Holding Corporate Carbon Producers Accountable
With a New Scorecard, UCS Evaluates the Climate Record of Major Fossil Fuel Companies
By Elliott Negin
When assessing responsibility for global warming, politicians, journalists and others have historically tended to think in terms of nations. Even before the 2015 Paris Climate Agreement, for instance, the 1992 Kyoto Protocol—the first international legal framework established to address climate change—focused on countries’ roles, differentiating between the developing world and advanced, industrialized nations whose economies have benefited the most from fossil fuels. From that perspective, China is currently the world’s largest carbon emitter, followed by the United States (the top emitter until 2006), Russia, India, and Japan.
Researchers, however, are increasingly taking a different approach by focusing on the role played by fossil fuel producers. After all, nations do not emit carbon dioxide and methane. Hydrocarbon fuels, extracted, marketed, and sold by companies, do.
Thanks to a groundbreaking study by geographer Richard Heede, we now know that a relatively small number of investor- and government-owned companies are responsible for two-thirds of human-caused carbon emissions since the start of the Industrial Revolution. Heede’s work, which originally appeared in the January 2014 issue of Climatic Change, finds that just 90 companies—50 investor-owned, 31 state-owned, and nine centrally planned nation-state producers of oil, natural gas, coal, and cement—accounted for 65 percent of worldwide carbon emissions between 1854 and 2013.
What’s more, half of all these companies’ total emissions have occurred since 1988, long after the scientific community and the public became aware of the serious threat posed by global warming.
In light of these facts, what responsibility do these large fossil fuel companies bear for climate change? And what role should they play now that, with the Paris Climate Agreement, the world has committed to move to a low-carbon future?
Ranking the Companies
UCS, which has been exposing the fossil fuel industry’s climate disinformation efforts for years, has compiled a scorecard designed to help answer these questions. In this new analysis, UCS ranks eight of the top investor-owned fossil fuel companies on a variety of key metrics related to their business practices. Listed in order of emissions magnitude, the UCS scorecard evaluates Chevron, ExxonMobil, BP, Royal Dutch Shell, ConocoPhillips, Peabody Energy, CONSOL Energy, and Arch Coal. Together, they are responsible for nearly 15 percent of worldwide industrial carbon emissions since the 1850s.
The overall finding? Unlike the children of Garrison Keillor’s fictional Lake Wobegon, all the companies in the UCS survey are, for the most part, below average.
“These companies are substantial contributors to the problem of climate change and, if we are going to achieve swift and deep reductions in carbon emissions, they will have to take responsibility for their climate-related actions,” says Kathryn Mulvey, a senior UCS analyst and lead author of the scorecard. “We found some differences in the climate-related positions and actions among the companies but, by and large, they all have a long way to go.”
Renouncing Climate Disinformation
For a fossil fuel company to retain the public trust and social legitimacy needed to do business, step one is to make accurate public statements about climate science and renounce support for trade associations and advocacy groups that mislead the public about climate change.
How have the companies performed in these areas?
Only BP and Shell earned a passing grade for their public positions on climate science. In June 2015, BP, Shell, and four other European-based oil and gas companies sent a letter to the United Nations urging governments to set a price on carbon. “We want to be part of the solution,” they wrote, “and deliver energy to society sustainably for many decades to come.”
The lowest mark in this category went to ExxonMobil, which has consistently disparaged climate science and recommended that societies learn to adapt to global warming. “Mankind has this enormous capacity to deal with adversity,” ExxonMobil CEO Rex Tillerson said at the company’s 2015 annual shareholder meeting, “and those solutions will present themselves as the realities become clear.” Never mind that the realities of climate change have been clear for many years—and the company’s own scientists warned Exxon’s upper management decades ago about the “potentially catastrophic” risks posed by global warming.
UCS also ranked ExxonMobil the lowest—with a designation of “egregious”—for its longtime support of climate science denier groups. The company has spent at least $33 million since 1998 on a network of more than four dozen think tanks, advocacy groups, and trade associations, many of which continue to distort climate science and denigrate renewable energy to this day.
Chevron, which routinely tries to block federal and state climate initiatives, joined ExxonMobil at the bottom. Both are members of the American Legislative Exchange Council (ALEC), a secretive business lobby group that denies human activity is driving climate change and provides its state legislator members with “sample” bills that seek to undermine renewable energy. Over the last several years, BP, ConocoPhillips, and Shell have laudably quit ALEC. But these companies each earned poor marks nonetheless for standing by while the trade groups to which they belong—including the American Petroleum Institute, National Association of Manufacturers, and the US Chamber of Commerce—continue to distort climate science and oppose government efforts to curb carbon emissions.
Doing Business in a Low-Carbon World
Because the products fossil fuel companies sell in the marketplace are directly responsible for carbon emissions, these companies have a special responsibility to transform their business models to reduce that threat. Practically speaking, this means publicly acknowledging the international community’s commitment to a swift transition to a low-carbon future and supporting policies consistent with this goal. And it means taking immediate action to disclose and cut emissions from their current operations by, for example, ending the harmful practice of flaring natural gas.
How do the companies rank on these metrics?
Many of the companies appraised by the UCS scorecard have made general statements on their websites or elsewhere about the need to reduce carbon emissions, but most have stopped short of supporting specific policies. As mentioned above, BP and Shell now back carbon pricing, earning each of them a middling grade for their stated support of US government action. ExxonMobil also got a middling grade in this category. The company now claims to favor a revenue-neutral carbon tax, although its sincerity has been questioned given the fact that most of the members of Congress the company funds consistently vote against the policy.
All three coal companies ranked low for their continued support of efforts to block climate action in the United States. The largest of them, Peabody Energy, which is now in bankruptcy proceedings, ranked the worst in this category. It received an “egregious” rating for including climate science disinformation—namely, denying the existence of a scientific consensus about climate change—in its current legal challenge to the Environmental Protection Agency’s Clean Power Plan.
All the companies received poor marks on disclosing and reducing their own emissions. While more than 170 major companies have now committed to setting science-based targets to reduce their emissions in line with last year’s international climate agreement, none of the companies UCS studied has yet done so. In fact, not a single fossil energy producer is among these companies.
All told, UCS painstakingly assessed these major fossil fuel companies on 30 metrics across four broad areas, including their disclosure of climate-related risks to their businesses, as stipulated by the US Securities and Exchange Commission. The report includes a series of recommendations to the companies, including that they sever ties with climate-denying trade associations and industry-affiliated groups or publicly commit to working within these groups to change their climate-related positions and actions.
“Fossil fuel companies will, in all likelihood, continue to operate for many years to come while we decarbonize the world economy,” Mulvey says. “But they can no longer be allowed to mislead the public or their shareholders about the threat their products pose to the planet. We’ve identified a series of steps these companies should take immediately. And we’re committed to keeping close tabs on them to pressure them to do so.”
[ STAFF SPOTLIGHT ]
This spring, Kathy Mulvey, manager of the UCS climate accountability campaign, attended the 2016 ExxonMobil shareholder meeting in Dallas, Texas, with eminent climate scientist Michael MacCracken. Because ExxonMobil CEO Rex Tillerson has long disparaged the climate models used by climate scientists, Mulvey took the opportunity to bring Dr. MacCracken so he could confront Tillerson in person about what his company plans to do in light of the most recent scientific findings that the consequences of climate change are likely to be more severe than previously anticipated.
Mulvey has spent many a spring day inside annual shareholders’ meetings—the key chance each year to bring corporate CEOs, board members, and top management face to face with the impact of their decisions. She’s stood with Wayne Baker, who lost his larynx to tobacco, as he spoke his truth to decision makers at the shareholders meeting of the former cigarette manufacturer RJR Nabisco, and with Les Ann Kirkland, who confronted the principals at Dow Chemical’s annual meeting with the realities of living in “cancer alley” near its facility in Louisiana.
Among her many accomplishments prior to joining UCS, Mulvey worked with Corporate Accountability International for two decades, serving as both executive director and international policy director. Now she’s overseeing the UCS effort to hold accountable the major fossil fuel companies on their climate-related practices. “Too often, fossil fuel companies have been able to successfully mislead the public about climate science and block vitally needed climate action,” she says. “I’m very grateful to the members and supporters of UCS for making this work possible and helping to both encourage and pressure these companies to break from climate deception and take responsibility for the impact of their products.”