A funny thing happened just as people started turning off their laptops and gearing up for the long President’s Day weekend last month. At 2 p.m. on Friday, with no news alert, press statement or announcement, ExxonMobil for the first time revealed who received its lobbying money and how much.
The world’s largest publicly traded oil and gas company didn’t lay its cards on the table without a push. A shareholder resolution filed by United Steelworkers last year compelled ExxonMobil to disclose lobbying activities and expenditures as well as its oversight process for lobbying decisions. Another resolution filed by the bank BNP Paribas prodded ExxonMobil to release a report on its climate-related lobbying in March.
Investors have pressed companies to disclose lobbying-related activities for more than a decade, arguing that lobbying can degrade a company’s reputation if it conflicts with the company’s stated priorities, which in turn impacts shareholder value. Their efforts have paid off: The 27 resolutions demanding increased disclosure that went to a vote in 2021 averaged approximately 40 percent support, according to investment management firm Boston Trust Walden.
Now the reports driven by these resolutions are beginning to roll in, and while they certainly provide some insight into the fossil fuel industry’s investment in political influence, a sleight of hand is preventing investors from seeing the companies’ full strategy. The ExxonMobil reports are a case in point and suggest the next steps investor groups may have to take to force more complete corporate disclosure.
ExxonMobil Names Names
Titled “ExxonMobil Report on Lobbying Activities,” the February report posted to the company’s website detailed all of the company’s political activity in 2020. The report is split into sections by lobbying type, for example grassroots lobbying and federal lobbying. Though some of this information was already publicly available—companies are required to file quarterly reports detailing their federal lobbying activities under the Lobbying Disclosure Act—other data, such as state-level lobbying, were previously difficult to find.
But the big news is in a section called “Trade Associations, Think Tanks and Coalitions,” which identifies 115 policy organizations that ExxonMobil collectively paid anywhere from $28 million to $44 million for lobbying during 2020 (the corporation gives expenditure ranges without explanation). Ranked from the largest beneficiary to the lowest, the American Petroleum Institute (API)—the US oil and gas industry’s largest trade association—was at the top, receiving between $10 million and $12 million to lobby on “energy and environment,” “regulatory” and other issues.
API is frequently cited as a proxy for the oil and gas industry’s climate-unfriendly efforts. An ExxonMobil lobbyist was recorded last year calling API the industry’s “whipping boy,” an entity that takes the heat for advancing policy positions that run counter to the stated positions of many of its trade association members. The incident laid bare for the public the oil and gas industry’s documented history of pouring money into third-party groups that serve as the front line in undermining science-based decision-making. French oil and gas company TotalEnergies withdrew its API membership in January 2021, stating that the company’s values and API’s activities were no longer “aligned,” and UCS has called on other oil majors—including ExxonMobil—to do the same.
The second largest beneficiary of ExxonMobil’s largesse in 2020 was the US Chamber of Commerce. The organization received between $2.5 million and $5 million, and two associated organizations—the US Chamber Institute for Legal Reform and the US Chamber Litigation Center—were also top beneficiaries, bringing the Chamber’s total to between $3 million and $6 million. The Institute for Legal Reform, focused on tort reform, and the Chamber Litigation Center, which represents the Chamber in its many filings against environmental regulators and advocacy groups and has attacked climate accountability litigation, are both headed by the Chamber’s general counsel.
The Chamber has tried to present a more climate-friendly face by publicly claiming to support the Paris climate agreement, but a recent report by the nonprofit Influence Map found that the organization continues to lobby against climate legislation, including methane-control regulations and the original Build Back Better plan.
Further down the list are organizations that may not be as immediately recognizable but are well known to UCS and other groups that track climate disinformation. They include the Western Energy Alliance, a Denver-based oil and gas industry trade association that funds several pro-fossil PR campaigns, including the Western Wire. Oil major BP ended its membership with the Western Energy Alliance in 2020 because of a “misalignment” with its climate policies, including “federal regulation of methane.” ExxonMobil also funded the Consumer Energy Alliance, a pro-fracking front group run by PR firms on behalf of fossil fuel companies.
What is bracing about these disclosures is not only the range of organizations ExxonMobil supports, but also the amount of money the corporation gives to them. The oil and gas sector is one of the biggest industry spenders on federal lobbying, and ExxonMobil is no slacker. In its February report, the company said it spent $6 million to lobby federal and state governments in 2020, but according to its disclosures to the Senate Office of Public Records, its federal lobbying alone came to more than $8 million that year. More than half of its state lobbying money went to Alaska, California and Texas.
Another dark corner illuminated by ExxonMobil’s lobbying report is the $1 million the company spent on Exxchange, its “online, grassroots community made up of energy supporters from around the country who are interested in the industry, and willing to engage with their respective lawmakers on public policy issues.” Among the issues that Exxchange “community” worked on is “the Colorado Oil and Gas Conservation Commission’s proposal to increase oil well setbacks to 2,000 feet.”
As documented by the recent UCS report “Colorado Targeted by Fossil Fuel Industry’s Disinformation Playbook”, several front groups funded by the fossil fuel industry opposed a grassroots-driven ballot measure that would have required fracking operations be set back 2,500 feet from schools, drinking water sources, and other vulnerable sites. The measure was based on the scientific consensus that a setback of 2,000 to 2,500 feet is necessary to protect public health and safety by reducing air and water pollution. Most of the $17 million the ballot measure opponents raised came from energy companies and their front groups.
Full Disclosure?
Some investor activists commended ExxonMobil for the report, and even called it a “benchmark.” However, they also said such disclosures could be expanded to include social media and advertising expenditures, as well as election-related spending. Another notable omission in the lobbying report is the position ExxonMobil and its trade-group partners took when contacting lawmakers and producing communications materials. Without knowing these kinds of details, investors—and the general public—have only part of the story.
Another question is whether the positions promoted by the trade groups ExxonMobil funds contradict the company’s stated support of a low-carbon future. An answer can be found in ExxonMobil’s report on climate lobbying, released in March in response to the BNP resolution’s demand to “report on corporate climate lobbying in line with Paris agreement.” The report assesses the company’s membership in 51 trade associations to see whether the groups counter ExxonMobil’s stated support for the Paris agreement’s target of keeping global warming to 1.5 degrees Celsius above pre-industrial levels.
Two trade associations—the Independent Petroleum Association of America and the American Fuel and Petrochemical Manufacturers—were assessed as “misaligned” due to their opposition to such policies as tighter methane regulations and low-carbon fuel standards. Yet the report states that ExxonMobil will retain its memberships because the associations work on other issues that the company finds valuable. The report even contains a two-page case study on API as a “helpful example” of a group that works on a broad range of issues useful to ExxonMobil, even if their climate policies diverge.
This failure to put their money where their mouth is shows why disclosure is only the first step in holding fossil fuel companies accountable for their public statements on climate. A coalition of investor advocates addressed this issue recently by creating a Global Standard on Responsible Climate Lobbying, which will measure companies’ lobbying efforts to see whether they undermine the Paris agreement. The standard will evaluate individual companies and industrial sectors for disparities between their public stance on climate change and their political activities behind the scenes.
Shareholder advocates have made great progress by forcing ExxonMobil and other companies to disclose their lobbying activities, but the results show that disclosure, while necessary, is not sufficient. The stakes are too high for fossil fuel companies to continue funneling money to organizations that undermine progress. Other companies are scheduled to issue lobbying reports in the coming months. We’ll see whether they reveal that they are still trying to stack the deck in their favor.