No, Big Oil Still Doesn’t Care About Saving the Planet

This isn't the 'sea change' in the fossil fuel industry we're being told it is.

by Connor Woodman

5 June 2021

Syncrude Aurora Oil Sands Mine, north of Fort McMurray, Canada. Elias Schewel/Flickr

In what’s being treated as a “sea change” for big oil, a triple blow was meted out to the industry last week. Shell was ordered by a Dutch court to speed up its emissions reduction programme, activist investors succeeded in replacing three of Exxon Mobil’s board members, and shareholders at Chevron backed a motion pushing for a CO2 wind-down.

These shareholder and boardroom battles reflect a long-brewing fight within capital over the future of the fossil fuel industry. As the world’s ecology collapses under the strain of two centuries of industrialism, the viability of the coal, oil and gas industries is a hot topic in elite capitalist circles.

Part of this new struggle is playing out via the power of shareholders to influence private companies’ business operations. Publicly listed companies – including the big fossil fuel players – divide up ownership of their businesses through issuing shares. These shares are purchased by private individuals and ‘institutional investors’ like pension funds, universities and insurance companies. These investments are often taken care of by asset management companies that spread the investments across a portfolio of holdings.

These asset management companies, then, have a degree of control over the flow of capital. Huge sums of value are made available to certain economic sectors and kept from others. When these companies exercise their influence over this capital – both through the threat of divestment and their voting rights and status as shareholders – they can wield substantial power over the direction of our civilisation.

Built into this system is the possibility of conflicts between the boards of individual companies (the individuals who oversee the strategic direction of private corporations), the asset management companies, and the institutional investors with ultimate ownership of the capital.

This latent possibility of conflict is playing out in the big oil battles of last week. Institutional investors, asset management companies and so-called activist investors are increasingly concerned with Environmental, Social and Governance (ESG) investing. An ESG investment is not one that aims to provide environmental or social benefits – say, through providing capital to renewable energy. Rather, ESG investing is based on the belief that taking into consideration companies’ wider social impacts will ultimately benefit the long-term profitability of companies themselves, through, for instance, protecting them from future state intervention. ESG investing is, ultimately, exclusively about maximising total profits. (‘Ethical investing’, a marginal phenomenon, takes place when non-financial considerations drive the decision to invest.)

Of particular import is the fear – once a fringe concern of campus activists in the environmental divestment movement – that coal, oil and gas will become ‘stranded assets‘. If states force fossil fuel companies to keep their current and expected reserves in the ground (as the International Energy Agency just declared necessary), all the money invested in securing those assets will become ‘stranded’ or lost. The value of fossil fuel companies could plummet.

ESG investors, therefore, are desperately trying to force big oil and its siblings into changing their business model, planning for the likely day when their core economic activities are outlawed. And, as shown last week, these attempts are gaining traction. Are capitalism’s inner mechanisms, then, finally working to save themselves from self-immolation?

As Nancy Fraser puts it, capitalism has operated through historically-specific “socio-ecological regimes of accumulation” – regimes which create and structure a particular division between nature and economy. When the contradiction between accumulation and ecological sustainability starts to rupture a given regime, “the established organisation of the economy-nature relation appears dysfunctional, unjust, unprofitable or unsustainable and becomes subject to contestation. The effect is to incite broad struggles among rival political blocs.” The 19th century inter-imperial wars over the dwindling supply of guano – a potent fertiliser that powered industrial agriculture – represent an example from times past. Last week’s tensions in Shell, Chevron and Exxon are instances of the new resource battles emerging in the towering heights of bourgeoisdom.

What is less clear, however, is whether the outcome of this struggle will be anywhere near enough. The only reason ESG investing makes any sense within the current logic of capitalist investment is because a sphere outside of capital’s economic mechanisms – the state, partly in reaction to pressure from popular movements, partly in order to plan the long-term conditions for capital accumulation – is stepping in to force change. The impetus is coming from the political realm, primarily national state action and international accords, and a wider public clamouring for action. ESG investors are making the bet that states will legislate in line with the Paris climate agreement, forcing fossil fuel reserves to stay in the ground. Without the intervention of governments, coming partly off the back of decades of climate justice organising, capitalism would continue ploughing over the cliff into the fires of Mount Doom.

And indeed, that is still the path we are on. Three board members changing at Exxon won’t halt ever-escalating CO2 emissions. The reality remains that climate collapse is happening, now, and will intensify each year throughout the life of anyone reading this – even in the best case scenario. These moves are far too little, far too late for those in Oceania who will see their entire countries engulfed by the rising seas, or farmers in the Global South fleeing from drought. Nothing within capitalism incorporates those people’s lives into its value system.

Not only that, but these investor moves are a secondary, trickle down effect of political action on climate change. As with nearly everything in capitalist society, the demands of the climate movement for an end to ecological destruction and the moves of government to reduce CO2 are being mediated through the profit motive and the need to continue accumulating capital. This merry-go-round of shareholder battles is not about stopping climate collapse – it’s about ensuring fossil fuel companies continue to return dividends to their shareholders in the decades to come. Those same fossil fuel companies that have helped cause the greatest ecological conflagration in the history of Earth, and have waged a decades-long campaign to deny and conceal this fact from us all. In a minimally rational socio-economic structure, these companies would have been brought into public ownership and their economic activities transformed years ago. Instead, the only way to change their behaviour in our system is through appeals to their private profitability.

Underlying these issues are deeper questions, never posed in press commentaries on the boardroom struggles. Why are the great pools of capital, essentially the power to direct the development of civilisation, under the control of small groups of trustees and asset management companies, made available to a tiny number of corporate board members? As the late sociologist Erik Olin Wright dreamt in Envisioning Real Utopias, aren’t these pools potential reservoirs of ‘social capital’ that could be taken under democratic control through unions, the state and community organisations?

Rather than putting a cross next to a name every five years, a truly democratic system would have ways of collectively deciding where society’s total resources are put to use, which parts of our civilisation should be adequately resourced, and which should be shut down. This is, in a way, what proponents of a Green New Deal are advocating for – a huge programme of planned investment, controlled through public bodies like the state, that will shift the energetic basis of our civilisation from fossil to naturally renewing sources.

Currently, all considerations – including the long-term viability of human society – are relentlessly mediated through the profit incentive, legally and institutionally obligatory on the small number of individuals with the right to decide. In modern capitalism, saving the world from destruction would be, at best, a lucky accident, a bi-product of the relentless drive for profitability. In truth, it will take a popular counter-power able to fracture and overcome elements of capitalist logic if we are to salvage something humane from the wreckage that lies ahead.

Connor Woodman writes for Novara Media and other outlets.


Build people-powered media.

We’re up against huge power and influence. Our supporters keep us entirely free to access. We don’t have any ad partnerships or sponsored content.

Donate one hour’s wage per month—or whatever you can afford—today.

We’re up against huge power and influence. Our supporters keep us entirely free to access. We don’t have any ad partnerships or sponsored content.

Donate one hour’s wage per month—or whatever you can afford—today.