Guest essay by Eric Worrall
According to The Guardian, oil executives are so focussed on profit they are ignoring the opportunity to make even more money by investing in renewables.
Oil firm bosses’ pay ‘incentivises them to undermine climate action’
Lucrative pay and share options linked to continued extraction of fossil fuels by ExxonMobil, Chevron, Shell and BP
Lucrative pay and share options have created an incentive for oil company executives to resist climate action, according to a study that casts doubt on recent net-zero commitments by BP and Shell.
Compensation packages for CEOs, often in excess of $10m (£7.2m), are linked to continued extraction of fossil fuels, exploration of new fields and the promotion of strong market demand through advertising, lobbying and government subsidies, the report says.
The setup with executives runs counter to efforts around the world to keep global heating to 1.5-2C (2.7-3.6F) above pre-industrial levels.
Between 1990 and 2019 the four companies made a combined profit of about $2tn. A minuscule fraction of these funds has been invested in low-carbon energy.
ExxonMobil allocated 0.22% of its capital expenditure to low-carbon energy in the eight years until 2018. The share at Chevron was almost identical. Shell managed 1.3% and BP 2.3%. None were aligned with a 1.5C pathway, the report says.
…Read more: https://www.theguardian.com/environment/2021/apr/15/oil-firm-ceos-pay-is-an-incentive-to-resist-climate-action-study-finds
I don’t get why Jonathan Watts seems upset by the structure of oil company bonuses. Surely in this case greed is good. The Guardian regularly claims that renewables are cheaper than fossil fuel. If renewables really are an opportunity to boost profits, the most profit obsessed oil executives will be the first to jump ship and embrace renewables.