Sylvie Willis
Fossil fuel companies have been making billions in profits, with ExxonMobil, Chevron, Shell, and BP totalling over $100 billion in 2023. In the same year, the world experienced devastating climate-related disasters, including floods in Pakistan that impacted 33 million people and caused $40 billion in damages. Despite this, fossil fuel companies continue to lobby for their interests, deceive the public about climate change, and expand their fossil fuel development. These companies' short-sightedness and disregard for the planet and people's lives have led to public pressure for a fast and fair phase-out of fossil fuels. While disaster recovery efforts struggle for funding, fossil fuel companies pay out record amounts to their shareholders through stock buybacks and dividends, with ExxonMobil, Chevron, Shell, TotalEnergies, and BP spending $113.8 billion in 2023.
| Characteristics | Values |
|---|---|
| Fossil fuel companies' profits in 2022 | Nearly $200 billion |
| Fossil fuel companies' profits in 2023 | Over $100 billion |
| Fossil fuel companies' profits in 2024 | $102 billion |
| Fossil fuel companies' income in 2023 | Over $2.7 trillion |
| ExxonMobil and Chevron's combined profits in 2022 | $91.2 billion |
| Exxon and Chevron CEOs' combined pay over the last decade | Half a billion dollars |
| Amount spent by ExxonMobil, Chevron, Shell, TotalEnergies SE, and BP Plc on dividends and stock buybacks in 2023 | $113.8 billion |
| Amount spent by Big Oil on stock buybacks | Staggering sums |
| Fossil fuel companies' profits since 1970 | $52 trillion |
| Fossil fuel companies' daily profits | $3 billion |
| Fossil fuel companies' subsidies | $16 billion a day |
| Number of financial institutions that have made a divestment pledge | 893 |
| Combined assets of the 10 largest asset owners that have sold all direct holdings of thermal coal producers in the last two years | $1.4 trillion |
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What You'll Learn
Fossil fuel companies' record profits
Fossil fuel companies have been making record-breaking profits in recent years, even as the world experiences devastating climate-related disasters. In 2022, five major oil companies—ExxonMobil, Shell, BP, Chevron, and TotalEnergies—reported a combined profit of nearly $200 billion. This trend continued into 2023, with these companies' combined profits exceeding $100 billion. While people around the globe suffer the consequences of climate change, fossil fuel companies are enriching their shareholders and conducting stock buybacks.
The profits of fossil fuel companies come at the expense of our planet and the well-being of people worldwide. The industry's high profits are driven by the world's continued reliance on their products, which is maintained through lobbying and misinformation about climate change. The lack of significant government regulation on fossil fuel extraction and use further enables these companies to prioritize profit over the planet. As a result, they continue to extract and combust fossil fuels, locking us into a cycle of increased reliance, higher profits, and worsening climate change.
The impact of the fossil fuel industry's activities is felt globally, with climate-related disasters causing devastating losses. In 2022, the United States experienced 18 separate climate and weather-related disasters, including droughts, floods, severe storms, and wildfires. Globally, events such as the horrific flooding in Pakistan impacted 33 million people, causing up to $40 billion in damages and resulting in a severe loss of life and cultural heritage. While communities struggle to recover from these disasters, fossil fuel companies profit from their harmful products, demonstrating a disregard for the well-being of people and the planet.
Accountability is crucial to breaking the cycle of fossil fuel dependence and mitigating climate change. Strategies such as divestment, engagement, and shareholder activism have emerged to challenge the industry. Individuals and asset owners are recognizing the impact of their investments and are increasingly divesting from fossil fuel companies. Additionally, public pressure is mounting for a fast and fair phase-out of fossil fuels, highlighting the industry's disinformation and denial of the climate crisis. These efforts are essential to ensuring that fossil fuel companies are held responsible for their actions and prioritizing the health of our planet and its inhabitants over profits.
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Shareholder payouts
Fossil fuel companies have been making billions of dollars in profit each year, while the world is incurring record losses due to extreme weather events and climate change. In 2022, five major fossil fuel companies (ExxonMobil, Shell, BP, Chevron, and TotalEnergies) reported a total of nearly $200 billion in profits. In 2023, the combined profits of ExxonMobil, Chevron, Shell, and BP totaled over $100 billion. These companies' profits come at the expense of global health, safety, and the environment.
The fossil fuel industry's high profits are driven by the world's continued addiction to its products and global conflicts. The lack of significant government regulation on fossil fuel extraction and use has allowed companies to prioritize profit over the environment and public health. The industry's lobbyists advocate for increased fossil fuel production and reduced environmental regulation, perpetuating a cycle of increased reliance on fossil fuels and industry profits.
While fossil fuel companies profit, there are growing calls for accountability and a transition to renewable energy. The industry has been criticized for its aversion to renewable energy and its expansion of fossil fuel development. There is a growing movement for fossil fuel divestment, with financial institutions responsible for $6.15 trillion in assets making divestment pledges. As the world moves towards renewable energy, investors in fossil fuel companies risk being left with stranded assets.
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Fossil fuel divestment
The moral motivation behind fossil fuel divestment stems from the belief that profiting from knowingly damaging the planet is wrong, especially when the impacts of such damage disproportionately affect those who have benefitted the least from fossil fuel extraction and use. Philosopher and climate justice campaigner Alex Lenferna presents three interlocking moral arguments in favor of fossil fuel divestment: investing in fossil fuels contributes to substantial and unnecessary harm and injustice; divesting from fossil fuels helps fulfill our moral responsibility to promote climate action; and investing in fossil fuels morally tarnishes those who do so by making them complicit in the injustices of the fossil fuel industry. Additionally, financial research suggests that fossil fuel divestment has positively impacted investors' returns in the long term.
The fossil fuel industry's high profits primarily result from the world's continued addiction to its products, which the companies themselves lobby to maintain. In 2022, just five companies in the fossil fuel industry—ExxonMobil, Shell, BP, Chevron, and TotalEnergies—reported a total of nearly $200 billion in profits. During the same year, the world experienced numerous climate-related disasters, including the devastating flooding in Pakistan that impacted 33 million people and caused up to $40 billion in damages. The fossil fuel industry plays a dominant role in causing climate change, and its profits come at the expense of global health, safety, and efforts to address climate change.
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Share buyback schemes
While share buyback schemes can benefit investors, they have also faced criticism. Some view these schemes as controversial, as they allow companies to line the pockets of shareholders while causing detrimental impacts on the environment and contributing to climate change. The fossil fuel industry's profits often come at the expense of global health and safety, with people around the world bearing the costs of worsening climate disasters. Additionally, the taxation system favours shareholders, as they are often taxed at lower rates than wage or salary earners, creating a loophole that allows investors to profit from rising energy and fuel bills while paying less tax.
To address these concerns, governments can play a role by implementing taxes on shareholder payouts. By taxing dividends at the same level as incomes, governments can raise significant revenue, as evidenced by the potential £6 billion annual increase suggested for the UK government. Additionally, public pressure is crucial to hold fossil fuel companies accountable and ensure a fair and swift transition away from their harmful practices.
In conclusion, share buyback schemes are a strategy used by fossil fuel companies to enhance shareholder value and signal financial confidence. However, these schemes have faced criticism due to the detrimental environmental impacts of the fossil fuel industry and the perceived unfair taxation system favouring shareholders. Governments and public advocacy are essential to address these concerns and promote a more sustainable future.
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Fossil fuel investors' lobbying power
Fossil fuel companies have been making billions of dollars in profit annually, while climate disasters and worsening effects of climate change have caused people around the world to suffer billions of dollars in losses. For instance, in 2022, ExxonMobil and Chevron, two US-headquartered companies, made profits of $55.7 billion and $35.5 billion, respectively. That same year, the US experienced 18 separate climate and weather-related disasters, including droughts, floods, severe storms, and wildfires. The following year, the combined profits of ExxonMobil, Chevron, Shell, and BP totaled over $100 billion.
Despite the fossil fuel industry's detrimental impact on the planet and its contribution to climate change, companies in this industry continue to lobby for their interests, deceive and misinform the public about climate change, and build new infrastructure to perpetuate the cycle of fossil fuel extraction and combustion. They engage in lobbying at the expense of people and the planet, as evidenced by the CEO of Chevron, who boasted about the company's record profits and fossil fuel production levels in 2023.
The lobbying power of the oil and natural gas industries is undeniable, and they employ various strategies to influence public opinion and policy. One such tactic is "astroturfing," where these corporations manufacture fake grassroots movements to persuade citizens to act against their interests. For example, in 2019, a letter circulated along the Delaware-Maryland coast warned neighbors of a wind farm to be constructed offshore and asked them to oppose it. This tactic creates the illusion of grassroots support for the fossil fuel industry while undermining renewable energy initiatives.
Shareholders of fossil fuel companies also have a vested interest in lobbying and exerting their influence over the management of these companies. Research has shown that institutional investors frequently support lobbying efforts and bear responsibility for obstructing policy-driven climate change mitigation. The world's largest asset manager groups have increased their holdings of thermal coal reserves, indicating a lack of strategic effort to shift away from coal. This passive fund management approach contributes to the continued dominance of fossil fuels and delays the transition to clean energy.
To counter the lobbying power of the fossil fuel industry, civic engagement and grassroots campaigns are essential. Individuals can research and support candidates who advocate for building the sustainable energy sector. Additionally, engaging with local, state, or national representatives and expressing the urgency of divesting from fossil fuels can send a powerful message. By organizing and mobilizing, citizens can reclaim power from these corporations and drive the necessary transition towards sustainable energy.
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Frequently asked questions
It is difficult to calculate the exact amount made by fossil fuel shareholders annually, however, fossil fuel companies have been known to funnel record profits to their shareholders. For example, in 2022, BP hiked dividend payouts by 10% and announced a share buyback scheme worth £2.3 billion.
Fossil fuel companies make large profits by extracting more fossil fuels from the ground, lobbying for their interests, deceiving and misleading the public about climate change, and building new infrastructure to lock us into a continual cycle of extraction and combustion.
Fossil fuel companies' profits come at the expense of the planet and its people. These companies contribute to climate change, which causes extreme weather events such as droughts, floods, severe storms, and wildfires, resulting in devastating losses for communities worldwide.
Governments can play a crucial role by introducing taxes on shareholder payouts and closing tax loopholes that allow investors to pay lower taxes than wage earners. Additionally, there should be a focus on transitioning to renewable energy sources and holding fossil fuel companies accountable for their actions through court proceedings.
Fossil fuel companies receive various tax subsidies and benefits from governments. For example, in the United States, conservative estimates of direct subsidies to the fossil fuel industry are around $20 billion per year. These subsidies have been criticized for incentivizing increased fossil fuel production and hindering the transition to renewable energy sources.
