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Could Lawsuit Against Exxon Finally Force the Fossil Fuel Industry to Pay for Its Lies About Climate Change?

Climate

For the past few months, New York State Attorney General Eric Schneiderman has been investigating ExxonMobil to determine if the world's largest publicly traded international oil and gas company lied to the public or investors about the risks of climate change to its future business, based on the firm’s own internal studies. In November, Schneiderman issued a subpoena demanding a wide range of documents, including emails and financial documents.

New York State Attorney General Eric Schneiderman has been investigating ExxonMobil to determine if the world's largest publicly traded international oil and gas company lied to the public or investors about the risks of climate change to its future business, based on the firm’s own internal studies. Photo credit: River North Photography / iStock

The New York Times reported that the inquiry “would include a period of at least a decade during which ExxonMobil funded outside groups that sought to undermine climate science, even as its in-house scientists were outlining the potential consequences—and uncertainties—to company executives."

Kenneth P. Cohen, the company's vice president for public affairs, vehemently denied the accusations. He said, “We unequivocally reject the allegations that ExxonMobil has suppressed climate change research.” He added that the company had "funded mainstream climate science since the 1970s, had published dozens of scientific papers on the topic and had disclosed climate risks to investors."

California’s AG, Kamala D. Harris, launched a similar investigation, suggesting that other states may follow Schneiderman’s lead, possibly expanding the probe into other fossil fuel companies. Several high-profile current and former lawmakers, including Hillary Clinton, Bernie Sanders and Al Gore, have called for criminal investigations based on the media reports.

The growing inquiry has been compared to the lawsuits that have bedeviled tobacco companies, which concealed from the public research about the health effects of smoking cigarettes in the 1950s and '60s.

“This could open up years of litigation and settlements in the same way that tobacco litigation did, also spearheaded by attorneys general,” Brandon L. Garrett, a professor at the University of Virginia School of Law, said. “In some ways, the theory is similar—that the public was misled about something dangerous to health. Whether the same smoking guns will emerge, we don’t know yet.”

I had a chance to ask Katherine Sawyer, international organizer at Corporate Accountability International, a Boston-based non-profit, about Schneiderman’s investigation and what it might mean for Exxon and the fossil fuel industry in general.

Reynard Loki: Since the investigation isn’t public, it remains unclear what exactly Attorney General Schneiderman hopes to find in the reams of documents he ordered Exxon to produce. What exactly is he looking for? Could there be a smoking gun?

Katherine Sawyer: What he’s looking for is proof that Exxon knew about the catastrophic dangers of climate change and chose to suppress that science—proof that the corporation made the purposeful and calculated decision to hide the truth. In addition, the investigation will look at whether or not Exxon properly notified its investors of the business risks associated with climate change.

In other words, did Exxon let its investors know that climate change will inevitably hurt its business or did it seek to obscure the truth?

Reynard Loki: In an op-ed piece in the Guardian, climate activist and 350.org founder Bill McKibben slammed Exxon, saying that "no corporation has ever done anything this big or bad." Do you agree that the climate impact of Exxon's alleged duplicity, if proven, make it the worst case of corporate malfeasance ever?

Katherine Sawyer: If it’s not the worst, it’s certainly close. The implications of Exxon and the rest of the industry’s denial and deception will have real life-and-death consequences for millions upon millions of people around the world. Certainly, the lies and deception of many industries, from Big Tobacco to Big Food, have had serious and deadly health consequences, but none will have such irreversible, global consequences for entire populations, communities and even countries.

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Because of inaction on climate change caused by polluters and climate denial, entire populations will need to be relocated and their cultures will likely be wiped out. It’s truly hard to overstate the impact of Exxon’s denial campaign on the future of people and our planet.

Reynard Loki: Alan Jeffers, an ExxonMobil media relations manager, explained the company’s position regarding claims that it has been funding climate research to the Washington Post: “We were engaged with funding public policy groups on policy issues, not on science,” he said, adding, “We made our position known on some climate policies that made us unpopular with environmental activists and they tried to position that as us funding climate denial. And that’s just not accurate.”

Does the defense they are mounting—that they are funding policy issues rather than science—sound at all reasonable?

Katherine Sawyer: No, it doesn’t. And I’ll tell you why. First, we know for a fact that Exxon, directly and through front groups, has funded junk science and climate denial. That’s not up for debate. Second, you don’t need to be a scientist to know that you need a good understanding of climate science for sound climate policy. The idea that climate policy can somehow be separated from climate science only passes the smell test if you hold your nose.

Reynard Loki: This affair has drawn comparisons to the tobacco industry concealing research into the health effects of smoking. Elliott Negin of the Union of Concerned Scientists points out that the Competitive Enterprise Institute, “like a number of other fossil fuel industry-funded groups … cut its teeth fronting for the tobacco industry in the 1990s to stave off tighter government regulation,” noting that Competitive Enterprise Institute is “the very same think tank that reassured Americans back in 2006 that global warming is nothing to worry about in a TV commercial praising the benefits of carbon dioxide.”

Do you think this is a fair comparison?

Katherine Sawyer: Absolutely. Right now the fossil fuel industry is in a very similar place to where the tobacco industry was in the late 1980s to early '90s. Just as Big Tobacco before it, the fossil fuel industry will continue to deny wrongdoing and peddle its deadly product while willfully deceiving the public—all in the name of profit. Another key comparison to draw between the tobacco industry and the fossil fuel industry is the role that they play interfering in policymaking. Tobacco-control policy is insulated from the tobacco industry in the UN because governments recognized the inherent conflict of interest in the tobacco industry having any say in public health policymaking. Right now, a global coalition is organizing to implement a similar provision within climate policy in order to ensure that policymaking reflects the needs of people and the planet, not corporate bottom lines.

Reynard Loki: Exxon acknowledged that it wasn’t a good idea to finance research and campaigns that cast doubt on the scientific consensus regarding climate change; in 2007, the company said it would cut off such financial support. That practice “deserved no prizes for good corporate citizenship,” wrote the Bloomberg View editorial board, also pointing out that “failing to be a good corporate citizen isn't lying and isn’t a crime.”

If Schneiderman’s investigation fails to lead to criminal charges, what will its ultimate impact be, if any? Even if Exxon is found to be innocent, does the inquiry have implications on a larger scale, say, for the global climate change movement or public awareness in general?

Katherine Sawyer: This is truly one of those cases where the journey could be more valuable than the destination. This investigation could uncover internal documents and more deceit and lies, which could help to further shift public opinion and compel decision-makers around the world to action. In addition, more states seem to be hopping on board. A couple weeks ago the governor of Vermont urged his state to divest from ExxonMobil and also coal and the attorney general of California just opened an investigation into Exxon. So, regardless of the outcome in New York, we’re witnessing the tipping point for the fossil fuel industry’s social license.

Reynard Loki: The Bloomberg View editorial board slammed Schneiderman’s case, characterizing it as a “dangerous crusade.” Here’s what they said:

"On the face of it, the company's research on climate change and its previous public positions on climate policy not only fail to amount to fraud, they aren't even necessarily at odds ... [E]ngaging in scientific research and public advocacy shouldn't be crimes in a free country. Using the criminal law to shame and encumber companies that do so is a dangerous arrogation of power."

Is the Bloomberg View editorial board being a corporate apologist or does it have any valid points?

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Katherine Sawyer: The only dangerous arrogation of power here is that of Exxon and the rest of the fossil fuel industry controlling and eroding climate policy discussion around the globe by funding denialism to create doubt where there is actually scientific consensus. Not only did this denial hoodwink the media, it—along with millions in campaign contributions—coopted our policymakers and subverted any attempts to take action.

There’s plenty of blame to go around and our elected officials have certainly failed to act collectively. But it’s short-sighted and overly simplistic to absolve those pulling the purse strings of Congress from any guilt. It is the very forces of the fossil fuel industry (and the groups it funds) that have rendered Congress inert and in some cases regressive on climate policy.

The parallels between Big Tobacco and Big Oil don’t end with the doubt and denial they both excelled at propagating; they extend to the health effects of their products. People died (and continue to die) because of Big Tobacco lies and manipulation and people are dying because of climate change. Those who knew of these deadly effects and actively undermined attempts to curb them must be held responsible.

Reynard Loki: Before Schneiderman issued his subpoena to Exxon, InsideClimate News published the first installment of an exposé revealing that the company knew its primary product contributed to global warming. Writing about the exposé in The New Yorker, Bill McKibben noted the lack of media coverage of the story. Has the American media failed to give climate change the proper coverage? Are Americans tired of hearing about climate change? How enraged can the public really be at yet another possible instance of corporate abuse?

Katherine Sawyer: The mainstream media enabled (and in some cases supported) the false debate over climate science to go on for far too long and that’s what Americans are tired of hearing. Polling shows that across the political spectrum, people are worried about climate change as a global issue. One of the biggest challenges we face in the U.S. is that most Americans have been insulated from the effects of climate change. But in the last few years, that has changed. More and more American lives and ways of life are under threat by changing and more aggressive weather and rising sea levels. When the pieces are put together for people that Exxon knew the truth, buried it and these are the consequences—people grow more and more outraged.

Reynard Loki: Beyond legal actions taken by government officials such as Schneiderman, what can the media and the public do—or do better—to prevent the kind of long-term corporate abuse in which Exxon may have engaged?

Katherine Sawyer: For climate change, the biggest thing we need to do globally is protect climate policymaking at every level from interference by the fossil fuel industry. We need to expose and challenge this interference directly and pass strong regulations at all levels to prevent it. Moneyed oil, coal and gas interests are the reason we are still creating pipelines, export terminals and mines in the year 2016 when we know we need to immediately begin phasing out the use of fossil fuels.

Reynard Loki: As Kevin Allison and Ben Kellerman of Reuters point out, “Several oil groups now use internal carbon pricing for their assets, brag about renewable energy investments and are disclosing more information about the effects of climate change on their business—often in response to concerted shareholder demands.”

How meaningful are these kinds of changes? How much of the oil industry’s shift toward increased transparency and investment in renewable energy signal a larger move toward a low-carbon future and how much is simply greenwashing?

Katherine Sawyer: This is greenwashing in its purest form. Fundamentally, their business models are predicated on the extraction and burning of fossil fuels. Anything done on the fringe—like transparency and renewable investment—is just a distraction. In addition, many of the same corporations are still investing enormous funds in front groups and trade associations deeply involved in climate denialism.

An important thing to acknowledge here is that much of what the fossil fuel industry and other emissions-intensive industries have done to “green” up their businesses is meant to stave off the political will to more strictly regulate emissions at the national and international levels. We see this with every industry facing imminent regulation—from tobacco to food to fossil fuels—the pattern is the same: as the clamp of regulation tightens, these industries position themselves closer to the policymaking process and decision-makers using such voluntary initiatives to prove their “sincerity” in finding a solution. But, in reality, they use that seat at the table to stave off regulation by arguing that the industry is 1) already taking action; and 2) more effective than the government in finding a solution.

Reynard Loki: According to Gallup, Americans’ view of the oil and gas industry is generally negative. Would Exxon’s guilt, if proven, significantly affect public opinion of the industry as a whole? Or will the impact be felt primarily by Exxon?

Katherine Sawyer: I think it will impact the industry as a whole. Americans are realizing that this is an industry at odds with protecting people from climate catastrophe. Exxon’s misdeeds and potential guilt will and should, reflect on the entire industry. And perhaps more importantly, there could be consequences for other oil corporations. As we saw with Big Tobacco, the entire industry was implicated and had to face the consequences.

Reynard Loki: I’m going to ask you to look into your crystal ball. Do you think Exxon will be found guilty of lying to the public and/or shareholders and face criminal charges? If so, what kind of sentence or penalty will be levied?

Katherine Sawyer: There are certainly numerous opinions on the success of the New York and California investigations, but again, what’s most important is what these investigations could tell us that we don’t already know. Lawsuits resulting from the investigations into the tobacco industry changed the industry forever and confirmed what the public health community had suspected for decades: the industry was not only lying, it was actively involved in a campaign of denial and deceit.

Reynard Loki: What advice would you give to AG Schneiderman regarding his investigation into Exxon or to other attorneys generals in other states contemplating similar inquiries?

Katherine Sawyer: Don’t let the industry intimidate or mislead you. There are billions of dollars of profit at stake for ExxonMobil and they have proven time and time again that they will stop at nothing to get it.

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