillion dollar campaign to spread doubt about man-made climate change and delay government action to solve it.
Exxon was on the cutting-edge of research on climate change long before the issue became known to the public. Because the scientific community had already reached consensus regarding the effects of human activity on the warming of the Earth in the 70s, Exxon naturally took this risk factor seriously because of the potential implications for its business model. In 1978, senior company scientist James F. Black told Exxon’s Management Committee:
“Present thinking holds that man has a time window of five to ten years before the need for hard decisions regarding changes in energy strategies might become critical”
Exxon then invested in expensive technology and put its best people on the job to understand more clearly how the burning of fossil fuel would affect the climate, and what this meant for their company. Leading glaciologist Jason Box, who analysed the early scientific documents produced by Exxon praised the research as being “state of the art, and still rivalling some of the best science we have today.”
Then, towards the end of the 1980s, the company went rogue. Rather than coming clean about what it knew and lead the discussion on how to deal with the problem, Exxon cut down on its carbon dioxide research and positioned itself at the forefront of climate denial. It invested heavily in a network of think tanks and public relations firms to manufacture doubt about the reality of an issue it knew better than anyone to be serious and potentially threatening to the human species. The edifice of denial that Exxon helped to build still stands today, and the three decades of action that were lost because of Exxon’s corporate greed will have been responsible for millions of deaths, and forever changed the course of human history for the worse. In opting for the dark side by valuing its short-term gains over our common future, Exxon’s name will be forever associated with what will possibly be remembered as the most serious crime against humanity ever committed.
Exxon’s campaign to spread doubt about global warming (Source: Inside Climate News)
What does this mean for Strathclyde Pension Fund?
Strathclyde Pension Fund currently holds £34,717,089 of assets in Exxon Mobil. It is of our view that such investments are immoral, as they not only enable Exxon Mobil to continue to pursue its activities, but also requires it to engage in high-risk activities in order to grow and fulfill the legal duty it owes its shareholders to maximise dividends and share values.
But besides the ethical argument, divestment from Exxon Mobil is also deeply pragmatic at its core. Indeed, as a result of the uncovering of Exxon’s big lie, a federal probe into the company’s affairs was called by several U.S. democratic figures, including both presidential candidates Bernie Sanders and Hillary Clinton. In November 2015, the New York State Attorney General issued a subpoena to Exxon Mobil, requesting the company to turn over its financial records, emails and other documents to the Department of Justice. On March 2, 2016, the Department of Justice referred the investigation request to the FBI’s criminal division. As this story moves forward and as Exxon Mobil risks being charged with serious allegations, holding shares in the fossil fuel giant will increasingly constitute a liability. Secretary of State John Kerry himself used the word ‘betrayal’ to define the corporate lies that Exxon Mobil is accused of, and declared:
“I think that Exxon Mobil stands potentially to lose billions of dollars in what I would imagine would be one of the largest class-action lawsuits in history.”
People’s trial of Exxon in December during the Paris Climate Summit (credit: Alex Pashley)
Meanwhile, the journalistic investigation that uncovered Exxon’s deceit continues, as the latest reports suggest that Exxon wasn’t alone in possessing early knowledge of climate change. As this story is brought to light, the stability that used to define oil companies as a safe investment will effectively crumble. If Strathclyde Pension Fund failed to move its money away from fossil fuel in time, there are good reasons to believe that it would experience disproportionately negative returns, which would constitute a breach of its fiduciary duty to its members.
This is why we call on Strathclyde Pension Fund to go Fossil Free today. It is the right choice for you, for me, and for everybody else!