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All companies, including fossil fuel companies, operate with a social license. (Photo: Pete Markham/flickr/cc)

Why The Investigation Of ExxonMobil Matters

Sometimes simple truths lie dormant for a long time until they are powerfully brought to our attention. But, once our understanding is kindled, the implications—and changes in public attitudes—can spread like wildfire, gathering momentum at a breathtaking pace.

That is what seems be to happening right now with a simple, but powerful idea: that, for decades, the world’s largest fossil fuel companies knew all about the harm their products posed to the planet, yet many chose to deceive the public about climate science and block meaningful reform. Now that this information has been so forcefully brought out, momentum is building fast to hold these companies accountable.

The Union of Concerned Scientists’ pathbreaking report The Climate Deception Dossiers, augmented by subsequent investigative reporting by Inside Climate News and the Los Angeles Times, have set off a whirlwind of activity, including calls for investigation by three presidential candidates, statements by a former tobacco prosecutor noting the parallel between the tobacco companies and fossil fuel industry, and op-eds in various national newspapers decrying this conduct. Even the Dallas Morning News, the hometown paper of Exxon Mobil, has jumped in to the fray with an editorial critical of the company’s behavior.

In the latest development, the New York state Attorney General has now begun an investigation into whether one company—Exxon Mobil–deceived its shareholders and the public. This is a very significant step.  The New York Attorney General has subpoena power, meaning he has the ability to require Exxon Mobil to turn over documents even without a lawsuit pending. And, because the investigation centers on deception (broadly defined as the disparity between what Exxon Mobil knew and what it told its shareholders and the public), the scope of the document requests are likely to cover a wide range of conduct spanning many decades.

It seems quite likely that this investigation will unearth new information that goes well beyond what is currently known, and this new information may, in turn, fuel shareholder resolutions, divestment, and litigation. It should be remembered that the tide turned on tobacco companies when state attorneys general banded together and through the legal discovery process, obtained previously confidential documents that starkly exposed tobacco companies’ intentional deception on the dangers of smoking.

It also seems probable that New York will not stand alone in this effort.  Just as the tobacco litigation was ultimately brought by many state attorneys general, I would anticipate that a number of other states will follow suit in this matter as well. A sufficient number would also likely impel a federal investigation.

Why does all of this matter?

All companies, including fossil fuel companies, operate with a social license. That social license makes it possible for companies to sell their products to consumers who trust them, and gives them the ability to advertise and otherwise operate in the public sphere, even influence public affairs. But once that social license is lost, consumers may abandon such companies (provided there are alternatives), and their power to shape policy can either erode or be curtailed.

The New York state AG investigation threatens to expose many new details about Exxon Mobil’s apparent efforts to mislead the public about climate science and climate policy and may expand to other companies as well. We will have to wait and see how this develops, but it seems increasingly likely that this investigation, at a minimum, will finally force fossil fuel companies to halt further deceptive acts while this gets sorted out. In the longer term—and this is likely a way’s off—it may encourage some companies to really put their muscle behind needed reforms, such as carbon pricing.  Some companies have already called for this, but have not spent political capital to achieve it, because up to now there has been no incentive to do so.

The air is remarkably fresh and clear on the precipice of a tipping point.

© 2021 Union of Concerned Scientists

Ken Kimmell

Ken Kimmell is president of the Union of Concerned Scientists and has more than 30 years of experience in government, environmental policy, and advocacy. He is a national advocate for clean energy and transportation policies and a driving force behind UCS’s “Power Ahead” campaign to build a large and diverse group of clean energy leadership states.

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