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Big Oil's Post-Trump About Face Proves Corporations Won't Regulate Themselves
The sooner we stop expecting companies like Exxon to be voluntary agents of social change, the sooner we can stop the flow of hypocrisy and greenwashing and start working on resolving the social and environmental crises that blight the lives of billions.
Mar 28, 2026
President Donald Trump has long called global warming a hoax, but his sweeping anti-climate agenda has stunned even many of his supporters. Since returning to the White House, he’s withdrawn the US from the Paris Treaty, rolled back critical greenhouse gas regulations, and opened up millions of acres of previously protected public land for oil and gas drilling.
In response, big oil and gas companies have abandoned, without the slightest resistance, the showy public commitments they had previously made to climate transition. For example, BP has slashed green energy expenditures by 70%, Equinor has cut back its renewable capacity targets by almost 40%, and Chevron has reduced its carbon-reduction capital expenditures to about 5% of its total capital expenditures. None of the world’s 12 largest oil and gas companies plan to decrease fossil fuel production, and all of them project that fossil fuels will continue to overwhelm other sources of energy for the foreseeable future, according to a recent evaluation.
Far from a change of heart, this is simply Big Oil returning to form. The petroleum industry has never been serious about curbing emissions, 90% of which globally come from fossil fuels. Indeed, after decades of investment, renewables still account for a minuscule amount—about 0.13%—of total energy produced by the world’s largest 250 oil and gas companies, according to a recent research paper. “I think the article resolves the debate on whether the fossil fuel industry is honestly engaging with the climate crisis or not,” said the paper’s lead researcher. “Their interest ends with their profits.”
Some oil companies, such as ExxonMobil, continue to promise to reduce emissions to net zero by 2050. This appears to align them with the consensus of climate science that this is necessary globally to limit warming to 1.5°C (2.7°F) above preindustrial levels. However, Exxon is typical in designating a narrow target of greenhouse gases to eliminate: only those from its own operations, mainly pumping and refining oil and gas, and from buying electricity generated by fossil fuels. This conveniently ignores greenhouse gases from the consumption of its gasoline and other petroleum products, as well as those of its suppliers—which exceed by four times the total covered by Exxon’s commitment.
We should have realized that companies, like Exxon, that knowingly act in pursuit of catastrophe cannot be trusted to stop of their own accord.
Exxon wants us to believe that running its pump jacks and refineries on solar and wind power puts it on the side of the climate transition. It’s cynical buffoonery. But it’s also a sign that America’s leaders and electorate have been willfully blind. We should have realized that companies, like Exxon, that knowingly act in pursuit of catastrophe cannot be trusted to stop of their own accord. As Shakespeare might have said, “The fault, dear Brutus, is not in Big Oil but in ourselves.”
The past is prologue. Ever since the advent of industrial capitalism in America in the early 1800s, corporations have consistently served one master, shareholders, delivering them profits by open competition in free markets. From the start, elites have insisted that corporations must regard financial and social objectives as mutually exclusive, even as a single-minded quest for profitability has pushed the system to its breaking point.
We saw the injustice of this belief in the late 19th century, when “robber barons”—who had clawed their way to the top of an unregulated, chaotic economy—justified poverty wages and harsh working conditions by co-opting Charles Darwin’s new theory of evolution, popularized as “survival of the fittest.” Railroad magnate Charles Elliott Perkins—who embodied Social Darwinism by rising from office boy to president of one of the nation’s largest railroads—declared his creed: “That a man is entitled to a living wage is absurd… [If] you take from the strong to give to the weak, you encourage weakness; therefore, let men reap what they and their progenitors sow.”
Early capitalism was marred by periodic, destructive economic downturns. But over time, government acquired fiscal and monetary tools to smooth the boom-and-bust cycles and soften the hard edges of fierce profit seeking through welfare programs, especially during the Progressive Era (1890s-1920) and the New Deal (1933-1938).
However, the bedrock of the corporate mission stayed solid even as the government built new structures on top of it. During the New Deal, for example, leading industrialists joined the American Liberty League to oppose innovations like Social Security. A League leader, echoing his counterpart six decades earlier, proclaimed, “You can’t recover prosperity by seizing the accumulation of the thrifty and distributing it to the thriftless and unlucky.”
The permanent establishment of a taxpayer-funded social safety net in the postwar period only reaffirmed corporations’ unwavering fealty to shareholder value. The president of the mighty Dow Chemical Company, Leland Doan, wrote in 1957: “Any activity labeled ‘social responsibility’ must be judged in terms of whether it is somehow beneficial to the immediate or long-range welfare of the business... I hope we never kid ourselves that we are operating for the public interest per se.”
The corporate community resisted even when the tide of public opinion turned against the malign Jim Crow segregation system in the 1950s and ’60s. When US Steel was accused of workplace discrimination in 1963, prominent academic Andrew Hacker struck back forcefully: “If corporations ought to be doing things they are not now doing—such as hiring Negroes on an equal basis with whites—then it is up to government to tell them so. The only responsibility of corporations is to make profits, thus contributing to a prosperous economic system.”
Predictably, that same decade, the corporate establishment dismissed the emergence of the environmental movement. In 1962, when Rachel Carson’s Silent Spring shocked the nation by exposing the harm to human and animal life posed by the unrestricted use of pesticides, a chemical industry spokesman responded, “If man were to follow the teachings of Miss Carson, we would return to the Dark Ages, and the insects and diseases and vermin would once again inherit the earth.”
Milton Friedman, Nobel Prize-winning economist and chief economic adviser to Ronald Reagan, famously summed up the unchanging corporate consensus in words still widely quoted today: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.”
For the most part, investors have held their noses and counted their gains. But starting almost a century ago, in 1928, when the invention of mutual funds opened up the stock market to the middle class, “ethical” funds, as they came to be known, entered the arena. They were marketed to individuals and families who wanted their portfolios to reflect their values, and to asset managers who wanted their clients to consider them good citizens.
It is folly to ask business to do the work of government.
For a long time, these socially responsible funds were a negligible part of the industry because they typically underperformed the market. These funds used a strategy called negative screening—excluding certain “sin” industries, such as cigarettes, liquor, and weapons. Unfortunately, negative screening typically yields lower returns (sin often pays in the stock market!) and greater price volatility, due to limited diversification. In addition, there is no reason to believe that negative screening has any discernible effect on stock prices, so it has no power to compel corporations to reform.
The answer to this quandary finally came in the early 2000s, in the form of a new stock-picking tool called Environmental, Social, and Governance, or “ESG” for short. The seductive promise of ESG is “doing well by doing good”—or getting rich by investing in companies that make the world better. On the back of this dream, capital invested in accordance with ESG principles has grown monumentally, to as much as $30 trillion, about one-quarter of the global total of assets under management.
ESG claims that adroitly managing environmental and social risks will improve profitability and, therefore, stock prices. But ESG only counts risks that are financially material, ignoring all social or environmental harm for which a company faces no financial penalty. As you might expect, this often bears perverse results. For example, cigarette companies kill their customers—you can’t get more anti-social than that!—but smoking is legal, and Big Tobacco rarely faces liability for cancer from smoking. That is why tobacco companies are sometimes awarded good ESG scores and even appear in some ESG stock funds. Likewise, fossil fuel companies, which have historically made high returns and avoided significant regulatory penalties, appear in 80% of ESG funds.Whether it be alcoholism, gambling addiction, gun deaths, climate change, or other iniquities, the damage that companies inflict on society without literally paying for it—or the negative externalities, as they’re called in economics—entirely escapes ESG’s radar.
Worse, the key assumption of ESG—that adept social risk management translates into higher profitability—is fundamentally unprovable. Many studies have attempted to show a strong positive correlation between specific ESG policies, like emissions reductions or heightened employee benefits, and financial metrics, like cost of debt or return on assets. But, as I explain in my forthcoming book on socially responsible investment, very few succeed. In the end, the research only allows you to draw one conclusion with confidence: that it is simply not possible to precisely define ESG practices at a granular level, measure their direct effect on financial performance, and compare these results validly across different companies.
But that does not stop ESG rating agencies from trying. ESG ratings have grown into a big business, since fund managers pay dearly for them to guide their stock selection. The rating agency reports are typically long, detailed, and quantitative—but completely unreliable. These reports may look sober and professional, like credit rating reports from companies such as S&P Global or Moody’s. But credit rating agencies are analyzing real financial values to assess a tangible corporate quality: its ability to repay its debts. The numbers are verifiable and have a proven relevance to the projected outcome. That is why credit ratings have a 90% correlation; S&P and Moody’s seldom disagree substantially on a company’s rating.
ESG ratings, by contrast, are all over the map, with a correlation of only 40%. Analysts point to three key factors: the rating agencies choose different terms to measure; they measure them with incompatible methods; and they use contradictory methodologies to combine these idiosyncratic measurements into final ratings. These discrepancies build on each other to produce wildly variant final scores. A company denigrated as a dog in ESG terms by one rating agency may be lauded as a star by another.
If ESG is just an illusion, and negative screening a disappointment, how should investors direct their capital to make corporations more socially responsible? The answer is, they shouldn’t bother.
In the game of capitalism, the role of corporations is to make as much money as they can, while playing by the rules. The role of the state, as we learned in the Progressive Era and the New Deal, is to revise the rules periodically to ensure fair play and a socially positive outcome—without hobbling the players. We do want fierce competition, but we don’t want to destroy the playing field in the process.
Today, corporate profits are at their highest proportion of GDP in 50 years, while wages are at their lowest. Overall, income inequality has never been greater, not even in the Gilded Age, the period immediately preceding the Progressive Era, when many toiled in Dickensian poverty while a few, like the Vanderbilt dynasty, flaunted their extravagant and lavish lifestyles. Now, like then, the people, with justification, are losing faith in the system.
Like our Progressive forebears, we will have to revamp capitalism in order to rescue it. Key objectives must include rebuilding organized labor, since what benefits unions benefits the middle class. We’ll also need to break up de facto corporate cartels that stifle competition, squeeze wages, and lower productivity. To counter the existential threat of climate change, we need a cap-and-trade system that makes industry a partner in carbon reduction, not an opponent, and can serve as a model for other public-private partnerships.
It is folly to ask business to do the work of government. The sooner we stop expecting companies like Exxon to be voluntary agents of social change and acknowledge that they are amoral profit machines, the sooner we can stop the flow of hypocrisy and greenwashing and start working on resolving the social and environmental crises that blight the lives of billions. The path to greater corporate social responsibility leads through the voting booth and the statehouse, not through Wall Street and the C-suite.
This piece was originally published by The MIT Press Reader.
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'We Lost Everything': Hawaii Swamped by Worst Flooding in 20 Years
Experts agree that the climate emergency caused by the burning of fossil fuels is making extreme rainfall events on the islands wetter and more common, reigniting the debate about who should foot the bill.
Mar 25, 2026
Hawaii was inundated by its worst flooding in 20 years over the weekend, in another reminder of how the climate crisis disrupts the lives of ordinary people by increasing the likelihood and frequency of extreme weather events.
Hawaii Gov. Josh Green on Tuesday formally requested federal aid for a series of storms this month that he said could cost the state more than $1 billion in debris clearing and repairs to homes, roads, and infrastructure.
“These storms have impacted every county in our state and stretched our emergency response capabilities,” Green said in a statement.
Hawaii's waterlogged woes began on March 10 with the first in a series of winter Pacific rainstorms known as Kona lows. The initial storm caused upwards of $400 million in damages, including to Maui's Kula Hospital, and left the ground saturated when another storm rolled in beginning March 19, leading to what Green told Hawaii News Now was “the largest flood that we’ve had in Hawaii in 20 years."
“Should the residents just consider it an act of God and open up their checkbooks whenever this happens when the record is clear about who knew what and when they knew it?”
This second storm inundated Oahu's North Shore on Friday night, necessitating more than 230 rescues and placing 5,500 people under an evacuation order at one point, according to The Associated Press. The storm damaged hundreds of homes as well as schools, airports, and highways. All told, the two storms dumped a total of four feet of rain on parts of Oahu and Maui, Green said, as CBS reported.
"We lost everything," Oahu resident Melanie Lee told CBS News after visiting her flood-damaged home on Monday. "My children's pictures. Just real sentimental stuff. Now it's like, now where we go from here?"
The agricultural sector was also hard hit, with farmers on Oahu, Maui, Molokai, and the Big Island reporting over $10.5 million in damages, according to Honolulu Civil Beat.
Yet Friday's storm was not the end. On Monday, another downpour brought flash flooding to southern Oahu, as rain fell at a rate for 2-4 inches per hour, shocking even meteorologists.
“When you think it’s over, it’s not quite over,” National Weather Service forecaster Cole Evans told AP on Tuesday.
Oahu Emergency Management Agency spokesperson Molly Pierce told AP: “Most of us have not seen something that just keeps going like this... We feel like we keep getting punched down. But we’ll keep getting back up.”
Experts agree that the climate emergency is making extreme rainfall events on the islands wetter and more common.
As Honolulu Today reported:
The intense flooding in Hawaii highlights the growing threat of extreme weather events driven by climate change. The frequency and intensity of heavy rainfall have increased in the islands, leading to devastating impacts on infrastructure, homes, and communities.
Retired University of Hawaii professor Tom Giambelluca, who now supervises weather monitoring towers, told Honolulu Civil Beat that scientists have observed Hawaii's weather getting dryer generally, while storms tend to drop more rain that causes more flooding.
“It’s not like we never had extremes before. You know, something like this could have happened with no warming, probably,” Giambelluca said. “But these kinds of events seem to be getting more frequent.”
US Rep. Jill Takuda (D-Hawaii) told Maui Now: “We are accustomed to saying, ‘Well, this was a 100-year flood,’ right?... Well, 100-plus-year floods are happening every few years. We literally have to throw away the book in terms of the way we used to look at weather patterns in Hawaii.”
The flooding is also an example of how the impacts of climate disasters can build on each other. Some of the rains fell on Lahaina in Maui, where soil is less absorbent due to scarring from 2023's deadly climate-fueled wildfires.
“We think about evacuation routes when it comes to a fire,” Maui resident Kaliko Storer told Maui Now. “And now we say, when are we going to really sit down and talk about these (flood) controls?”
The connection between the burning of fossil fuels and the uptick in extreme weather events is reigniting the debate about who should pay for the damages from storms like those that swamped Hawaii this month.
State lawmakers are working to pass legislation that would allow insurers to recoup some storm costs from oil and gas companies directly, as Honolulu Civil Beat reported Tuesday.
"This is the third generational rain event we’ve had in the last four weeks,” state Sen. Jarrett Keohokalole (D-24) said. Referring to reporting that large fossil fuels companies have known for decades about the climate-heating impacts of their products and chose to lie to the public instead of act, he added, “Should the residents just consider it an act of God and open up their checkbooks whenever this happens when the record is clear about who knew what and when they knew it?”
Hawaii is also one of several states that has sued Big Oil for climate damages.
Even as oil prices climb due to the US and Israeli war on Iran, Emily Atkin of Heated argued that disasters like Hawaii's prove that the cost is still deflated.
"This is what the true price of oil looks like: Hawaiians wading through their flooded homes while the state scrambles to find a billion dollars for cleanup," she wrote.
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‘Just as Big Oil Predicted’: Fossil Fuel Industry Under Fire as Record Heat Broils Western States
"Extreme heatwaves like the one impacting the Western US this month are one of the catastrophic disasters these companies predicted their conduct would bring about," said Public Citizen.
Mar 19, 2026
Spring has not yet even begun, but as science journalist Rebecca Boyle wrote Thursday for The Atlantic, "it feels like we skipped right to summer" across the Western United States, which is facing record temperatures this week.
As of Monday, 39 million people across California, Nevada, and Arizona were under heat alerts. Temperatures in Los Angeles are reaching "25-35 degrees above normal," records are being "rewritten" in Las Vegas, and Phoenix is facing temperatures of 105°F two months earlier than usual, according to warnings issued by the National Weather Service (NWS) this week.
"This is not normal. Or at least it wasn’t normal in the past," said Boyle, who explained that it was the result of hot air being trapped by "a bizarrely strong ridge of high pressure in Earth’s atmosphere," the kind that would be uncommonly strong even in the summer.
Citing a model created by the nonprofit group Climate Central, she said that human-caused climate change had made these extreme temperatures five times more likely.
The NWS warned that a heatwave in March is "very dangerous, particularly for those not acclimated to the heat and/or traveling from cooler climates.”
Counts by the US Centers for Disease Control and Prevention (CDC) show that 1,600-2,400 Americans die each year from heat-related causes, and they've more than doubled since 1999.
Meanwhile, a report from the Federation of American Scientists last year found that "the combined effects of extreme heat cost [the US] over $162 billion in 2024—equivalent to nearly 1% of the US GDP."
The Western United States has recently experienced its warmest winter on in recorded history, leading to a record snow drought. Scientists say this has depleted water supplies and will make the region more vulnerable to wildfires and drought later this year.
Climate scientist Daniel Swain told ABC News 10 of Northern California that this is only the beginning of how the climate crisis will impact the state in the coming decades.
"The hottest hots are already getting hotter, and they will continue to get hotter. We haven't seen the hottest temperatures that we're going to see in the next 20 or 30 years," Swain said. "We'll see an increasing number of years with severe wildfire conditions... We will also see increased risk of major flood events, either as snowmelt becomes more rapid in the spring or as winter storms drop even more rainfall more quickly."
The consumer advocacy group Public Citizen said heatwaves like this one are unfolding "just as Big Oil predicted."
"A relatively small number of major fossil fuel companies are responsible for the majority of all greenhouse gas emissions generated by humanity. Just 100 companies are responsible for 71% of all global greenhouse gas emissions generated since 1854, and just 57 companies are responsible for 80% of the emissions generated since 2016," explained a report published by the group Thursday.
"These companies didn’t just contribute to this heatwave—they did so knowingly," the report said. "For decades, Big Oil companies were internally forecasting exactly these kinds of climate disasters."
However, the report explains, the industry "developed and orchestrated a multidecade, coordinated campaign to defraud the public about the dangers of climate change, and blocked solutions that could have prevented these disasters."
A study published earlier this month by Geophysical Research Letters showed that as more carbon has been pumped into the atmosphere over the past 10 years, the rate at which the climate is warming has doubled.
Following this trend, it may be as soon as 2030 that the globe surpasses 1.5°C above preindustrial averages, at which point many climate risks, such as heatwaves, biodiversity loss, and food insecurity, are expected to be dramatically amplified, according to the Intergovernmental Panel on Climate Change.
"Big Oil companies have, indeed, cost this country and the world," Public Citizen said. "Extreme heatwaves like the one impacting the Western US this month are one of the catastrophic disasters these companies predicted their conduct would bring about. They should be made to pay."
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