New York state sued Exxon Mobil on Wednesday, alleging it defrauded investors by misrepresenting the costs that climate change legislation poses to the company.
New York state sued Exxon Mobil on Wednesday, alleging it defrauded investors by misrepresenting the costs that climate change legislation poses to the company. The suit, filed in New York Supreme Court, asserts the oil giant misled investors into believing the company was adequately accounting for potential climate change policy.
The action accuses the company of misleading investors in its discussion of the “proxy cost” of climate mitigation, the additional spending that would be needed in the event governments moved ahead with aggressive action to limit emissions that make some oil projects uneconomical.
While the state asserts Exxon Mobil publicly discussed one “proxy cost,” it based business decisions either on a lower cost it used for internal planning, or did not factor in any costs for climate mitigation at all. The company’s reassurances to investors that it faced little risk from more aggressive climate policies were “based on assumptions it knew to be unreasonable and unsupported,” said the suit, which was filed by New York Attorney General Barbara Underwood.
As a result, Exxon Mobil understated the costs connected with 14 oil projects in Canada by more than $25 billion, the suit said. The litigation follows a three-year-old investigation by former New York Attorney General Eric Schneiderman and continued by Underwood.
Exxon Mobil dismissed the allegations as groundless and the product of “anti-fossil fuel activists,” a spokesman said. “The New York Attorney General’s office doubled down on its tainted, meritless investigation by filing a complaint against ExxonMobil,” the spokesman said in a statement.
“These baseless allegations are a product of closed-door lobbying by special interests, political opportunism and the attorney general’s inability to admit that a three-year investigation has uncovered no wrongdoing.”
In July, a US judge dismissed another lawsuit by New York State seeking damages from Exxon Mobil and four other oil companies for contributing to climate change. In August, Exxon Mobil said it had been notified that the US Securities and Exchange Commission was ending a two-year probe into the oil giant’s climate disclosures without taking action.