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USA: Exxon CEO Draws Anger Over Climate Change

by Thaddeus HerrickWall Street Journal
August 29th, 2001

Like his predecessors, Exxon Mobil Corp. Chairman and Chief Executive Lee Raymond keeps a relatively low profile. He's reluctant to grant interviews and make public appearances. But ever since he assailed the Kyoto initiative to combat global warming in a speech a few years ago, Mr. Raymond has been inextricably linked to the issue.

Add to that his disdain for gay rights and his unflinching responses to critics of Exxon Mobil's business in repressive regimes, and Mr. Raymond comes off as a strikingly politically incorrect character for a modern-day, big-company CEO.

Mr. Raymond's stances have made for a rocky summer for Exxon Mobil. In July, ahead of a meeting of government officials in Bonn, Germany, to discuss rules for implementing the Kyoto pledge to cut greenhouse-gas emissions, activists staged dozens of demonstrations around the world to protest the company's stance on climate change. Some European Parliament members have joined an effort by environmentalists to boycott Exxon Mobil, and a "Stop Esso" effort in Britain (as the company brands its products there) has won the backing of celebrities such as Ralph Fiennes and Annie Lennox and companies including The Body Shop.

Others calling for a boycott against Exxon Mobil include the Human Rights Campaign, the largest gay-rights organization in the U.S. The group cites the oil behemoth's refusal to add sexual orientation to its nondiscrimination policy and its decision to drop Mobil Corp.'s domestic-partner benefits program for people hired after the two companies merged in 1999.

Exxon Mobil also faces a lawsuit, filed in late June in federal court in Washington, D.C., by a labor advocacy group that alleges the company supported the military in Indonesia when it tortured and killed locals near the company's operations in the Aceh province. Exxon Mobil has denied that the company or its affiliates were involved in the alleged abuses by Indonesian security forces. "Exxon Mobil condemns the violation of human rights in any form," the company said in a statement at the time.

Still, critics of the Irving, Texas company abound.

"Lee Raymond simply doesn't care," charges Simon Billenness, senior research analyst at Trillium Asset Management, a Boston investment firm that bills itself as socially responsible.

Mr. Raymond declined to be interviewed. But executives at Exxon Mobil say the 63-year-old chairman, who has held the post since 1993 and is known for his top-down management style, sometimes pays a price for telling it like he sees it. "Honesty and directness are virtues," says Ken Cohen, Exxon Mobil's vice president of public affairs. "But they can also lead to scrutiny and attack."

Mr. Raymond's peers, meanwhile, have taken a different approach. Last December, five oil companies joined with human-rights groups and agreed to examine any allegations of human-rights abuses in overseas operations and to push for investigations. Exxon Mobil's European rivals BP PLC and Royal Dutch/Shell Group have lent considerable support to the global-warming principles adopted in Kyoto, Japan, in 1997.

Exxon Mobil officials say Mr. Raymond's comments reflect the company's views and not necessarily his own. But whatever he believes personally, Mr. Raymond has been one of the most outspoken executives in the nation against regulation to curtail global warming. Speaking out against the Kyoto initiatives in a 1997 speech in China, he said that costly regulations and restrictions are a bad idea, especially when "their need has yet to be proven, their total impact undefined, and when nations are not prepared to act in concert." He also questioned the science behind global warming and said the greenhouse effect comes in part from natural sources.

Mr. Raymond has since toned down his position, saying global-warming issues need to be addressed; he called for voluntary, rather than regulatory, action, technological solutions and more research. But he also reiterated that he believes the Kyoto pact is "unworkable, unfair and ineffective."

Exxon Mobil officials now say Mr. Raymond's statements on global warming have been largely misunderstood. While the company still believes the science is fuzzy, "uncertainty is no reason for inaction," says Frank Sprow, Exxon Mobil's vice president for safety, health and the environment.

At the press briefing after the company's annual meeting in May, Mr. Raymond said that as an executive, "you're always concerned" about boycotts. But his actions at the meeting seemed to belie that concern.

As shareholders spoke for more than two hours, he often belittled those who opposed his positions. When one of the few who shared Mr. Raymond's views spoke, the chairman allowed him to digress from the topic at hand. That evoked a protest from Shelley Alpern, a sponsor of a shareholder resolution to prohibit discrimination based on sexual orientation.

"I thought our comments were supposed to be linked to the proposal," Ms. Alpern said. True, said Mr. Raymond, adding, "I assure you if you tried to do that, I would enforce the rules."

And he did, most dramatically when activist Radhi Darmansyah, speaking in halting English, was halfway through an appeal for a halt to the violence in Aceh. "They are murdering my brothers and sisters," said Mr. Darmansyah.

Mr. Raymond stopped him precisely after his two minutes were up, saying "you can come back another time." Mr. Darmansyah's microphone was switched off and security guards moved closer to be sure he returned to his seat.





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