By Robert Conrad
Gone are the days in which corporations could operate with the sole responsibility of turning a profit. With the rise of the Internet and social media, we have become more aware of a company's actions and whether or not it is truly invested in our long-term existence. However, when a large corporation's actions are negatively impacting the environment, yet it possesses the funds necessary to research and possibly enact greener alternatives, the corporation become morally repugnant. ExxonMobil is a recent example of what happens when a company puts profits ahead of social responsibility, going so far as to even put a lid on its actions.
In 2007, amidst pressure from shareholders, ExxonMobil announced that it would no longer fund climate change denial efforts. However, since 2008, the Guardian states that the oil and gas giant had given more than $2.3 million dollars to Republican members of Congress who deny climate change, as well as the American Legislative Exchange Council, an ultra-conservative group that states that carbon dioxide is the "elixir of life." Environmental groups and campaigners have confronted ExxonMobil regarding these relationships, stating that they create a "climate denial industry" that downplays the seriousness of global warming. ExxonMobil's lack of initiative regarding global warming even led to a shareholder revolt in 2008, led by none other than the Rockefeller family, whose ancestor John D. Rockefeller founded the original oil company at the core of ExxonMobil.
Since 2008, ExxonMobil has cut funding to multiple groups that downplay current global warming trends or attack policies that will help solve the problem. However, it has come to light that Exxon knew about the dangers of global warming and how their efforts exacerbated the problem as far back as 1981, yet continued funding anti-climate change groups. As for now, this deniability has become the biggest barrier between the United States and effectively addressing global warming.
The continued investment in tar sands and oil shale by energy companies like ExxonMobil, along with global reliance on liquefied natural gas and gas flaring during excavation, all cause carbon emissions. In fact, 82 percent of global warming emissions from the United States are attributed to energy use, with oil accounting for 42 percent of those emissions.
To combat this, some countries and municipalities have enacted carbon abatement regulations. In Europe, a cap-and-trade scheme is put in place that limits the amount of emissions a company can disperse, which prompts the company to innovate in order to meet or fall short of that limit. Though somewhat behind, the United States is also implementing CO2 abatement policies across the country, with California's recent research into low-carbon fuel standards. Short of legislation, energy companies themselves also have the power to enact change by abiding by these regulations, utilizing GIS systems to determine their environmental impact and being transparent with the information that they acquire from those systems. Given the power that companies like ExxonMobil have in legislature, they have the power to enact many positive changes.
Despite this, ExxonMobil's recent forays in the media display perfectly the backlash that a corporation can expect when it does not practice a clear corporate social responsibility policy. Had ExxonMobil been doing so, it would have either found a way to reduce its impact or research greener alternatives in the interest of human preservation. Instead of investing in greener alternatives, ExxonMobil opted to invest in politicians and pundits who believe that climate change is a hoax. Unfortunately, factors like global warming have the potential to negatively impact future generations whose environmental efforts may be largely undermined by big energy companies endlessly pumping more carbon dioxide into our atmosphere.
In fact, history is rife with corporations who have faced financial or managerial scandals, including Enron and Worldcom, that were all pursuant of personal gain at the expense of social responsibility. ExxonMobil's inaction and continued excavation efforts since 1981 suggest that it was not only aware of the problem, but did nothing in the pursuit of short-term gains. The philosophy of economist Milton Friedman that states that a corporation's sole responsibility is to make as much profit as legally possible has fallen under scrutiny amid these scandals.
In contrast, Drs. Nickles and Schiebert of Pepperdine University have stated that in order for corporations to be successful, they need to be socially responsible beyond what the law requires. Corporations not only have a moral responsibility to their stakeholders, but to everyone who comes into contact with them as well.
One company that has enacted a successful corporate social responsibility policy is the Verdigris Group, a real estate development and consulting firm. It accomplishes this by focusing on energy-efficient construction and occupant health while reaping the financial benefits of operating more efficiently. Not only is the Verdigris Group saving money and reducing its carbon footprint, but it's also building a reputation built on trust and mutual respect.
Another company that has successfully implemented social responsibility is RBC Wealth Management-USA, headed by John Taft. RBC has spearheaded the Blue Water Project, a 10-year global commitment to protect natural watersheds. Under this initiative, $50 million is pledged to organizations whose purpose is to protect these watersheds. Other projects that can be funded by RBC include the Children's Mental Health Project, After School Project and Olympians Program. Through this, RBC is not only attending to environmental concerns, but also social concerns through various funding programs.
With all of us living on this planet together, not even corporations are immune to the negative implications that can come from unethical business practices. The focus should not be on short-term gains, but whether or not we will continue to sustain a viable planet. ExxonMobil can certainly learn something about social responsibility from companies like RBC and Verdigris Group.
Image credit: GreenThoughtBlog
Robert Conrad is a former Business student and avid admirer of the Pacific Northwest. In his spare time, he likes to play copious amounts of video games and go on ridiculously long walks. Follow him on Twitter.