In this episode
Colleen and Kathy talk about
- how science can link global warming emissions and their impact to specific fossil fuel companies
- what the future for fossil fuel looks like and how companies can shift to less carbon-intensive fuels
- how we use science to advocate for these changes
Timing and cues
Interview part 1 (2:23-12:10)
Interview part 2 (13:11-23:59)
End segment (24:30-27:42)
Editing and music: Brian Middleton
Additional editing: Omari Spears and Colleen MacDonald
Research and writing: Pamela Worth
Executive producer: Rich Hayes
Host: Colleen MacDonald
Colleen: In just a few days, it’s gonna be May. And for certain colleagues of mine at UCS, that means one thing: shareholder season.
Each May, fossil fuel companies invite representatives from their groups of investors to their annual meetings, where those shareholders learn about the company’s performance and vote on company business. It’s a ritual… much like a high school prom. Both involve a stressful amount of planning, and a lot of anxiety about who’s invited. And just like you’d better not bother the committee chair the week before prom… my colleagues are up to their elbows in preparation each May.
Fortunately, Accountability Campaign Director Kathy Mulvey had some time to check in on the podcast about what we might expect from this shareholder season. If you listened to our four-part series on UCS accountability work from the fall of 2020… you know that we have a team of smart and savvy people who work on holding polluters like fossil fuel companies responsible for their contributions to climate change.
If you didn’t catch that series, no problem! Here’s what you missed: one facet of their work is the science of attribution—that is, tying specific effects of climate change, like inches of sea level rise, to specific fossil fuel companies. Another is calling out these companies for claiming to care about climate change… while generally refusing to change anything about the way they work.
My conversation with Kathy touches on these topics… and she also talks about what true accountability would mean for the fossil fuel industry… what they should be telling their shareholders… and whether these companies are already past their Kodak moment—the time when their technology is no longer relevant.
Colleen: Kathy, it's great to have you on the podcast. Welcome.
Kathy: Yeah, thanks, Colleen. It's great to be here.
Colleen: So you know, I was thinking about corporate accountability and when I think of corporate accountability, I think of the Nestle boycott in the '70s with people with signs outside of grocery stores and I suspect we've come a long way since then. So how do we hold companies accountable in the 21st century?
Kathy: Yeah, that's a great question and the field and the campaigns really for holding corporations accountable have grown dramatically and our tactics and strategies for corporate accountability are different from how they would have been 30 or 40 years ago. So for example, companies have a media presence and a social media presence, and when they're greenwashing or making claims that don't line up with reality, there are a lot of great activists out there who can call them out and embarrass them for false claims.
Another area is people recognizing the leverage that we have with our financial power. So you know, certainly, boycotts and divestment as strategies have been around for a long time and when we look at the ways that companies need to be accountable to their own shareholders and investors, there's a really strong movement of values-aligned investors who are seeking to hold companies to their environment and social justice values that they hold. So that might be a public pension fund or a faith-based investor. And then, of course, when we look at issues like the fossil fuel industry, divestment is a massive movement at this point with $14 trillion and counting divested from the fossil fuel industry. So those are a few ways that corporate campaigning is growing.
Colleen: It feels like we're at a really big moment here. I mean, 10 years ago, it didn't seem possible that science could be used to hold fossil fuel companies accountable. But so much has happened. What strikes as you as the most significant developments in the past 10 years or so?
Kathy: Yes. So one really important development is advances in attribution science, scientists' ability to attribute climate change impacts and extreme events to climate change, and then the ability to trace those impacts to the sources of the global warming emissions. So particular companies, like ExxonMobil or Chevron, we’re able to quantify how much of climate impacts, like sea level rise or global temperature increase or ocean acidification can be traced to emissions from burning the products of particular companies. So that's one major advance building on the research of Richard Heede, who compiled a data set that other scientists have been able to work from.
Another is the work of social scientists and historians of science in really being able to point back in time to what the fossil fuel industry and companies and trade associations knew about the climate harms of oil, ga,s and coal products and what they did in spite of what they knew.
Colleen: And we’re now seeing some cities suing fossil fuel companies, so what’s leading to that?
Kathy: So working from this scientific analysis, what we're seeing is the impacts of climate change are apparent to people across the country and around the world. And the question of who's actually going to pay for the damages and for adapting to changes that are already locked in, is really up front in peoples' minds. And so, we've seen now more than 25 cities, counties, and states in the U.S. who are now suing fossil fuel companies over climate damages and fraud. So that's a real change in the landscape around the fossil fuel industry that has really taken off just in the last four years.
Colleen: How does your team bring the science to bear on how you target larger fossil fuel companies, like Chevron and ExxonMobil?
Kathy: We do that in a few different ways. One is that we are making sure that policymakers and public officials have access to the best available science when they're making decisions about how to address, how to mitigate and adapt to climate impacts at the local level in particular. We also are helping to build the field of litigation relevant climate science and other scientific research that can actually inform these lawsuits that have been filed in the U.S. and in other places around the world. So building a community of scientists, researchers, legal experts and others who are advancing our capacity to address questions of responsibility of the fossil fuel producers. So other constituencies who use the information and research that we produce are investors and shareholders, those in the field of socially responsible investing and those who are implementing divestment commitments.
Colleen: What would you want a fossil fuel company to do since fossil fuel is their business and that's at odds with a warming world?
Kathy: So a few years back, one of UCS's scientists, Peter Frumhoff, along with Naomi Oreskes and Richard Heede, really set out what would be the responsibilities of fossil fuel producers in a carbon-constrained world. And it actually boils down to a handful of actions that these companies oughta take. So first and foremost, they should renounce disinformation on climate science and policy. They need to stop doing it and stop supporting it. They also need to align their business models with the global temperature goals and the target of reaching net zero carbon emissions that's set in the Paris Agreement. They need to fully disclose the climate risks of their business, they actually need to support fair and effective climate policies, and finally, they need to pay their fair share of the costs of climate damages and adaptation.
This is a big part of the work that we've been doing on this campaign, was to articulate some metrics and really set out to say, how would we know when companies like ExxonMobil, Chevron, BP, Shell are moving in this direction? And we did that with a climate accountability scorecard first published in 2016 and then we updated it in 2018. And one of the things that we've seen is that more and more of these major fossil fuel companies are paying lip service first to the Paris Agreement and now to the notion of net zero global warming emissions. So, it's really important to be able to help investors and others who are looking at so-called climate risk reports from these companies to parse through the details. Another is when companies seem to be expecting to wave a magic wand with technological solutions to remove carbon from the atmosphere rather than reducing emissions now, and without taking responsibility for paying for those technologies or ensuring that they can be scaled up. So those are a couple of ways that our scientists and researchers are seeking to help get into the details behind increasing corporate pledges of climate action that too often are talking the talk without walking the walk.
Colleen: So Kathy, for a company to get to net zero by 2050, doesn't that in essence put them out of business?
Is it asking them to go out of business? No, it isn't. It's asking them to be energy companies for a low carbon future, for a future where we are avoiding the worst effects of climate change. And technologies shift all the time and one of the things that I've heard shareholders of fossil energy companies say is they don't want these companies to face the Kodak moment. A company around whom technology and the industry is shifting, who doesn't respond quickly enough to those new opportunities for being leaders in a carbon-constrained world and being leaders for a low carbon future. You know, they're missing out on opportunities in the energy transition too, right? If they sort of dig in their heels and insist on dominating the energy business of the 20th century when we're in the 21st century, that's not a good business plan.
Colleen: So, Chevron has an annual meeting coming up. How important are these meetings and what happens at them?
Kathy: So annual meetings are corporate beauty pageants, where the decision-makers of companies that are traded in the stock market face those who invest in them. That is the owners of the company to whom they really ought to be accountable. That really is the one time where shareholders, but also the business press and people who are concerned about the impact of corporate actions get to confront those corporate decision-makers in person and all in one place. It's become a really important moment for issues of environment, social justice and corporate governance to be brought to the attention of those top decision-makers. This year and last year, it's different because these meetings are happening virtually, and so there isn't a coffee hour, for example, where there's an opportunity to have a one-on-one conversation with a corporate boardmember or executive. There aren't the same kinds of opportunities for people from fenceline and frontline communities to bring their stories of how corporate actions are affecting people on the ground to the attention of the decision-makers and the shareholders in the company.
Colleen: Who can attend?
Kathy: So only shareholders in the company can attend the annual meeting. However, many socially responsible investors, faith-based investors, other mission-aligned and values-aligned investors make their proxies available to people like representatives of frontline and fenceline communities. So it's possible if someone from an affected community wants the opportunity to go into an annual meeting, and we've done this in past years, to connect an investor, a concerned investor, with a community representative such that that person is actually representing that shareholder inside the meeting.
Colleen: So what role do shareholders have in the annual meeting?
Kathy: So one way that shareholders who are concerned about the environmental impacts of a company's business or want to raise up issues of social justice and racial justice, one avenue that they have is through presenting a shareholder proposal. And so, this is done under the oversight of the Securities and Exchange Commission, and these proposals have to meet certain criteria. They really have to be issues of the broader strategic direction of the company and often one of the ways to get an issue on the agenda is by asking for better disclosure and for reporting from the company on these issues.
If that issue passes and gets through, it's a really important opportunity to make that issue visible to all other shareholders and to give them a chance to vote on it. And one of the things that we've seen in the past few years that's a real shift around the oil and gas companies, is some shareholder proposals starting to get majority votes. So in 2017, for the first time ever, a majority of shareholders in ExxonMobil voted in favor of a climate-related shareholder proposal. And that was a real wake-up call to the company's management and board that it has to take these issues seriously.
Colleen: So Kathy, if I arranged it so that you could have the floor at the upcoming Chevron annual meeting, what would you want to bring to their attention?
Kathy: Yeah, Colleen, unfortunately it's more than a handful of concerns. So Chevron is failing to reduce global warming emissions in line with the Paris Agreement. Chevron, like ExxonMobil and some of its other peers and competitors, is paying lip service to climate action while planning for really incremental changes in its business and incremental reductions in its global warming emissions.The company is bankrolling trade associations and lobbying groups that impede climate action. It's engaged in greenwashing efforts that are the subject of legal and regulatory complaints. Chevron, through its own business, perpetuating racial injustice in the United States and through its lobbying. It's funding the regime in Burma, Myanmar following a military coup there in February. And then, for decades, the company's been evading accountability for deadly pollution in the Ecuadorian Amazon.
Colleen: It feels like we have such a, so little time to really get these fossil fuel companies to, you know, to really start doing something significant. Have you seen any success stories that you could share?
Kathy: Sure. So certainly the company's own shareholders standing up to corporate management and demanding that they answer for the climate impacts of their products, but also that they put out a credible plan for how the company will be part of the energy transition. I think that's been a real shift that we're starting to see majority votes from shareholders for climate action and for lobbying that is consistent with stated company positions on climate action. Another one is the rapid growth of the divestment movement. It's at more than $14 trillion in assets that have now been divested from the fossil fuel industry. That’s a sign of impatience in the marketplace and we're even seeing that pressure from other financial sector players where the banks that have been bankrolling the fossil fuel industry are themselves under scrutiny. And you know, for example, most of the major banks are no longer financing exploration in the Arctic because of the pressure that they're feeling for their association with the fossil fuel companies.
The litigation and the growth in climate-related litigation is putting the demand for accountability to the companies, the communities and the states that have been affected by the fossil fuel industries' practices in terms of both the harmful effects of their products, but also the way that they've deceived the public and policymakers, seizing access to the courts and looking to the courts to pursue justice is a really critical development. An, even more so, the visibility of the public demand and the shift in the fossil fuel company's social license will really be one of the vital mechanisms for being able to hold them accountable for their actions and for steering the business community writ large in a direction that is consistent with avoiding the worst effects of climate change.
Colleen: So Kathy, any final thoughts?
Kathy: Yeah, I think, Colleen, reflecting on this conversation, it's really clear that advances in science and in both physical science and social science, are really the foundation on which so many advances have become possible. Both the work of shareholders and investors and also the use of litigation as a tool to hold the fossil fuel industry accountable for the climate harms associated with its business.
Colleen: Well, Kathy, thanks so much for joining me on the podcast. This has been a really great conversation.
Kathy: Thanks a lot, Colleen.