By now, it’s no secret: insurance companies can play a key role in helping the world steer away from mounting climate catastrophe by refusing to underwrite the expansion of dirty oil, gas and coal infrastructure. That’s why climate advocates, environmental justice organizers and concerned stakeholders have been escalating their demands on big insurers to stop propping up the fossil fuel industry and all its associated climate and financial risks.
Liberty Mutual is among the most powerful insurance companies, and has a greater responsibility to address climate change than any other. That’s why it’s so alarming that Liberty Mutual board member Joseph “Jay” Hooley just becameThe new ExxonMobil Lead Director, possibly the most powerful Big Oil supermajor in the world, has been appointed.
ExxonMobil ranks among the top fossil fuel companies in the globe. It is directly responsible to the global climate catastrophe and actively stalling climate change for decades. Hooley joined ExxonMobil’s board of directors at the beginning of 2020 — and now, as ExxonMobil’s Lead Director, he is moving up the ranks to lead that board and oversee the governance of one of Big Oil’s top multinational powerhouses.
Hooley will continue to be responsible for ensuring ExxonMobil’s core business of oil and natural gas extraction and production continues to make a profit for many decades to come. He will also continue to earn compensation that gives him a personal financial interest in seeing ExxonMobil’s business boom. Hooley is currently owns 13,000 shares of ExxonMobil — worth well over $1 million — and his stake in the company is only set to grow. Hooley has a clear personal financial interest in seeing the company’s core business expand.
All of this creates a serious conflict for Liberty Mutual. Hooley, a board member, is responsible for governing the insurance giant as it navigates a future filled with climate chaos and climate risk. Although not enough, Liberty Mutual has made some climate-related gestures, such as limiting insurance coverage for coal-intensive companies, and pledging to reduce global Scope 1 and 2 greenhouse gas emissions by 50% by 2030. Hooley’s governing role and financial interest in a global Big Oil powerhouse raises major concern over whether he can help guide Liberty Mutual through even these minor commitments, let alone toward the much bigger commitments that stakeholders and advocates demand.
Moreover, Hooley’s oil and gas ties are just the most egregious of several other climate conflicts on Liberty Mutual’s board, with well over half of the company’s board having personal financial ties and governing and executive responsibilities tied to fossil fuel interests and extractive industries.
All this presents a stark conflict at the heart of Liberty Mutual’s governance: how are board directors like Hooley supposed to responsibly guide one of the world’s biggest insurance companies through the demands of the climate crisis while simultaneously governing over and personally profiting from the expansion of climate-destroying fossil fuel operations?
Big Oil’s Lead Director: Hooley Takes the Helm at ExxonMobil
Jay Hooley became ExxonMobil’s new lead directorFollowing the annual stakeholder meeting, May 25th, 2022. In this role, Hooley will be the most powerful non-executive member of Exxon’s board, which oversees the entirety of the corporation’s affairs. He will practically be running the show for ExxonMobil’s governing body.
Hooley’s responsibilitiesThis will include engaging with shareholders, setting agendas for and chairing executive session, and leading annual performance evaluations of the board.
In serving as ExxonMobil’s lead director, Hooley will be guiding a company dedicated to expanding its oil and gas production and promoting climate denialism to stall climate action.
ExxonMobil is one of the world’s most powerful and influential corporations. The company made over $1 billion. $14 billion in profitsIt has increased in the last two quarters pledgedThese profits can be leveraged into stock buybacks worth billions of dollars. Exxon is the US’s largest oil company. expandingExxon’s oil and natural gas operations in Permian Basin were the busiest in the world. Exxon is a testament to its decades of dedication in extracting and burning fossil fuels. main driverOur environment has been affected by increased carbon emissions, which has accelerated the global climate crises.
ExxonMobil, on the other hand, has been a leader in climate denialism over the past decades. Now we know that ExxonMobil knew for decades that carbon emissions were causing global climate change. Exxon did not just suppress this knowledge but also made it a crime. actively promotedClimate denialism and attempts to stall responses on climate change.
Hooley vs ExxonMobil: Liberty Mutual’s Major Conflict
Considering all this, one wonders how Hooley can justify serving on the board of Liberty Mutual while at the same time being responsible for guiding the board of one of the world’s biggest oil corporations whose core business deeply conflicts with climate goals.
ExxonMobil’s most recent annual report clearly states that the company’s “principal business involves exploration for, and production of, crude oil and natural gas.” Moreover, the “risk factors” identified in the report include increased climate regulation, denial of oil and gas permits, new efficiency standards, and other measures that we need to address the climate catastrophe. ExxonMobil regards new climate regulation as a core threat for its business.
Hooley also faces climate conflicts due to his financial stake in ExxonMobil. According to Exxon’s proxy statements, Hooley took in $675,311 in compensation in 2020$214,295 and $214.295 in 2021For a total of $889 606 in compensation, over the past 2 years. Stock awards accounted for the majority of this compensation. According to his most recent SEC Disclosure, Hooley 13,000 shares of Exxon Mobil stock are currently owned. These shares were worth $1,227,200at the close of the U.S. stock market on May 24, 2022, when Exxon’s share price closed at $94.40.
All of this means that ExxonMobil will continue to profit from oil-and-gas operations just as the fossil fuel sector and fossil fuel industry will continue to profit. With Hooley’s personal stake in fossil fuels, how can anyone trust him to also help oversee, as a board member, the climate demands that must be core to Liberty Mutual’s business in the years ahead?
Moreover, Hooley’s position also raises concerns over conflicts if Liberty Mutual insures any fossil fuel projects that Exxon is connected to, such as pipelines, refineries, or other infrastructure. With Hooley’s leading role at Exxon, Liberty Mutual must disclose any business it conducts with ExxonMobil and assure stakeholders that Hooley is not personally profiting from this business or otherwise abusing his director role at Liberty Mutual to benefit Exxon.
It’s also worth noting that Hooley’s location at the intersection of finance and fossil fuels is not new. Before joining the boards of ExxonMobil and Liberty Mutual, he was the President and CEO of State Street Corporation, generally considered the world’s third largest asset manager. State Street drew extensive scrutiny around the time of Hooley’s tenure because of its massive fossil fuel portfolio.
Ironically, Hooley is also the chairman of the board for a company that thrives in extractive industry and systems dependent upon fossil fuels. director of Aptiv, a self-proclaimed green tech company – once again, showing how he’s swimming in conflicts of interest.
A Conflicted Board: Liberty Mutual’s Climate Governance Problem
Hooley is not the only example of conflicts of interest at the core of Liberty Mutual’s governance when it comes to climate issues and the fossil fuel industry. As an extensive 2021 DeSmog investigation showed, Liberty Mutual’s board is awash in oil and gas ties.
Today, an astounding 9 out of 13 Liberty Mutual board members – a whopping 69% – have close ties to, and are personally profiting from, extractive industries. These include:
- Annette Verschuren beganHer career in the coal industry began with the Cape Breton Development Corporation. This is a coal mining company. She currently serves as a directorCanadian Natural Resources Limited CNRL continues to extract fuel from the country’s highly polluting tar sands.
- Francis A. Doyle, William C. Van Faasen David H. Long(who is also the CEO and Chairman at Liberty Mutual) are all current trusteesEversource Energy Eversource is a large utility in Northeastern United States that is expandingGas infrastructure throughout the region. According to Eversource’s proxy filings, the three directors have collectively taken in $5.5 million from Eversource during their times as directors.
- Martin SlarkIs it a board memberKoch Industries, one largestPrivate companies in the US that do major business in oil and natural gas refining, pipelines, and petrochemicals. The company’s owners have long fueled climate denialismThey opposed clean energy.
- Eric SpiegelIs it a directorDover Corporation, which produces multiple productsfor oil and gas operations. Spiegel worked for many years. consulting for the oil and gas industry as a former Managing Partner for Global Energy, Chemicals, and Power at Booz & Company (now Strategy&) and Booz Allen, where he “worked with major energy clients,” and is a former Associate in the Energy and Industrials Practice at Temple, Barker & Sloane (now Oliver Wyman). He also serves as Executive Chairman of EN Engineering, “a leading engineering services firm serving the automation, utility and oil and gas industries.”
- Nancy Quan is Chief Technical and Innovation Officer for the Coca-Cola Company, one of the world’s biggest drivers of plastic waste. In 2020, #BreakFreeFromPlastic advocacy group ranked Coca-Cola as the “#1 Top Global Polluter.” Fossil fuel production is the main driver of plastics used in consumer products. Fracking is a particular example. According to an investigationGreenpeace conducted a survey that found that Coca-Cola purchases packaging directly from companies that use plastic resin or petrochemicals such as ExxonMobil.
- Anne Walenski Is it a directorTredegar Corporation is a global producer of aluminum extrusions, plastic films, and other extrusions. to stateAccording to its most recent annual report, disruptions in petrochemical production pose a significant risk to its business.
These conflicts could be a reason that, despite Liberty Mutual’s acknowledgement that “fossil fuels are the driving factor contributing to climate change,” it does not address the imperative for ending fossil fuel expansion and phasing out coal, oil, and gas business in its most recent sustainability reports. Liberty Mutual has a new coal policy. does not rule outIt does not provide insurance for new oil and gas projects, nor does it outline a timeline or steps to eliminate insuring carbon-intensive energy sector sectors. Liberty also doesn’t address Indigenous rights or other human impacts on the projects it covers.
Ten major insurance companies have policies that limit the insurance they offer for new oil and natural gas projects. Thirteen other insurers have imposed restrictions on oil and gas drilling in Arctic National Wildlife Refuge and more than 15 have restricted their support for the tar and sands oil industry.
What will Liberty Mutual do?
Liberty Mutual is a company that insures and invests in fossil fuel companies and projects. This fuels climate change and environmental injustice. Given the severity of the climate catastrophe and the imperative to limit global warming to meeting the 1.5ºC goal, these firms must stop insuring fossil fuel expansion immediately, phase out existing fossil fuel insurance contracts in line with 1.5ºC, and divest from shares and bonds in those companies.
For Liberty Mutual, the urgency of implementing such policies – or taking any real action around climate – faces conflicting pressures and interests when its board members are directly governing oil and gas companies and benefiting from the fossil fuel industry’s expansion.
Jay Hooley’s position as lead director of ExxonMobil while also serving as director of Liberty Mutual raises these exact concerns. Hooley is a governing figure for ExxonMobil, a Big Oil supermajor with its core business in oil and gas. It sees increased climate regulation and potential loss of profits as a threat to its profits. Hooley is also personally profiting from Exxon’s business through his board compensation and stock ownership. He is also a governing figure for Liberty Mutual, when the insurance giant is under immense pressure to address climate risk and take meaningful action.
To have any real faith that Liberty Mutual can lead on climate – the most crucial issue any insurance company is facing in the midst of the climate catastrophe – the company must address the egregious climate conflicts at the core of its governance.
This report was created in partnership with our friends Rainforest Action Network.
