Exxon’s Rex Tillerson is my current CEO hero: unlike his peers, he refuses to appease the climate change alarmists who attack the Big Oil. While companies such as Shell and BP are working together on a “climate strategy” to prepare for the United Nations’ climate talks conclusion in Paris this December, Tillerson refuses to join them. When many shareholders at the Exxon annual meeting this week praised these competitors and urged Exxon to display a more aggressive stance on climate change, Tillerson had this to say: “No thank you, that would not be us. We’re not going to be disingenuous about it. We’re not going to fake it. We’re going to express a view that we have been very thoughtful about. We’re going to express solutions and policy ideas that we think have merit. Just speaking out to be speaking out about it doesn’t seem particularly helpful to me.”
While I don’t agree with Tillerson about supporting a carbon tax should a consensus about it (not clear among whom) emerge, this kind of sticking to principles when under attack is rare among business leaders. Following the popular “stakeholder” approach, many opt to appease any critic that claims to have a “stake” in a company, whether environmental NGOs or pension funds that have jumped on the climate change bandwagon. The Exxon CEO is a rare exception, with the courage to defend his company’s moral right to pursue its own interest: profitable production of fossil fuels.
It is a shame that so many corporate leaders do not stand up and defend their companies, because such moral defense is necessary for a company to survive and succeed in the long term. There are a few important facts that these corporate appeasers seem to forget. First, business is a moral endeavor: it produces the material values, the goods and services—including affordable energy in a useable form—that our lives depend on. Second, to be able to fulfill this important role, business firms (the people who operate them) must adhere to facts first hand and apply valid moral principles consistently and not follow their critics blindly.—Imagine companies stopping all oil production and us trying to flourish, yet alone to survive, only on the still unreliable, expensive albeit renewable wind and solar energy). The third fact the corporate appeases forget is the importance of freedom to the creation and trade of material values. That freedom of course means the pursuit of one’s own interest without violating the individual rights of others.
These facts, including the principles of rationality (adhering to facts), independence (versus second-handedness), and integrity (adhering to valid principles) are objective requirements of human survival. As Ayn Rand so eloquently explained, those who compromise valid principles—as the corporate appeasers do—are losers because they compromise on the requirements of survival and success, that of their own and of their companies:
“Contrary to the fanatical belief of its advocates, compromise [on basic principles] does not satisfy, but dissatisfies everybody; it does not lead to general fulfillment, but to general frustration; those who try to be all things to all men, end up by not being anything to anyone. And more: the partial victory of an unjust claim, encourages the claimant to try further; the partial defeat of a just claim, discourages and paralyzes the victim.”
The more you appease, the more you get attacked. The more you assert your moral right to pursue your interests, while not violating others’ individual rights, the more you discourage your critics—and the more you are able to achieve your values. Compare Shell’s and Exxon’s annual meetings for evidence. As per one report, Exxon’s meeting seemed “far less fractious” than that of Shell, despite the presence of environmentalist critics at both. The difference? Shell’s appeasement of their critics and Exxon’s unapologetic defense of its right to produce energy from fossil fuels.
As for the fact of changing climate: the climate is always changing, but man’s impact on it is negligible at best. The now refuted “hockey stick” climate model notwithstanding, climate scientists have not been able to establish a strong causal impact of human activity on global temperatures. To deal with adverse natural climate fluctuations, we need technology—and energy. I quote Tillerson again: “Mankind has this enormous capacity to deal with adversity. Those solutions will present themselves as the realities become clear,” he said. “I know that is a very unsatisfying answer for a lot of people, but it’s an answer that a scientist and an engineer would give you.”
We need more voices of reason and integrity defending business—and fewer appeasers of its irrational critics. Thank you, Rex Tillerson.