A weekly reckoning with life in a warming world—and the fight to save it |
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Exxon Mobil convened its annual shareholder meeting today and received an unprecedented rebuke over its abysmal response to the climate crisis. Activist hedge fund Engine No. 1, which had challenged four of the oil giant’s director candidates with its own, successfully won at least two board seats, with a third too close to call as this newsletter was being drafted. Engine No. 1 wants to see not just “talking points” but rather “a long-term business plan” reflecting the reality of global warming, according to an earlier statement reported by CNBC. As The New Republic’s Kate Aronoff wrote in January, Exxon Mobil has invested relatively small sums in renewables, while planning, as its publicly released company documents make clear, to increase its production of fossil fuels. Last fall, Bloomberg reported the company planned to double its earnings by increasing emissions by 17 percent. Engine No. 1, it’s important to understand, is fundamentally a financial company, not some kind of environmental justice collective. As such, its criticism of Exxon, outlined in an investor presentation, stems from the fundamental principle that “ExxonMobil has significantly underperformed and has failed to adjust its strategy to enhance long-term value.” But the source of this underperformance, the hedge fund claims, is something approaching climate denial: “A refusal to accept that fossil fuel demand may decline in decades to come has led to a failure to take even initial steps towards evolution, and to obfuscating rather than addressing long-term business risk.” |
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| Our writers and editors are bringing you vital reporting, explanation, and analysis to understand the current climate crisis—but they need your help. Here’s a special offer to subscribe to The New Republic. |
| —Heather Souvaine Horn, deputy editor |
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This is an astute observation. As Kate reported in January, ExxonMobil’s batty and destructive strategy is largely based on the prediction, featured in its recent annual “Energy & Carbon Summary,” of “climbing fossil fuel demand for the next 40 years.” If that is actually true, of course, the planet is pretty screwed, since most carbon capture and offset programs aren’t as useful as they claim to be. In addition to the Exxon Mobil shareholder meeting showdown, there’s another interesting struggle happening this week over divestment. On Tuesday, the group Divest NY released a report showing that the New York State Teachers’ Retirement System “has more than $300 million invested in companies with substantial coal reserves.” That’s a surprising sum from both a sustainability and an investment perspective—as New York state lawmakers who back divestment initiatives noted in response to the report. Not only is coal unusually bad from a public health and climate standpoint, as TNR’s Nick Martin wrote in January, but it is clearly in decline. It’s currently the only fossil fuel the Biden administration—albeit in a wishy-washy way—has agreed should be phased out, as evidenced by the G7 announcement on Friday that member states would “take concrete steps towards an absolute end to new direct government support for unabated international thermal coal power generation by the end of 2021.” Continued investment in fossil fuels, despite both the moral and the fiscal case against it, is going to be a constant source of debate in the coming months and years. Just last week, the International Energy Agency declared that “there is no need for investment in new fossil fuel supply.” But even before that, fossil fuel companies had been performing poorly. It’s not clear how much investor revolts like the one at Exxon can bring about broad change. Even with Exxon chastened by an activist hedge fund, the company likely won’t dramatically reorient itself to avoid environmental destruction. But at the most basic level, it’s reassuring to see some in the financial world, filled with generations of alleged whiz kids, belatedly starting to realize that there’s no commonsense case for further dino-fuel investment. —Heather Souvaine Horn, deputy editor |
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The Department of Defense appears to have changed course by backing wind development off the California coast, after previously opposing such plans for their potential to disturb Navy operations. |
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| Elsewhere in the Ecosystem |
| Brian Kahn makes a persuasive case for thinking of the current situation in Gaza not just as a humanitarian disaster but also as a form of eco-apartheid: |
It will take time to understand the true scope of what damage the recent bombardment has done to Palestine, but the damage comes on top of the other ecological injustices, ones that will only worsen due to climate change. The UN has deemed 96% of water in Gaza “unfit for human consumption,” largely due to damage sustained by the 2014 war to both water infrastructure and the electricity infrastructure needed to power it. The Israeli government caused the damage, then refused to let Palestinians repair it, worsening the water crisis. (The same cycle has started anew during the recent bombings, with damage to water infrastructure and pipes serving “at least 800,000 people” knocked offline, according to The New York Times.) This intersects with the world’s inaction on climate change. The coastal aquifer that is Gaza’s main source of underground freshwater is increasingly at risk from sea level rise. Long before saltwater overtakes the land, it will puncture the freshwater lens and render the remaining drinkable water brackish. The lack of access to reliable electricity makes desalination—already an energy-intensive, expensive process—all but impossible. |
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