With all the problems in the world, from massive inequality to the climate crisis, you’d think voluntary guidelines to improve corporate environmental and social practices would be a no-brainer. After all, addressing those critical issues can also boost a company’s bottom line.
But companies with business models based on activities that create greater inequalities and cause harm to the air, water, and soil, are threatened by ESG (environmental, social and governance) investor policies. ESG encourages investors to consider criteria such as environmental risk, pay equity and transparency in accounting.
That’s why Big Oil is fighting back. Much of the “anti-woke” rhetoric you hear from right-wing politicians and media is funded by fossil fuel interests.
Given what we know about the industry’s decades-long efforts to stall action on climate change, sowing doubt and confusion regarding the clear scientific evidence, it’s no surprise that the same people are putting enormous amounts of money and resources toward obstructing efforts to introduce greater corporate responsibility.
Because most moneyed people have diverse portfolios, the study found, losses would only make up about one per cent of their net wealth.
A report from U.S.-based Pleiades Strategy found that in 2023, fossil fuel money was behind 165 pieces of legislation introduced in 37 states “to weaponize government funds, contracts, and pensions to prevent companies and investors from considering commonplace risk factors in making responsible, risk-adjusted investment decisions.”
Most of the legislation, aimed at restricting the use of ESG investment criteria, was based on “model bills circulated by right-wing organizations that targeted diverse aspects of state financial regulation…”
Those organizations include four of the country’s most influential think tanks: the American Legislative Exchange Council, the Heritage Foundation, the Heartland Institute, and the Foundation for Government Accountability. All are affiliated with the State Policy Network, which receives funding from the fossil fuel billionaire Koch family, the Guardian reports.
The Texas Public Policy Foundation (which gets money from Koch-supported organizations, as well as ExxonMobil, ConocoPhillips and Chevron) and the American Petroleum Institute, an oil and gas lobbyist, have also been involved.
Some have worked to get laws passed to severely punish people protesting pipelines.
The Pleiades Strategy report found the groups had limited success, getting only 22 of the proposed 165 anti-ESG laws passed, thanks to opposition from business, labour and environmental advocates, but laws that did pass — even those that were watered down — could affect climate and other policies to protect people and the planet.
Report co-author Connor Gibson warned that lack of success isn’t likely to deter oil interests. “We think this is the latest iteration of climate denial and obstruction and delay,” he told the Guardian.
It’s astounding that people would put their short-term economic interests ahead of human health, well-being, and survival. But that’s what they are with all their influence over politicians, governments and media.
The fossil fuel economy is about more than just money, though. It’s also about consolidating power and wealth in a small number of people and companies, which creates greater inequality. This is far more difficult to do with energy from the sun and the wind compared to energy from coal, oil and gas.
Numerous studies show the clean energy transition would save enormous amounts of money in everything from health care to energy expenses. Continuing to use coal, oil and gas, meanwhile, will become increasingly costly and deadly.
Leaving fossil fuels behind won’t even be that hard on investors, according to a recent study published in Joule. It found that in high-income countries, the richest 10 per cent of the given country’s population would bear two-thirds of the investment losses from scaling back fossil fuel production, with the wealthiest one per cent taking half that hit. Because most moneyed people have diverse portfolios, the study found, losses would only make up about one per cent of their net wealth.
Researchers also found it would be cost-effective for governments to compensate those less well-off for any losses.
We have every reason to switch rapidly from fossil fuels to renewable sources — and to conserve energy and improve efficiency. We’re also increasingly finding that the corporate, political and media justifications for avoiding or delaying the necessary shift are brought to you by the industry itself, often clandestinely.
It’s time to get fossil fuel money out of politics and leave the oil in the ground.
