44 Time May 23/May 30, 2022
AT The end of The firsT quArTer
of 2021, as the CEOs of the three biggest
U.S. oil and gas companies presented
their irms’ earnings, investors ired
of a range of questions about how they
were addressing climate change. The
market had already come to view fossil
fuels as old, dirty energy, and after oil
prices cratered in 2020, owing largely
to the pandemic, investors wanted
to know how these companies would
adapt. They asked whether carbon cap-
ture could be an engine to grow reve-
nue, and how the companies viewed
the climate- policy landscape. “We are
committed to providing products to
help customers reduce their emissions,”
said Darren Woods, the CEO of Exxon-
Mobil. “Across the globe we’re helping
economies decarbonize.”
This year, the conversation was much
diferent. Oil and gas are now hot com-
modities following the Russian invasion
of Ukraine, and on irst-quarter inves-
tor calls in 2022, those same CEOs an-
nounced massive proits. As investors
dialed in to pepper the CEOs with ques-
tions, the topic of climate change hardly
came up. Instead, investors focused on
dividends and share buybacks: ways the
companies can pass along their proits
to shareholders.
For years, activists and politicians
have condemned the industry for its
eforts to deny the science of climate
change and delay any action to address
it. But what really moves the industry—
like any big industry—is inancial per-
formance. In the years leading up to the
COVID-19 pandemic, energy was the
worst- performing sector in the S&P 500
stock index—a reality that slowly but
surely forced leaders to question their
business model. Now the inancial re-
juvenation of the oil and gas industry
has created a complicated dynamic for
those pushing the sector to align with
the realities of climate change. Money
talks, and right now there’s a lot of
money to be made digging up and sell-
ing oil and gas. In a complete reversal
from two years prior, energy is now the
best- performing sector and the only in-
dustry on the S&P 500 index that has
seen valuations rise this year.
This renewed proitability has al-
ready raised alarms for many concerned
about the science of climate change. In
a 2021 report, the International Energy
Agency (IEA) laid out a pathway for
the world to meet the targets set in the
Paris Agreement, which calls for limit-
ing global temperature rise to less than
2°C relative to preindustrial levels.
To do that, public- and private-sectorleaders need to pour trillions of dollars
into clean energy, while also reducing i-
nancing for fossil fuels. Oil production
needs to fall 75% by 2050; to get there,
the world should already be ending in-
vestment in new fossil- fuel production
sites. “The scientists tell us that if we
want to have a planet that is still livable,
emissions need to come to net zero by
2050,” says Fatih Birol, the head of the
IEA. “If these things happen, oil de-
mand will go down.”
These dual exigencies—an indus-
try turning a healthy proit on its core
products and the urgent need to decar-
bonize the global economy—have led
activists around the world to ask a vari-
ation on the same question: How will
the reign of oil and gas end? AnotherCLIMATE