Oil and natural gas companies, it turns out, are routinely included in sustainability indexes, especially those that take a “best-in-class” approach to their portfolios in order to gain exposure to all sectors of the economy, including energy. Shares in fossil fuel companies are also held by many funds that describe themselves as socially-responsible, or say they are concerned about climate change–including such well-known names as Calvert, Domini and Parnassus. I’ll have more to say about this in a day or two.
Chevron has a particularly unseemly record when it comes to the environment, and not just because of the lawsuit in Ecuador, which is about as tangled an affair as you can imagine. [If you want to read both sides of the lawsuit story, along with thousands of pages of documents, visit The Amazon Post, which is Chevron's website arguing that the lawsuit is a fraud, and ChevronToxico, the critics' website. Here's the latest on the case from Roger Parloff of Fortune, a respected legal journalist.] A court in Ecuador last year awarded plaintiffs suing Chevron over environmental damages an $18 billion judgment, but a US federal judge has called the verdict tainted.
Set the lawsuit aside for now. There are other good reasons to ask why Chevron would be included in a sustainability index. Among them:
- Chevron has been operating in the tar sands of Alberta since 2006, digging up some of the dirtiest oil to be found on the planet.
- Chevron’s huge Richmond, CA, oil refinery caught fire last summer, sending 15,000 people for treatment for respiratory problems. It’s had a history of air pollution violations.
- Chevron’s investments in alternative energy have been touted in advertising (“Human Energy”) but they represent a small fraction of the money the company spends exploring for oil and gas.
- Chevron’s climate change policy is weak. The company has opposed, through trade organizations like the American Petroleum Institute, pricing carbon emissions.