At a recent annual shareholders meeting, Rex Tillerson, Exxon’s longtime Chairman and CEO, did something very unusual for a business executive: he questioned the global warming hysteria.
Tillerson said that models predicting the effects of global warming “just aren’t that good,” and that it would be very difficult for the world to meet aggressive emission-reduction targets. He further noted that technology can help deal with rising sea levels or changing weather patterns “that may or may not be induced by climate change.” Tillerson added, “Mankind has this enormous capacity to deal with adversity. I know that is an unsatisfactory answer to a lot of people, but it’s an answer that a scientist and an engineer would give you.”
To compound his sins, Tillerson then rejected calls to invest in faddish renewable energy schemes such wind and solar saying, “We choose not to lose money on purpose.” According to the above article, the audience broke out in applause.
Shock isn’t the word. Business executives, especially those leading large, publicly-traded firms, have a great terror of bad publicity. Witness the absurd recent actions of Tim Hortons, an immensely popular Canadian coffee chain, in pulling ads for Enbridge, one of the world’s largest energy distributors. The ads, broadcast via a CCTV network that runs in many of the chain’s restaurants, extolled the benefits that Enbridge and the rest of the oil and gas sector bring to the Canadian economy. Those ads ran afoul of an activist group that most Canadians had never heard of, SumOfUs.
In order to appease a group of activists, most of whom I suspect have never been in a Tim Hortons, the chain pulled the ads. This was interpreted as an insult by many loyal customers whose livelihoods depend on the oil and gas business. The first rule of business is to know thy customer. It’s a rule the leadership team at Tim Hortons broke completely.
While disappointing, the decision to pull the Enbridge ads was hardly surprising. Many business leaders are deeply uncomfortable in the public spotlight and are easily intimidated by clever groups like SumOfUs. This is one of the biggest problems that advocates of free markets face: trying to save capitalism from the cowardly capitalists.
Instead of robustly defending the system that gave them wealth and prominence, many CEOs spend their days apologizing for the high crimes of turning a profit and viewing the natural world as a bounty to benefit mankind. The default position instead is to talk about “stakeholder consultations” and keeping the environment in a “pristine” condition.
For those not in the know, stakeholders — at least in the sense the word is usually employed — is a fancy way of saying busybodies. They are not necessarily shareholders, employees, or anyone with a valid legal stake in the business. As for ‘pristine’? The last time nature was in a pristine condition, at least so far as man’s activities on earth are concerned, our ancestors were hunting naked in the savannahs of Africa.
Capitalists who refuse to defend capitalism are like turkeys voting for Thanksgiving. Mr Tillerson has wisely chosen a different approach.