The news that ExxonMobil has just posted the highest profits in history should bring down to earth those congenital optimists who, for the last 20 years or so, have been claiming that the best way to do well is to do good. ExxonMobil got their record-breaking billions the old fashioned way: through high oil prices.
ExxonMobil’s competitors Shell and BP have been self-appointed leaders of the Corporate Social Responsibility “movement,” with professed respect for the earth and human rights, concern about global warming and even support for the Kyoto Protocol. Much of this was mainly rhetorical, rather than substantive, but even so the implication was that their business model included positioning themselves for the renewable energy revolution. Who could argue with that?
Shell and BP represent the touchy-feely, greenwashy, clever and modern “energy” company. ExxonMobil is Old School, the Bad Boy of Oil. ExxonMobil pretty much ignores the ruckus about looming environmental catastrophe and goes about their business. In addition to oil drilling, that means influencing politicians, resisting and evading lawsuits, intimidating adversaries and sowing doubts about the reality of global warming. They don’t brag about their solar subsidiary, like BP, try to placate their critics, like Shell, or join Kofi Annan’s Global Compact, like hundreds of companies. We don’t imagine their executives feeling guilty about profiting from the Iraq War and Katrina, two important causes of higher oil prices.
The corporate responsibility “movement” got its start in the aftermath of the Bhopal tragedy in 1984. It’s sobering that 21 years later, the biggest and baddest company in the biggest and baddest industry is the most profitable corporation in the history of the world. The message for Wall St. is that even in the industry that threatens the entire planet, bigger is better and the old ways are the best ways. The heck with windfarms, look for more investment in ExxonMobil in 2006.
For corporate responsibility types, it’s time to be honest. Yes, occasionally, in some sectors, business conditions allow green and responsible companies to also be profitable. But in certain key industries – including the ones that threaten our planet and our health – windfall profits come from price gouging, war and exploitation. Success comes not from compromising with “stakeholders” but from delivering for stockholders. All oil companies, whether they have green logos or not, will be profitable this year, and it won’t be because they love the planet and its people.
We will never achieve independence from oil or seriously confront the challenge of climate change under conditions that reward $36 billion in a year to an oil company. It really is time for an Oil Change.