Winds of Change:: Corporate Strategy, Climate change and Oil Multinationals

European Management Journal Vol. 19, No. 5, pp. 501–509, 2001 2001 Elsevier Science Ltd. All rights reservedPergamon

0263-2373/01 $20.00PII: S0263-2373(01)00064-0

Winds of Change:Corporate Strategy,Climate Change and OilMultinationalsANS KOLK, University of AmsterdamDAVID LEVY, University of Massachusetts

Behind pessimistic expectations regarding thefuture of an international climate treaty, substantialchanges can be observed in company positions.Multinationals in the oil and car industries areincreasingly moving toward support for the KyotoProtocol, and take measures to address climatechange. This article analyses developments in theoil industry over the past few years, observing con-siderable shifts in corporate climate strategies. Itcompares British Petroleum, Royal Dutch Shell,Texaco and ExxonMobil, of which currently onlythe latter strongly opposes a climate treaty. BP andShell have moved decisively toward supportingemission reductions and investing in renewableenergy, while Texaco has begun to move in a simi-lar direction. Divergent behaviour can be explainedin terms of company-specific factors, particularlycorporate histories of profitability and location,market assessments, degrees of centralization andthe presence of climate scientists. Ongoing stake-holder pressures, which focus on ‘first-mover’ BP,are evaluated. 2001 Elsevier Science Ltd. Allrights reserved.

Keywords: Corporate strategy, Oil industry, Multi-nationals, Climate change, BP, ExxonMobil, Shell,Texaco, International policy

Climate change is an international environmentalissue that has provoked widespread controversy inthe industries that are most involved (Ikwue andSkea, 1994; Levy, 1997). Strong business oppositionhas contributed to the deadlock in the negotiations,with a US government that rejects particularly theEuropean efforts to proceed with the internationalapproach as agreed upon in Kyoto in 1997. The oil

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industry has been a critical player in the worldwideefforts to address greenhouse gas emissions (e.g.Anon, 1999). The combustion of oil-based fuels fortransportation, electricity generation and heatingaccounts for more than half of greenhouse gas emis-sions in industrialized countries. At the same time,oil multinationals control substantial technological,financial and organizational resources which, ifapplied appropriately, could play a major role inreducing these emissions and in implementing inter-national policies. From a business perspective, com-panies can try to seize possible economic opport-unities arising from the climate issue by reducingrisks and costs, anticipating regulation, developinggreen capabilities through new products or markets,and strategic behaviour vis-a-vis competitors (Kolk,2000; Reinhardt, 2000a; Rugman and Verbeke, 2000).

With increasing regulatory and public pressure, theclimate strategies of most oil companies have startedto change. However, as Table 1 shows, the timing,pace and types of responses have varied enormously.BP, followed by Shell a few months later in 1997,were the first to adopt a more open stance towardclimate science and the Kyoto protocol, and havejoined industry associations and partnerships withenvironmental non-governmental organizations(NGOs) that reflect these perspectives. They haveinvested resources in low-emission and renewableenergy sources. Located at the other end of the spec-trum is ExxonMobil, which maintains a strong lobby-ing stance against mandatory reductions of green-house gases, arguing that these measures are notjustified by the science and are prohibitively expens-ive. It has not joined its counterparts in investing inrenewables. In between these extremes is found Tex-

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Table 1 Overview of Oil Companies’ Climate Positions

Topic BP ExxonMobil Shell Texaco

Public recognition of the May 1997 NA September 1997 February 2000climate problemCurrent view on climate Precautionary principle Uncertain; Precautionary principle Need to move beyondscience precautionary principle ‘protracted debate on

precludes science science’View on Kyoto protocol Is supported Labelled as ineffective Considered to have real Will not responsibly

policy commitments fulfil its objectivesMembership of Global Left in 1996 Stayed until the end Left in April 1998 Left in February 2000Climate CoalitionType of climate measures Measurement and No climate measures; Measurement and Measurement of

external monitoring of points at emission external monitoring of emissions; renewableemissions; renewable reductions in refineries, emissions; renewable investments, especiallyinvestments, especially and research expenses investments in solar, hydrogensolar and hydrogen wind, biomass and

hydrogen

aco, which changed sides much later, in February2000.

How can the divergence of these responses withinone and the same industry be explained? As theindustry environment is similar for all companies,the different strategies originate from company-spe-cific factors, particularly corporate histories oflocation and profitability, market assessments,degrees of centralization and the presence of climatescientists. In this article, these factors will be exam-ined consecutively to understand variations in thetiming, pace and types of climate strategies asadopted by BP, ExxonMobil, Shell and Texaco.Although observers, especially before Texaco’s shift,have been tempted to trace differences back toregional and country origins, our analysis shows that

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this is just one factor informing company behaviour.Company strategies can only be explained from acombination of distinct traditions, backgrounds andidiosyncracies, which will be analysed in this articlefollowing the elements summarized in Table 2. Thedetailed comparative case studies, and the rich setof data derived from interviews and the analysis ofprimary and secondary material, provides insightsinto the different factors that have played a role inthe strategic changes on the issue of climate change.

Location and the Timing of Change

Location-specific factors are to some extent internal-ized by companies, even if they are large multina-

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Table 2 Important Explanatory Factors forCorporate Positions on Climate Change

Factors Components

Locational factors Societal concerns aboutclimate change in homecountrySocietal perceptions aboutscientific uncertaintiesSocietal views on thebehaviour of oil companiesRegulatory culture (litigationalor consensus-oriented)National policies on climatechange

Economic and market Company financial andposition economic situation

Competitive, marketpositioningRole of long-term scenarioplanningHistory of involvement withrenewables

Internal organizational Degree offactors (de)centralization

Position of CEOAvailability and type ofinternal climate expertiseType of decision-makingprocessCorporate culture

tionals that operate worldwide. Public opinion andregulatory policies in the country of origin, which ishome to their corporate staff and many of theiremployees, and accounts for considerable shares ofsales and assets, influences the way in which compa-nies approach environmental issues. It has beenhypothesized that the trans-Atlantic divide might bean important factor for explaining corporate pos-itions on climate change (Rowlands, 2000). As exam-ined in more detail below, a US –European compari-son shows differences in the overall socio-culturaland political contexts, especially related to the timingof societal concerns for climate change, corporatereactions and interactions with stakeholders, includ-ing policymakers. The implications for the changesin the oil industry are not unequivocal, however, forseveral reasons.

As the climate issue matured in public opinion andpolicy circles, international communication andexchange of views increased, leading to a gradualdecline of the initial differences between the regions.Companies also started to take positions that devi-ated from what would be expected on the basis oftheir nationality; Texaco is a case in point. Especiallyin the oil industry, global in nature with a small num-ber of large multinational players closely watchingeach other, the salience of the US – European divid-ing line seems to be declining. Socio-cultural and


political developments are nevertheless important toconsider as (historical) background for understand-ing company strategies.

Socio-Cultural Factors

In the US, climate change became a cause for societalconcern at an earlier stage than in Europe. Coincidingwith a warm summer, global warming received con-siderable media and Congressional attention in 1988and alarmed US industry. The Global ClimateCoalition (GCC) was formed in 1989 to representmajor fossil fuel users and producers, and lobby Con-gress to prevent regulatory measures. Contentiouspolicy battles have been waged on the basis ofdetailed technical studies, focusing on the scientific(un)reliability of the evidence on global warming. USindustry associations and oil companies have chal-lenged the legitimacy of the Intergovernmental Panelon Climate Change (IPCC), created in 1988 to investi-gate this matter. As the most outspoken oil company,ExxonMobil has emphasized the absence of a prooffor climate change from the very beginning. Only inthe past year, after its withdrawal from the GCC in2000, did Texaco publicly announce its wish ‘to movebeyond protracted debate about the adequacy ofthe science’.1

Compared to the US, European public concern aboutclimate change emerged more slowly with the prep-arations for the 1992 United Nations Conference onEnvironment and Development. Industry did notform an issue-specific association, although it alsowarned for harm to competitiveness. Since the mid-1990s, societal awareness of the problem, its causesand the potential implications has increased. Thepolitical debate has focused less on the nature of thescientific evidence and on technical details, and moreon finding consensus for ways to deal with the issue.Challenging the science and the IPCC without a will-ingness to cooperate and work on alternatives is notconsidered socially acceptable, and jeopardizes exist-ing corporate channels of influence. Companies suchas BP and Shell have withdrawn from the GCC andare active in more cooperative associations such asthe World Business Council for Sustainable Develop-ment, and in emission trading initiatives. Contraryto ‘big elephant’ ExxonMobil, which has a powerfulnegotiation position in the US regardless of its fer-ocious rejection of measures, Shell and BP have thusfelt pressure from their stakeholders, includingemployees, for a constructive approach to securecredibility, legitimacy, obtain reliability and a seat atthe table.

The stance of companies also originates from societalworries concerning the broader environmentalimpact of oil exploration, production and transport.These also started earlier in the US than in Europe,driven by the Exxon Valdez oil spill in 1989. As a

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result, US oil companies started to report on theirenvironmental behaviour. Both Exxon and Texacopublished environmental reports already over 1990,while the two European companies followed a fewyears later (BP in 1995, Shell in 1997). The impact ofoil companies has become contentious in Europeparticularly since the mid-1990s following the Niger-ian and Brent Spar controversies, and recent oil spillsin the Atlantic Ocean. Shell has taken strong meas-ures to be responsive to social and environmentalconcerns, since a lack of social legitimacy is seen asa fundamental threat to the company. Following theBrent Spar incident, consumer boycotts wereorganized in European countries, and sales dropped,particularly in Germany. Whereas Shell’s previousscenarios did not reckon with broad societal aware-ness, they currently envisage substantial publicpressure about globalization and the environment,which translates into political pressure. BP’s CEOBrowne made a strong public statement about cli-mate change in 1997 in an attempt to acquire agreen(er) profile. Its new global brand and the adver-tising campaign that accompanied its introductionrefer to this image even more explicitly.

Generally speaking, Shell and BP have a more coop-erative approach towards NGOs than ExxonMobil.They tend to consult NGOs on various issues in orderto be kept informed about societal perceptions. Thiscannot be explained, however, from overall socio-cul-tural differences between the regions, as many USmultinationals have partnerships with domesticenvironmental and social NGOs (Rondinelli andBerry, 2000; Van Tulder and Kolk, 2001).

The Regulatory Context

In the EU, discussions to implement climate policiesin order to stabilize emissions started in the early1990s. Although the overall target, and the underly-ing precautionary principle, was supported, attemptsto adopt an energy tax faltered as a result of strongopposition by industry and some member states(Ikwue and Skea, 1994). Support came from countriesin Northwestern Europe, including The Netherlands,whereas the UK rejected the proposal mainly becauseit was seen as European interference in domestic tax-ation matters (with the closure of the coal mines asa secondary factor, Maddison and Pearce, 1995). Dueto the 1997 Kyoto conference, the late 1990s wit-nessed the resurfacing of the threat of some kind ofregulatory intervention to address climate change. Inline with societal appreciation for constructiveapproaches, many European companies, includingBP and Shell, have been active in such discussions,also as a way to pre-empt stricter or undesirableforms of regulation. In, respectively, the UK and TheNetherlands, BP and Shell have played a role in thevoluntary initiatives, particularly emission trading,that were proposed to counter regulation.

In the UK, business came up with proposals on how


to reduce emissions after Kyoto, especially throughvoluntary agreements and market mechanisms. Afterthe Labour government announced its plans to intro-duce an energy tax in early 1999, broad-based indus-try associations opposed this proposal, warningabout harm to business competitiveness. At the sametime, however, large companies also very soonstarted to cooperate on a greenhouse-gas trading sys-tem. The tax initiative was subsequently scaled backand postponed, with industry continuing to opposethe levy. In The Netherlands, business had alreadyoffered before the Kyoto conference to participate inan international benchmarking of energy efficiency.As a quid pro quo, the government refrained fromimposing specific emissions measures targeted at theindustry. In early 1999, parties agreed on a covenantin which Dutch companies committed themselves tothe objective of becoming the world’s most energyefficient firms as soon as possible. If they have to takesubstantial measures to arrive there, these should berealized in 2012 at the latest.

In the US, the political and regulatory situation hasbeen quite different with regard to climate change.Only in 1989 did the (first) Bush administration sug-gest the importance of a ‘no-regrets’ approachtowards climate change (Bryner, 2001). Within oneyear, however, this changed into an emphasis onmore research and opposition to an internationalagreement and binding commitments. The sub-sequent Clinton administrations participated in theinternational negotiations, but faced a hostile Con-gress at home. As a result, there was no opportunityto translate this tentative support for internationalsteps into Kyoto ratification or into concrete meas-ures other than calls for voluntary steps by compa-nies. The debate has continued to focus on thereliability of the science, damage to the US economyand the lack of participation by the developing coun-tries. The current Bush administration has given anew impetus to this rejectionist approach. The pos-ition taken by companies such as ExxonMobilmatches with the political context, and there is conse-quently not much domestic pressure to be morecooperative.

Although participatory and pre-emptive approachesthus fit much more into the European tradition, thisneither means that European countries take identicalmeasures nor that similar approaches are impossiblein the US. The voluntary, pre-emptive initiative takenby the US chemical industry (Responsible Care) andsulfur emission trading schemes are cases in point.In the present political context, however, EU pol-icymakers are moving in the direction of an energytax as a result of increasing support by the memberstates, whereas the US administration and Congressare taking an even more oppositional stance on cli-mate. Although this gives companies such as Exxon-Mobil ample opportunity to continue their oppo-sition to climate measures, there is as much room forother companies (Texaco) to support them. This also

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means that other factors than location alone areimportant to explain and understand corporate stra-tegies. In the case of climate change, this involvedparticularly the economic situation and market pos-itioning, and internal organizational and idiosyn-cratic factors.

Economic and Market Position

The economic situation of the oil multinationals haslargely reflected the turbulence of the industry as awhole. In the past few decades, the industry has exhi-bited waves of diversification in the mid-1970s,divestments and focus strategies one decade later,and large-scale mergers and acquisitions in the late1990s (Ernst and Steinbuhl, 1999; Grant and Cibin,1996; Stonham, 2000). In this restructuring race,Exxon was the most aggressive and successful inimplementing the lean model of cost reductions,efficiency and shareholder value, leading to highreturns on capital employed. In the period between1990 and 1999, Exxon had an average return on capi-tal of 12.7 per cent, compared to 9.4 per cent for bothBP and Shell (Durgin and Corzine, 2000). For the twoEuropean companies, return rates were particularlylow in the early 1990s, and they were forced torestructure drastically (Halberstadt, 1998; Stonham,2000). As a considerably smaller player than the oilmajors, Texaco has operated in a relatively low mar-gin business, suffering difficulties particularly whenoil prices are low (Ernst and Steinbuhl, 1999).

The difficult situation for BP, Shell and Texaco islikely to have contributed to the different marketorientation that they have started to adopt. With highreturns on capital, Exxon did not experience anyneed to change its strategy of focusing on two largegrowth markets: supplying oil for transportation andgas for power markets. Instead, ExxonMobil’s CEORaymond very recently proclaimed that ‘we areindustry leaders in all aspects of our operations’(Corzine, 2000), having ‘established a new definitionfor world class scale and efficiency in our industry’(Corzine, 2000; Durgin and Corzine, 2000). The com-pany is strongly focused on running very tight fin-ancial controls, can remain profitable even with verylow oil prices, and thus feels therefore less pressureto invest in alternative technologies. Alternativeenergy has been under review for three decades. Thishas led to the conclusion that renewables are onlyniche markets, in which the company will not investas long as substantial profits cannot be expected, andthat, as CEO Raymond stated, it ‘made better sensefor us to concentrate on our core energy and petro-chemical business’.2 In view of Exxon’s expertise inextracting from older oil fields, the company is moreconfident about its possibilities of continued explo-ration.

In contrast to ExxonMobil, the other three companies


currently characterize themselves more broadly asenergy companies. There are differences in focus andtiming, however. BP and particularly Shell have abroader approach than Texaco, and started the pro-cess a few years earlier. In the past year, Texacostarted this transition as part of a movement awayfrom its traditional reliance on bulk. In consideringalternative energy technologies, Texaco has there isno clear idea of what the ‘winners’ will be; geother-mal technologies receive particular attention in viewof their good fit with existing core competencies ingeology and drilling, and spending on cleaner, syn-thetic natural gas has increased in 2000.

BP’s broader focus started with its renewed invest-ments in solar in 1996, which have expanded since,particularly through the creation of BP Solarex. Thisnew company merged BP’s solar division from the1980s (BP Solar) with Solarex, acquired from Enronin 1999. The emphasis on BP’s distinct energy profilebecame most explicit with the launch of its new glo-bal brand, the Helias trademark and the slogan ‘BP –Beyond Petroleum’ in July 2000. Although BP con-siders all options for alternative energy, it hasinvested primarily in solar. CEO Browne made verypositive assessments about renewables in 1998,expecting shares of 5 per cent by 2020, and 50 percent by 2060 (Corzine and Marsh, 1998).

Shell can be characterized as the broadest energycompany in view of its investments in oil, gas andpower, and renewables. From 1997 onwards, it hasinvested in power generation, and more recently alsoin the trade and distribution of power (Otten, 2000;Veeger, 2000), and in solar and biomass, of which thecompany had retained some activities from the 1970s.Shell’s policy, traditionally based on long-term scen-arios, currently points to a considerable role forrenewable energy, projected to rise to 30–40 per centby 2060. The exact division among the varioussources is difficult to predict, but in its activities Shellbets on biomass, solar, wind and perhaps geothermalenergy. In renewables, the company invests in linewith existing businesses where possible, using avail-able expertise and experience. Examples include off-shore wind activities and geothermal’s synergieswith exploration and production.

Internal Organizational Factors

As part of the restructuring wave in the 1980s, oilcompanies streamlined their organizations, reducingthe number of management layers and divisions(Grant and Cibin, 1996). They changed their struc-tures from geographical to product-based divisions,usually upstream, downstream and chemicals. Com-pany-specific differences remained, however, withsome combining both types, in which a geographicalstructure applied to some parts of the organization.Examples include Texaco and Exxon. In the late

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1980s, both companies underwent a process of sub-stantial downsizing and decentralization.

Shell did not follow this wave as it had traditionallybeen very decentralized, having grown organicallyfrom two separate national bases. In view of this his-tory, Shell has generally preferred to rely on jointventures and alliances, and on building new com-petencies itself, rather than through mergers andacquisitions. This emphasis on internal growthexplains the company’s early investments in renew-ables. Exxon, by contrast, can wait and acquire com-petencies later through acquisition. Compared to theother oil companies, Shell also differs in its top man-agement model: a committee of managing directorsheaded by a chairman instead of a CEO, with pos-ition changes every five years.

Except for Exxon, the other companies (again)restructured in the 1990s: BP after 1992, Shell after1994, and Texaco after 1996. This coincided with thearrival of new top managers, respectively Browne,Herkstroter and Bijur. In all cases, product-basedbusiness groups or divisions were created in order toimprove efficiency and market-responsiveness. Thereorganizations created a climate of change withinthe three companies, with a strong impact of the newleaders, albeit in different ways. Shell’s chairmanstarted the company’s transition from a closed to amore open culture following the serious large contro-versies surrounding the company’s Nigerian invest-ments and the proposed sinking of the Brent Spar oilplatform. This also included efforts to bring Shell Oilmore into line with corporate policies; the oppositionof this ‘independent fiefdom’ to withdrawal from theGlobal Climate Coalition obstructed Shell’s corporateposition change on the climate issue for some time(Corzine and Durgin, 1999; Shell, 1998). Individualfactors played a role in all three companies’ stanceson climate change.

Although the climate issue had been around since thelate 1980s, the preparations for the Kyoto meeting,the conference itself in December 1997, and the widesupport for the protocol by so many countries, weremost influential. Browne’s speech in May 1997, andthe extensive and positive publicity that BP receivedfrom it, had an impact on other companies. Climatechange increasingly became a topic for discussion atinternational business meetings such as the WorldEconomic Forum in early 1998. At this Davos meet-ing, John Browne mentioned that he had been ‘struckby the openness of the debate among senior peoplein the industry and in particular by the strong sup-port for action expressed by Cor Herkstroter, thehead of Shell, and Peter Bijur, the head of Texaco’.3

Especially for Texaco’s CEO, the Davos meeting sig-nalled the moment when his thinking about the cli-mate issue began to change. Climate was identifiedas a major strategic issue, and the company startedwith the collection of emission data, after having


looked at the approaches taken earlier by BP andShell. It took some more time, however, before thisresulted in an overall public policy change, the with-drawal from the GCC, and the appointment of newstaff with a clear environmental mandate. In 2000,Texaco also became a member of the World BusinessCouncil for Sustainable Development and, togetherwith companies such as BP and Shell, signed a set ofvoluntary principles on security and human rightsdrawn up by the UK and US governments.

Unlike the other three companies, Exxon has hadinternal climate expertise since the early 1980s; aninformal climate team and network was created bythe mid-1980s. It employs a climate scientist who haspublished in the academic literature, has become a‘skeptic’ and is a key figure in developing Exxon’sstrategy. The company prides itself on providing oneconsistent message concerning climate change, bothinternally and to the world. Other companies are per-ceived as pandering to public opinion without funda-mentally changing strategies, at least as far as theiroil and gas businesses are concerned.

BP, Shell and Texaco do not have internal technical,scientific knowledge, but rely instead on outsideexperts, who are sometimes brought in as speakers.The companies are therefore exposed to a wide rangeof opinion on the climate issue, and run less risk ofinstitutionalizing a particular viewpoint. Buildinginternal expertise is not deemed necessary or seen asuseful, inter alia because oil industry scientists wouldnot be considered as very reliable sources of infor-mation by outsiders. These three companies do haveinternal networks and climate teams, but these werecreated more than a decade later than Exxon’s. Inaddition, they seem to be looser and more inter-nationally-oriented; ExxonMobil has a highly cen-tralized strategy-making process concerning climatechange, with little room for local discretion or dis-sent. In spite of its multinationality, perspectivesfrom elsewhere do not easily permeate into the delib-erations of top management. Similarly, Mobil’sslightly less confrontational style and different, morediplomatic leadership style, does not seem to havehad much influence on ExxonMobil’s corporate pos-ition. Exxon’s tradition, structure and strategy-mak-ing process seems to have made it more prone toinsular thinking than a decentralized company suchas Shell. Decentralization helps to bring in moreinternational perspectives, offering opportunities formore open decision-making and corporate change. Inaddition, Shell’s scenario-based planning deliberatelysets out to contemplate radical environmentalchanges and pressures, and to challenge conventionalthinking at the senior management level.

Evaluating Drivers and Pressures

In conclusion, developments in oil companies’ cli-mate policies can only be explained from a set of

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company-specific factors consisting of three compo-nents: locational, internal organizational, and econ-omic situation and market position (see Table 2).After BP openly acknowledged the problem of cli-mate change and announced measures, a dynamichas unfolded in the industry, accompanied by inten-sive stakeholder interaction. This section evaluatesthese pressures and the developments related to thecompanies’ climate policies.

As the ‘first mover’ on the issue, BP has attractedmost attention, receiving much support but alsobecoming the subject of public scrutiny. The com-pany’s decision for an active climate policy built onalready existing environmental and safety activitieswithin both BP and Amoco; it was stimulated by inci-dents such as the 1989 Exxon Valdez oil spill and theBrent Spar, but driven initially by internal consider-ations (Reinhardt, 2000b). The idea that leadershipand responsibility would make good business senseand motivate BP staff also originated from internaldoubts stemming from the Brent Spar controversythat debates in the public arena could be won on thebasis of science alone.

BP’s new position had a large impact on other com-panies, especially in the oil industry. Besidesinducing companies such as Shell and Texaco to takesimilar steps and avoid not lagging behind, others inthe industry reacted negatively to BP’s breakingranks with the industry (Reinhardt, 2000b). Inaddition, by recognizing the problem, demonstratingaccountability and professing openness (Browne,2001), BP has made itself highly vulnerable to criti-cisms, attracting even more attention from environ-mentalists than other oil companies (Bahree, 2001).In their campaigns, NGOs have focused on the basicunsustainability of the oil industry, the negligibleamounts spent on solar energy compared to otherexpenses, and BP’s continued investment plans in oil,especially in Alaska and Tibet. In July 1999, the USTransnational Resource and Action Center gave BPthe special Greenhouse Greenwash Award for its‘Plug in the Sun’ solar programme. It asserted thatthe selection had been difficult with industry com-petitors Chevron (‘People do’ advertising campaign),Exxon (‘Save the Tiger Fund’), Mobil (claims for rec-ognition of environmental considerations in Peruvianoil field exploration) and Shell (its ‘Profits or Prin-ciples’ philosophy).4

The new BP logo and the ‘Beyond Petroleum’ cam-paign, launched in July 2000, was ridiculed withinthe industry and by NGOs. It inspired CorporateWatch ‘to think about more appropriate phrases forthe company’s re-branding: British Petroleum: BeyondPompous, Beyond Protest, Beyond Pretension, BeyondPreposterous, Beyond Platitudes, Beyond Posturing,Beyond Presumptuous, Beyond Propaganda… BeyondBelief ’ (Bruno, 2000, emphasis in original). Internally,the slogan led to confusion and dissatisfaction,because it threatened to hamper the company’s core


activities and business units’ daily operations(Banerjee and Kapner, 2001). At the 2001 annualmeeting, management retracted the original messageby emphasizing that it was not meant to show thecompany’s intention to retreat from oil. As Brownepointed out ‘Beyond Petroleum just means that weare giving up the old mindset, the old thinking thatoil companies had to be dirty, secretive and arrogant’(Buchan, 2001). Departing from previous positiveexpectations about the size of future markets forrenewables, the CEO currently also seems to havebecome considerably less optimistic, and has statedrecently that renewables could not even begin to sub-stitute for oil on present conditions (Warner, 2001).

With regard to Shell, NGOs have particularly critic-ized its activities in Nigeria and with the Brent Spar.Although the Nigerian situation continues to pro-voke controversy, for example through the oil spillsand victims’ lawsuit against the company in the US,the follow-up to the Brent Spar has represented anew direction. The improvement of Shell’s image hasbeen helped by Greenpeace’s admission of errors onthe technical details, and by the publication of a ser-ies of externally audited Shell reports on its social,environmental and economic performance, andwhich discuss its main dilemmas. Shell has repeat-edly emphasized that the investments in renewablesare not public relations stunts, but involve long-termbusiness decisions. This also means that they need tobecome profitable within five years.

ExxonMobil continues to be the focus of NGO criti-cisms for its climate change policy, which is seen asa major force behind the position currently taken bythe Bush administration. Calls for boycotts of themajor oil companies, particularly ExxonMobil (andEsso in the UK), haves been made by representativesfrom green political parties in April 2001. While thecompany has felt the need to defend itself, this hasmerely included a repetition and explanation of itsargumentation. In April 2001, Greenpeace threatenedcampaigns against five US oil companies(ExxonMobil, Chevron, Texaco, Conoco and Phillips),because they are seen as the main Bush supporters.Remarkably, this includes Texaco, which has adopteda different position on climate change, but not BP,which ranks high on the list of top contributors tothe Bush campaign. In the list of donations by the oiland gas industry to Bush, BP(Amoco) ranks third,after Enron and ExxonMobil, and just before Chev-ron.5

In spite of some public pressure, however, climatechange continues to be a very controversial issue forExxonMobil. As a relatively more centralized com-pany, the CEO and corporate headquarters haveplayed an important role in adhering to the originalstrategy. Idiosyncracies also seem to be salient, parti-cularly Exxon’s traditional emphasis on science, thefact that a well-known climate skeptic has headed theclimate team since 1980, and that the company is

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proud of having provided a clear, consistent messageon the issue. It is interesting to compare ExxonMob-il’s climate policy to its initiatives regarding fuel-celltechnologies, where considerable investments havetaken place. In the first few months of 2001, the com-pany announced the development of a fuel-cellvehicle together with GM and Toyota, and joined theCalifornia Fuel Cell Partnership, in which the otheroil companies BP, Shell and Texaco were already par-ticipating. These developments might mean that afuture position reversal on climate change is notunthinkable, although unlikely in the present USpolitical context.

Notes

1. Letter to GCC’s executive director Glenn Kelly by JamesMetzger, Texaco’s vice-president and chief technologyofficer, 25 February 2000.

2. Quoted in ‘21st century oil: big oil faces uncertain future’,Dow Jones Newswires, 28 February 2000. Interviewees atExxon headquarters confirmed this outspoken corporateposition.

3. ‘Texaco, Shell chiefs also seek climate action’, Reuters, 6February 1998.

4. http://www.corpwatch.org/greenwash/bp.html, websitelast accessed 28 April 2001.

5. ExxonMobil donated $1.2 million to Bush, BP Amoco $0.9million, Chevron $0.78 million, and Texaco $0.35 million(calculated from the Center for Responsive Politics,http://www.opensecrets.org, website last accessed 28April 2001).

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WINDS OF CHANGE

ANS KOLK, University of DAVID LEVY, UniversityAmsterdam, Department of of Massachusetts, Depart-Accountancy and Infor- ment of Management, Bos-mation Management, Fac- ton, MA 02125, USA.ulty of Economics andEconometrics, Roetersstraat David L. Levy is Associate11, 1018 WB Amsterdam, Professor at the UniversityThe Netherlands. E-mail: of Massachusetts, [email protected] His interests centre on the

intersection of business stra-Dr Ans Kolk is Associate tegies and internationalProfessor of Sustainable environmental governance.

Management at the University of Amsterdam. Her His extensive consultancy includes advisor to the Mas-research and publications are in environmental man- sachusetts Climate Change Action Plan and the STEPagement and corporate social responsibility, parti- program at U-Mass, Boston, to support growingcularly in relation to multinational corporations’ stra- environmental technology companies.tegies, and international environmental policy. Herlatest book is Economics of Environmental Manage-ment (Financial Times – Prentice Hall, 2000).


Winds of Change:: Corporate Strategy, Climate change and Oil Multinationals

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