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In 2019, 350.org co-founder Bill McKibben wrote in the pages of the New Yorker: “I suspect that the key to disrupting the flow of carbon into the atmosphere may lie in disrupting the flow of money to coal and oil and gas.”
McKibben’s words came on the heels of years of growing action by the global climate movement against the financiers of the fossil fuel industry – the banks, asset managers, and insurers that prop up oil, gas, and coal companies. During the Standing Rock Sioux Tribe’s fight against the Dakota Access Pipeline, for example, many highlighted the role that big banks played in providing the credit agreements that undergirded the pipeline project’s viability.
Now, a new campaign called Stop the Money Pipeline is bringing a greater focus to this connection between Big Oil and finance. “Banks, insurance companies, and asset managers are funding, insuring and investing in the climate crisis,” says the campaign website. “Stopping this money pipeline is one of the most important ways we can address the climate emergency.”
Stop the Money Pipeline has a common set of targets: JPMorgan Chase, the world’s top banker of fossil fuels; BlackRock, the world’s top investor in fossil fuels; and Liberty Mutual, a major insurer of the fossil fuel industry.
A new development further illustrates the extent of the fossil-finance nexus that Stop the Money Pipeline is going after.
On November 29, 2019, ExxonMobil announced that Joseph “Jay” Hooley was joining its board of directors, effective January 1, 2020. Hooley is the former CEO and chairman of State Street Corporation. He sits on the board of directors of Liberty Mutual, which, in the face of activist pressure, has started to make gestures around climate concerns.
Hooley joined ExxonMobil’s board just one day after stepping down as State Street’s non-executive chairman. Since his appointment was announced a month earlier, Hooley was, for a time, simultaneously the chairman of State Street, a director of Liberty Mutual, and a future director of Exxon.
ExxonMobil, of course, is one of the world’s largest oil producers. State Street Corporation is the world’s third largest asset manager. Liberty Mutual is an insurance industry giant – and one of the targets of the Stop the Money Pipeline campaign.
As Liberty Mutual comes under increasing pressure to help address our growing climate emergency, the decision of Hooley to join ExxonMobil’s board raises significant concerns. Simply put: will Hooley be able to direct Liberty Mutual towards climate responsibility while he is simultaneously directing – and personally profiting from – ExxonMobil, one of the biggest drivers of our global climate crisis?
Moreover, are Liberty Mutual’s gestures toward climate action compromised by retaining a director who is also directing a company whose core business is centered on producing and burning fossil fuels?
Hooley’s joining both ExxonMobil’s and Liberty Mutual’s boards also raises concerns over conflicts of interests. Is Liberty Mutual insuring fossil fuel projects that ExxonMobil profits from, now or in the future?
Hooley & ExxonMobil
In joining the board of ExxonMobil, Hooley assumes a leadership role in a global fossil fuel behemoth.
According to Offshore Technology, ExxonMobil is the 6th biggest oil producer in the world, and the top U.S.-based global oil producer. S&P Global Platts ranks it the second top energy company in the world.
ExxonMobil recently announced that it plans to increase its oil production in the Permian Basin, the most productive oilfield in the world, up to 1 million barrels per day by 2024 – a nearly 80% increase from its current production.
The exact compensation in cash and stock awards that Hooley will receive as an ExxonMobil director is yet unknown. However, according to ExxonMobil’s most recent proxy statement, in 2019 its ten directors averaged $366,488 in compensation, with five directors receiving $321,361, three directors receiving $331,361, one director receiving $256,826, and one director receiving $807,167.
As of February 26, 2020, ExxonMobil had 11 board members.
Hooley, Liberty Mutual & State Street
Hooley joined the board of Liberty Mutual Insurance in April 2019. This was around three months after he stepped down as State Street CEO, and about eight months before he stepped down as State Street’s non-executive chairman and joined ExxonMobil’s board.
Liberty Mutual insures fossil fuel infrastructure projects that, without this insurance, would otherwise be halted. While many fossil fuel clients of Liberty Mutual are unknown, we do know that it insures the controversial Trans Mountain pipeline and Mariner East pipeline.
Liberty Mutual is also an investor in fossil fuel companies, including in TC Energy, which is building the Keystone XL pipeline, which will transport some of the dirtiest oil in the world from Canada to the U.S. TC Energy is also building the Coastal GasLink pipeline, which has sparked a wave of indigenous resistance that ground Canada’s rail system to a halt over the plan to ship gas through unceded Wet’suwet’en territory.
While Hooley earns hundreds of thousands of dollars a year as an ExxonMobil director, he will also be raking in big money as a Liberty Mutual director. Hooley’s compensation form Liberty Mutual is yet unknown, but directors from 2016 to 2018 received yearly compensation ranging from $270,030 to $362,030.
Hooley served as CEO of State Street Corporation from March 2010 to the end of 2018, as well as State Street’s chairman from 2011 to 2019. He made $141 million over 9 years as State Street CEO, though he has come under criticism for poor performance.
State Street is the third largest asset manager in the world after BlackRock and Vanguard. An October 2019 Guardian report revealed that State Street owns $38.3 billion in shares in oil, coal and gas companies. It is a top shareholder of some of the biggest oil companies in the U.S., including ExxonMobil, Chevron, Phillips 66, ConocoPhillips, and Valero Energy.
Will Hooley’s Exxon conflict impact progress on climate concerns?
Under growing activist pressure, big asset managers like BlackRock and State Street and big insurers like Liberty Mutual have started to acknowledge the bigger role they need to play in combating our climate crisis.
BlackRock CEO Larry Fink and State Street CEO Ron O’Hanley have recently suggested they will begin to use their massive investor leverage to push companies to take action around climate concerns. For example, Fink said BlackRock would “be increasingly disposed” to use its proxy vote to promote “sustainability” and that it would limit its stake in coal. Liberty Mutual recently announced that it would limit its underwriting of the coal industry.
While climate organizers have applauded these moves as a start, they are demanding quicker and more aggressive action to address our dire climate emergency. For example, BlackRock’s Big Problem has pointed out the many problems of Larry Fink’s new announcements around sustainability and the shortcomings of BlackRock’s recently-announced move away from some coal investments.
Moreover, Hooley’s decision to accept a lucrative board position with ExxonMobil, even as he remains a director of Liberty Mutual, raises serious questions over the extent to which Liberty Mutual can sufficiently make progress on climate issues while one of its most prominent directors is governing one of the world’s biggest oil companies.
Hooley tied to fossil fuel infrastructure lobbying in Massachusetts
Hooley and Liberty Mutual were also part of recent efforts to lobby Massachusetts Governor Charlie Baker to expand the state’s natural gas pipeline infrastructure.
In March 2018, the Massachusetts Competitive Partnership (MCP) released a letter “urging the state’s top three political leaders to push for an expansion of the region’s natural gas pipeline infrastructure,” according to Commonwealth Magazine. The public release of the letter came only after the MCP spoke to Governor Baker, House Speaker Robert DeLeo, and Senate President Harriette Chandler.
The MCP is a 17-member CEO council made up of Massachusetts’s most prominent corporations. Companies represented in the MCP include State Street, Liberty Mutual, Bank of America, Raytheon, Eversource Energy, Fidelity, and the Kraft Group.
Liberty Mutual CEO David Long has a seat on the MCP, and, as State Street CEO at the time, Hooley sat on the MCP during the natural gas pipeline lobbying.
Hooley has other Boston ties. In addition to formerly serving on the MCP, he is on the board of Boys & Girls Clubs of Boston and oggthe President’s Council of the Massachusetts General Hospital. He is also a former Trustee of Boston College.
Not just Hooley: Lee Raymond, ExxonMobil, and JPMorgan Chase
The interlocks between finance and the fossil fuel industry are seen in another figure: Lee Raymond, the former chairman and CEO of ExxonMobil, who is a 33-year board member of JPMorgan Chase.
Raymond is a powerful figure at JPMorgan Chase. He is Lead Independent Director and close with Chairman and CEO Jamie Dimon. According to the LA Times, “Raymond is described in public filings as the chief executive’s sounding board, advisor on long-term strategy and guide for annual performance reviews, as well as a key voice in who will one day succeed him. He oversees the board’s agenda, has the discretion to call members together whenever he wants, and runs meetings in Dimon’s absence.”
Raymond was Chairman and CEO of ExxonMobil from 1999 to 2005, and, prior to that, Chairman and CEO of Exxon Corporation from 1993, until its 1999 merger with Mobil Oil Corporation. While leading Exxon, he disputed global warming even as Exxon knew internally that fossil fuel emissions were warming the planet. “During his time at the helm he cut investment in renewable fuels, pushed countries to unite against emission limitations, and in 1997 said the planet was cooling,” wrote the LA Times.
JPMorgan is the world’s top financier of the fossil fuel industry, and is the focus of growing public scrutiny and protest around its role in propping up oil, gas, and coal companies worldwide. Shareholders and climate organizers – led by groups like Majority Action – are demanding that JPMorgan remove Raymond from its board.
Under growing pressure, JPMorgan Chase announced this week that it would “curb loans to coal firms and bar the financing of oil and gas developments in the Arctic,” though it “will still provide loans to oil and gas projects in the Lower 48 states or other parts of the world,” according to the Washington Post. All this indicates that JMorgan is feeling increasing pressure to make climate gestures that acknowledge its central role in driving global fossil fuel production, though many climate organizers see these measures as inadequate.