Exxon is well-known as a key architect of the fossil fuel industry’s campaign against the regulation of greenhouse gases, an effort that took off in 1989 with the founding of the Global Climate Coalition.
It involved mobilizing climate skeptics to challenge the science of climate change, highlighting the economic costs of curbing emissions, political campaign contributions and supporting conservative think tanks and climate denial groups.
Now a surprising twist on this well-known story has emerged, thanks to detailed historical research by InsideClimate News. It turns out that from the late 1970s to the mid-1980s, Exxon funded its own scientists to engage in serious research on climate change, who concluded that burning fossil fuels was contributing to climate change, with potentially dire environmental consequences.
Back in July 1977, a senior Exxon scientist reported to the management committee that
there is general scientific agreement that the most likely manner in which mankind is influencing the global climate is through carbon dioxide release from the burning of fossil fuels.
By 1980, Exxon had assembled a high-level team of scientists to engage in cutting-edge research and climate modeling. The results, which were never released publicly, broadly affirmed the conclusions of the wider scientific community regarding the dangers of greenhouse gases.
These revelations raise interesting questions about Exxon’s metamorphosis and cast an even more cynical light on its corporate campaign against carbon regulation. Yet despite the substantial media attention to this story, there has been little discussion of the role Exxon’s scientists themselves played in shaping the oil giant’s public position on climate change.
Our research, published three years ago, provides some valuable context. We interviewed scientists and managers in the auto business, another industry that would be deeply affected by tight controls on carbon emissions.
We found that the role of corporate scientists varied across companies and played an important role in crafting their companies’ stance on climate change, even as the companies – and the scientists – felt business pressures. Some scientists sought to advance climate science by engaging with the broader scientific community – as Exxon initially did – and even became champions for corporate action to address climate change. Others focused internally, screening external science and emphasizing the views of climate skeptics in internal briefings and reports.
Shifting Gears From Air Pollutants
In an ideal world, objective science would drive public policy as well as corporate strategy; concerns about greenhouse gases would prompt government regulations and companies would respond by investing in low-carbon products and technologies. There are, however, complex social and political processes that mediate between science and policy.
Our research focused on the organizational and business factors that shape corporate responses to climate change, particularly the role of their own internal scientists.
This is an important question since fossil fuel-related companies play a key role in the governance of our energy system and the sustainability of our planet. These large firms control vast financial, technological and human resources, and their decisions and research priorities have a big impact on policy and society.
In 1988, NASA scientist James Hansen testified before the Senate on the dangers of global warming, an event that catalyzed public opinion – and corporations' worries over regulations. US Congress
A seminal moment on the public awareness of climate change came on a scorching day in Washington, DC in June 1988, when NASA scientist James Hansen testified before the US House Energy Committee. There had been earlier studies on climate change, but none had the media impact of Hansen’s testimony, which emphasized the immediacy and dangers of climate change.
Managers and scientists at Ford and General Motors (GM) told us that Hansen’s testimony catapulted climate change onto corporate radar screens. One manager described his shock at how quickly “climate went from zero to sixty.” The same month, a Toronto conference on the changing atmosphere called for a 20% cut in greenhouse gas emissions by 2005.
Auto company managers had some reason to expect quick action on climate. Scientific discovery of the Antarctic ozone “hole” in 1984 had rapidly led to the Montreal Protocol in 1987, an international agreement that phased out ozone-depleting gases. The auto industry, along with other carbon-intense sectors, saw this as an ominous precedent. Hansen’s popularization of climate science, paradoxically, helped to spark business mobilization to challenge the science.
At the time, all the major US automobile companies questioned mainstream climate change research and advocated a “wait and see” policy, though they did so with differing intensity. GM was the only US company to refrain from strong direct attacks on the science, and GM later led the US industry in developing the first commercial electric vehicle, the ill-fated EV1.
In contrast, Ford CEO Alex Trotman was especially vociferous in the early 1990s, castigating those concerned with climate change and emphasizing the high cost of precipitate action. The suspicion of the Intergovernmental Panel on Climate Change (IPCC) science reports permeated through the organization, and one Ford manager expressed a common concern that: “The IPCC is the politics of science, not the science of science.”
Both Ford and GM had teams of internal scientists whose primary research focus was smog-forming air pollutants such as SOx, NOx, and particulates. As early as the 1970s, both had allocated a few scientists to track climate change, though unlike Exxon, they did not invest heavily in primary research. Rather, they served to scan and interpret the developing science at universities and governmental research centers.
Our interviews revealed the tensions inherent on the boundary between the worlds of academia and industry. Corporate scientists strive to adhere to the norms of objectivity and free investigation while also feeling the business pressures of bottom-line accountability in hierarchical, profit-driven corporations.
One manager we interviewed remarked that scientists who work closely with product operations are under “social pressure…they are around people who don’t pay attention to the climate issue and don’t want to hear it.”
We found that a key difference between Ford and GM was where corporate scientists stood on the boundary between the scientific community and the company. The data suggest that their orientation played a role in whether and when their companies accepted or resisted the emerging consensus in the science community that human emissions are likely to cause serious climatic impacts.
Ruth Reck, GM’s lead scientist on climate change, was active and respected in the external climate scientific community. Initially a climate skeptic, she became a strong internal advocate and in 1985 organized a large internal GM conference, to which external scientists – but no skeptics – were invited to give presentations. Product managers from GM’s relatively autonomous divisions were asked to speak about how their strategies might impact greenhouse gas emissions.
Ford, by contrast, was a much more centralized company, with tight control from top management over product and political strategy. The Ford scientists assigned to track climate change were relatively insulated from the external climate science community, and tended to filter the scientific findings by downplaying the growing evidence for climate change. When external scientists were invited, for example, they were usually skeptics.
Change Of Plans At Exxon
Exxon’s investment into climate science during the early 1980s appears to have taken place in a context similar to that in GM. The ICN investigation found that they brought in outside specialists who collaborated with university and government scientists, in a corporate culture that allowed them independence from commercial pressures and encouraged management to monitor long-term risks.
Henry Shaw, Exxon’s lead climate scientist at the time, was seeking scientific legitimacy to influence debates. In a 1978 letter, he wrote: “This team must be recognized for its excellence in the scientific community, the government, and internally by Exxon management.”
By the 1990s, though, Exxon was a very different company. In research on the oil majors in the US and Europe together with Dr Ans Kolk of the University of Amsterdam, we found that Exxon was much closer to Ford in the orientation of its climate science group.
Exxon’s climate strategy team was led by Brian Flannery, a respected astrophysicist recruited from Harvard. He was a climate skeptic, however, who was less engaged with the mainstream climate science community, and used his scientific legitimacy to influence internal Exxon management as well as craft the external denial campaign.
Current Exxon CEO Rex Tillerson has shown little interest in renewable energy as a business and has said it’s very likely society can adapt to the effects of climate change. Reuters
Exxon’s strategy process became increasingly centralized under CEO Lawrence Rawl and later Lee Raymond, leaving little room for consideration of alternative scenarios – for example, that concerns about climate change would lead to significant regulatory and reputational risks to the business. Shell’s legendary strategic planning process, by contrast, explicitly challenges management to consider scenarios that entail major social, environmental and economic trends.
It was around this time, during the late 1980s, that the company shifted its strategy. Instead of continuing to invest in its own scientific expertise on climate change to gain external credibility, the company defunded the program, shifted to climate denial, and deployed its lobbying and public relations machine to influence policymakers. One Exxon manager told us that “(policymakers) cannot ignore us anyway; we are the big elephant at the table.”
The rising fear of carbon regulation was most likely an important factor that led to the clamp-down on Exxon’s independent climate science initiative in the late 1980s. But our many interviews with corporate managers and scientists convinced us that their perspectives on climate change were not purely strategic and driven by corporate interests; the scientists were also strongly influenced by organizational structures and culture, and in turn, they had an important influence on management thinking and company strategy.
In recent years, Exxon has moderated its position and in 2007 announced that it was abandoning support for climate denial groups, though it has continued to oppose most forms of carbon regulation. Like other oil companies, Exxon has diversified into natural gas and invested in biofuels, hedging its bets on the future. Exxon’s website now acknowledges a need to put “policies in place that start the world on a path to reduce emissions while recognizing that addressing GHG emissions is one among other important world priorities, such as economic development, poverty eradication and public health.”
One can only wonder what path Exxon might have taken if Exxon’s internal scientists had remained more engaged in the larger scientific community and less influenced by business pressures.
David L Levy, Professor of Management, Director of the Center for Sustainable Enterprise and Regional Competitiveness, University of Massachusetts Boston and Sandra Rothenberg, Chair of Public Policy, Professor of Business, and Director of Saunders College Institute for Business Ethics,, Rochester Institute of Technology