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An Open Letter to Yale on Investments in ExxonMobil

Graphic by Joseph Valdez

Dear Yale Community,

Following the Yale Corporation’s February meeting, The Yale Daily News reported that the University is examining its investments in ExxonMobil. Jonathan Macey, the chair of Yale’s Advisory Committee on Investor Responsibility (ACIR), said that the committee “may be in contact with [ExxonMobil] at some point.” A meeting would likely focus on whether Exxon’s alleged funding of climate change denial is a social injury worthy of divestment.  Yale’s guidelines for ethical investment prescribe divestment if dialogue with a company is unlikely to eliminate a socially injurious company practice “within a reasonable period of time.”

We applaud Yale for this investigation and would like to provide the ACIR and Yale Student Body background on Exxon’s response to climate denial accusations, based on our personal experience engaging with Exxon for two years. In 2015 and 2016, we co-filed a shareholder resolution with Exxon calling for better disclosure of the company’s lobbying policies and expenditures. We hope that Yale will come to the same conclusion that we did—Exxon has long obstructed the development of public understanding of climate change and government action on climate change, and that obstruction continues today.

The story begins in the late 1990s, when Exxon and other fossil fuel companies drafted the “Global Climate Science Communications Action Plan” with the goal of challenging the scientific certainty behind the Kyoto climate treaty.  The companies wrote that “there may be no moment when we can declare victory for our efforts” until “there are no further initiatives to thwart the threat of climate change.” This plan identified the American Legislative Exchange Council (ALEC), a group that produces prototype legislation, as key to the implementation of the strategy.  

ALEC has been very active in promoting scientific uncertainty regarding climate change.  In 1998, ALEC developed the “Interstate Research Commission on Climatic Change Act”, which states that there is “a great deal of scientific uncertainty” regarding climate change and requires specific attention to be paid to alternative hypotheses during peer review.  In 2000, ALEC began pushing the “Environmental Literacy Improvement Act” to promote “countervailing scientific and economic views” on environmental issues, despite there being a scientific consensus on climate change.  ALEC updated both bills in 2013 and continues to promote them today.  Furthermore, ALEC provides a platform for climate misinformation at its annual conferences; speakers like Joe Bast, CEO of the Heartland Institute, and Marc Morano, famed founder of climate denial site ClimateDepot.com, rejected the scientific consensus on climate change in 2014.  Stephen Moore, a member of ALEC’s Private Enterprise Advisory Board, told 2015 conference attendees that “The biggest scam of the last 100 years is global warming.”

In 2007, Exxon committed to stop funding climate change denial and reiterated its commitment in 2015.  Why, then, does Exxon continue to fund ALEC? When we asked former Exxon CEO Rex Tillerson about the problematic nature of Exxon’s representation on the board of ALEC, he said, “[w]e have found our engagement with them [ALEC] to be very productive in a number of broad areas … particularly educational reform.” In subsequent conversations we had with the company, Exxon representatives repeated this explanation and further alluded to ALEC’s work on STEM lobbying.  However, Exxon’s argument does not stand up to scrutiny.  ALEC’s only bill tagged both as “science” and “education” is the aforementioned “Environmental Literacy Improvement Act”.

We doubt The Yale Corporation would view ALEC’s work on STEM education as favorable, much less as adequate justification for Exxon’s continued financial support of the organization.  

While Exxon does acknowledge the problematic nature of ALEC’s stance on climate change, the company notes that it is trying to improve ALEC’s policies from within. Exxon will likely point to its recent carbon tax presentation at ALEC’s annual meeting. Presumably Exxon has attempted to reform ALEC since disavowing climate denial in 2007.  Clearly, these efforts have been unsuccessful. If the company had the power to radically alter ALEC’s approach towards any single issue, one would expect that the bills emphasizing uncertainty in the face of scientific consensus would have been discarded after Exxon’s 2007 announcement. One might also expect that climate-denying speakers would not have been invited to ALEC conferences and furthermore that ALEC would have, after four years, rescinded its 2013 resolution opposing “all federal and state efforts to establish a carbon tax.”

And it’s not just ALEC.  Exxon has representation on the board of directors of the American Petroleum Institute (API) and on the executive committee of the National Association of Manufacturers (NAM).  Both strongly oppose climate policy—the nonprofit InfluenceMap, which scores climate policy engagement, gives both organizations an “F.”  While Exxon publicly proclaims support for a carbon tax, its leadership role in these organizations  speaks volumes.

We are heartened by the fact that Yale has expressed interest in engaging with Exxon.  We hope that the ACIR will enter into any discussions with the company informed and prepared to address the most pressing issues with Exxon’s past and ongoing efforts to obstruct productive action on climate change.

Sincerely,

Gabe Rissman and Russell Heller

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