A March 2019 report holds that the five largest publicly-listed oil majors are engaged in misleading climate branding and lobbying.
Climate change is the difference in the statistical distribution of weather patterns that last for an extended period of time. Global warming is the observed century-scale rise in the average temperature of the Earth's climate system and its related effects. Climate change poses a fundamental threat to places, species and people’s livelihoods. Sea levels are rising and oceans are becoming warmer. Longer, more intense droughts threaten crops, wildlife and freshwater supplies.
The most controversial aspect of climate change is whether human beings cause direct impact on climate. Multiple studies published in peer-reviewed scientific journals show that 97% or more of actively publishing climate scientists agree that climate-warming trends over the past century are extremely likely to be caused due to human activities. Some of these impacts include altering natural ecosystems, extinction of animal species, threats to food and water supplies, dislocation of human populations due to rising sea levels= and heat waves affecting large portions of the world. A leading suspect in these changes is the burning of hydrocarbons such as oil. Still, there is an overarching narrative, bolstered by pockets of incendiary rhetoric that informs its audience that humans cannot be responsible for climate change.
A March 2019 research report published March 22, found that the five largest publicly-traded oil and gas companies, Exxon Mobil, Royal Dutch Shell, Chevron, British Petroleum (BP) and Total, have invested over US$1 billion in the three years following the Paris Agreement on “misleading climate-related branding and lobbying.” In the months prior to the 2018 US mid-term elections, US$2 million was spent by the oil-giants and their affiliates on social media platforms promoting the benefits of increased oil production. In a separate effort, BP and Chevron donated over US$13 million in aid of a successful campaign to stop the institution of a carbon tax in Washington state. The five majors now spend about US$195 million a year in branding campaigns in order to project the image that they support action on climate change, the report found.
The research devised a methodology that employed “best-available disclosures and intensive research of corporate messaging to evaluate oil major spending aimed at influencing the climate agenda, both directly and through their key trade groups.”
In response to the findings of the report, Royal Dutch Shell said, “We firmly reject the premise of the report. We are very clear about our support for the Paris agreement, and the steps that we are taking to help meet society’s needs for more and cleaner energy.” Note the explicit use of ‘more and cleaner energy.’ Shell’s position does not deny the findings of the report because cleaner energy can be realised by more efficient consumption and production methods. The semantics employed with “more and cleaner” rather than ‘more clean energy,’ is of significant value; the statement still propagates producing more conventional energy.
It is within the profit interests of the oil-majors to lobby world leaders to increase oil production and consumption. Lobbying efforts, especially in the US, despite increased scrutiny, are not illegal and continues to be a source of revenue for politicians. Social media and branding efforts, especially that employs ethically dubious practices of misinformation, has a profound impact on public perception.
Conversely, the technology available for producing clean energy is still limited. The world cannot afford to abruptly wean itself off hydrocarbons without giving up its current standard of living. It remains true that the world still has a need for such fuel, and increasing consumption rates demand ‘more and cleaner energy.’
The methodology used by the research group is potentially suspect. It employs an analysis of “messaging” in order to glean a clear picture of the intentions of the oil majors. It also employs estimation in order to define spending. It is possible that the oil-majors remain true to their pledges after the Paris Agreement, with the understanding that increased production is required in the short-run. There is also market evidence for existing, and increasing, investment by the oil-majors into renewable and clean energy.
Our assessment is that the report paints typical practices by multi-national companies in an increasingly interconnected and politically active world. We believe that while the oil-majors may engage in misleading ‘messaging and branding’ conducive to their profit margins, the effects of climate change remains real. We believe that public pressure in response to reality will win out eventually, compelling the majors to invest further in renewable and clean energy.