Stick Your Head in the (Tar) Sand

As it promised to do in exchange for the withdrawal of a shareholder proposal on “stranded assets”, ExxonMobil has issued a report on its plans for managing the risks in the event that market and regulatory responses to climate change reduce the value of its oil and gas reserves. “The report, 'Managing the Risks'” according to Natasha Lamb of Arjuna Capital, which filed the original proposal, “forgot to address one thing: the risks.” Instead of offering a plan for dealing with a lower-carbon future, Exxon blithely dismissed its possibility. It’s too expensive, said the company, overstating the costs; the public won’t tolerate it, disregarding the growing concerns. Unlike members of Congress, Exxon doesn't deny the threat of climate change; it simply ignores it. And so, as T. Boone Pickens asserts, America continues its march into the future without any energy plan at all. Is Exxon simply deceitful, promising an honest report on a matter of importance to its owners (i.e., its shareholders) and delivering a whitewash, marked by bland generalities and forecasting a future consonant with its corporate fairytale? Or is it a dinosaur, unable to adjust its lumbering 20^th-century body to 21^st-century realities? Or is it just arrogant?

When members of the Harvard community demanded the university divest its Exxon stock, President Drew Faust responded that Harvard’s $32-billion endowment “is not an instrument to impel social or political change.” There may be a compelling reason to divest: under its current management, Exxon seems a lousy long-term investment.