During a panel on climate change, hosted July 30 by the National Whistleblower Center (NWC), experts discussed how the current financial distress of the fossil fuel industry creates the potential for fraud. The panel pointed to the NWC’s recent report Exposing a Ticking Time Bomb: How Fossil Fuel Industry Fraud is Setting Us Up for a Financial Implosion – and What Whistleblowers Can Do About It. This report reviews the potential economic damage that the fossil fuel industry could cause the global financial system if they continue to influence reports and deny the extent of climate change.
The panel took place as part of the NWC’s National Whistleblower Day celebration. The panel of experts, convened to discuss the role of whistleblowers in the Climate Change Crisis, included Kathy Hipple, a financial analyst for the Institute for Energy Economics and Financial Analysis, Dan Berkovitz, a Commissioner of the U.S. Commodity Futures Trading Commission (CFTC), and Veena Ramani, the Senior Program Director at Ceres, a leading non-profit sustainability organization. John Kostyack, the Executive Director of the NWC, moderated the panel.
Kathy Hipple began the conversation by explaining companies’ financial distress can produce pressures and incentives for companies to commit fraud. She then demonstrated that the fossil fuel industry as a whole has been in decline for decades. Fossil fuels went from being 30% of the S&P 500 in 1980 to 3% today. She explained that while no one could have predicted the financial crash that COVID-19 has set off in the fossil fuel industry, the signs that the industry was susceptible to a financial crash were obvious and should have been seen. Dan Berkovitz then gave a briefly explained the CFTC and its role in guarding against fraud and what it can do for whistleblowers. He touched on his hopes for increased regulation of cryptocurrency and other industries susceptible to fraud, including the fossil fuel industry. Veena Ramani then took the stage and discussed the issue of underreporting fraud in the fossil fuel industry. She pointed out that regulators who have the power to keep the fossil fuel industry in check can only do so with whistleblowers’ help.
The panel agreed that the devastation to the fossil fuel industry caused by the COVID-19 crisis would worsen if climate change continues.