Exxon booted from climate group after lobbyist goes off script on carbon tax

By Kevin Crowley and Ari Natter on 8/8/2021

HOUSTON (Bloomberg) - Exxon Mobil was suspended from the Climate Leadership Council, a pro-carbon tax group backed by conservation groups and some of the world’s biggest corporations.

The move comes just weeks after an Exxon lobbyist was secretly recorded by Greenpeace saying that the oil giant only voiced support for a carbon tax because it knew such a policy would be almost impossible to implement. Exxon was one of the CLC’s founding members when it was formed in 2017; other participants include BP Plc, Goldman Sachs Group Inc., and Microsoft Corp..

“After careful consideration, we have decided to suspend ExxonMobil’s membership in both the Council and Americans for Carbon Dividends, our advocacy arm,” CLC Chief Executive Officer Greg Bertelsen said in a statement on Friday.

Exxon CEO Darren Woods apologized for the lobbyist’s comments at the end of June, saying they “in no way represent the company’s position” and reiterated support for a carbon tax. The oil explorer already was under intense investor pressure to bolster emission-reduction efforts after an activist investor won a key boardroom battle that replaced a quarter of directors.

“CLC’s decision is disappointing and counterproductive,” Exxon spokesman Casey Norton said in an email. “It will in no way deter our efforts to advance carbon pricing that we believe is a critical policy requirement to tackle climate change.”

Momentum for a carbon tax is gaining support as a way of combating climate change. Advocates say it would incentivize companies and consumers to pollute less. The American Petroleum Institute, the powerful oil-industry trade group that counts Exxon among its members, endorsed such a policy earlier this year.

But a tax that could increase the costs of driving, flying and importing is likely to face stiff resistance from some quarters. The Climate Leadership Council advocates that any proceeds should be directly returned to taxpayers through “carbon dividends.” It also wants simpler carbon regulations and similar fees charged on foreign imports to create a level playing field.

The World Resources Institute, also a founding member of the CLC, welcomed Exxon’s removal.

All companies should “re-examine their lobbying, political spending and participation in trade associations to ensure their actions are fully aligned with their public statements on climate change,” the WRI said in a statement.

Exxon will mull “more aggressive objectives” on emissions, Woods said last month, citing input from its new directors. The company is considering a target to zero out carbon emissions from its own operations, the Wall Street Journal reported Thursday.

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