• About
    • Which Energy Mix is this?
  • Climate News Network Archive
  • Contact
The climate news that makes a difference.
No Result
View All Result
The Energy Mix
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
SUBSCRIBE
DONATE
No Result
View All Result
The Energy Mix
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities
  FEATURED
Renewables ‘Set to Soar’ with 440 GW of New Installations in 2023: IEA June 4, 2023
Greek Industrial Giant Announces 1.4-GW Alberta Solar Farm, Canada’s Biggest June 4, 2023
Shift to Remote Work Cuts Commutes, Frees Downtown Space for Affordable Housing June 4, 2023
2.7M Hectares Lost, Nova Scotia at Ground Zero in ‘Unprecedented’ Early Wildfire Season June 4, 2023
Is Equinor’s Bay du Nord ‘Delay’ a Cancellation in Slow Motion? June 1, 2023
Next
Prev

WE’LL SEE YOU IN COURT: New York Lawsuit Says Exxon Misled Investors on Climate Risk

October 26, 2018
Reading time: 4 minutes

Mike Mozart/Flickr

Mike Mozart/Flickr

7
SHARES
 

Colossal fossil ExxonMobil stands accused of a “longstanding fraudulent scheme” to deceive investors with “false and misleading assurances” about its financial and business exposure to climate change regulations, in a major lawsuit filed Wednesday by Acting New York State Attorney General Barbara Underwood.

The filing in New York Supreme Court culminates three years of investigation by the attorneys general of New York and Massachusetts—in the face of continuing courtroom challenges from Exxon.

  • Concise headlines. Original content. Timely news and views from a select group of opinion leaders. Special extras.
  • Everything you need, nothing you don’t.
  • The Weekender: The climate news you need.
Subscribe

The suit says Exxon falsely assured shareholders it had fully disclosed the climate risk it faced, “and that its vast reserves of oil and gas weren’t at major risk of being left as strandedassets,” The Guardian reports.

“This fraud reached the highest levels of the company,” the lawsuit states, contending that ex-Exxon CEO and former U.S. secretary of state Rex Tillerson knew for years the company “was deviating” from public statements and using two sets of calculations about future climate regulations.

“Investors put their money and their trust in Exxon—which assured them of the long-term value of their shares,” Underwood said. “Yet as our investigation found, Exxon often did no such thing.”

Instead, the company “built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations.”

“The attorney general is effectively charging them with keeping two sets of books—one for internal purposes, one for external,” said Tom Sanzillo, finance director at the Institute for Energy Economics and Financial Analysis (IEEFA). “The result is a distortion of the value of the company.”

Exxon spokesperson Scott J. Silvestri responded that “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.”.

But “the lawsuit says ExxonMobil’s dual accounting calculations had a huge impact on the purported value of the company,” the Washington Post reports. “It says the company’s failure to apply an internal price on carbon at 14 of its oil sands projects in Alberta, Canada resulted in undercounting future greenhouse gas expenses by more than US$25 billion over the lifetime of the project.” New York contends that the company also overstated the economic life of its Cold Lake, Alberta tar sands/oil sands reserves by 28 years.

“Exxon told investors that it accounted for the risk of governmental regulation of climate change by applying a ‘proxy cost’ of carbon,” the attorney general’s office said in a prepared statement. “Exxon told its investors that it used that proxy cost in its investment decisions, corporate planning, estimations of company oil and gas reserves, evaluations of whether its long-term assets remain viable, and estimations of future demand for oil and gas.”

Yet the company “frequently did not apply the proxy costs as represented in its business activities,” the AG alleged. “Instead, in many cases Exxon applied much lower proxy costs or no proxy cost at all.”

Raymond James securities analyst Pavel Molchanov said New York will need “textual, documentary evidence of deliberate deceit on the part of management” to prove its case, adding that “estimating climate-related liabilities is more art than science because of how long-term and uncertain the calculations are.”

But David Hawkins, climate policy director at the Natural Resources Defense Council, stressed the importance of the case. “ExxonMobil needs to come clean as an energy company to protect our climate,” he told the Post. “Coming clean with its investors about the need to switch from fossil fuels would be an important first step.”

In the aftermath of the lawsuit, Sanzillo and his IEEFA colleague Kathy Hipple are calling the case “a stark indication of just how risky investing in oil and gas companies has become.”

With litigation against fossil companies expanding, the New York lawsuit “only increases the many risks facing the industry as the global economy is shifting toward less energy-intensive models of growth, fracking has driven down commodity and energy costs and prices, and renewable energy and electric vehicles are gaining market share,” they write.

“Investors, who once considered the energy sector a source of stable returns, had best look elsewhere.”

The Post says the lawsuit’s success could hinge on the 1921 Martin Act, a “particularly powerful, nearly 100-year-old securities law unique to New York” that gives the AG “sweeping power” to investigate and prosecute potential financial fraud.

“Contrary to Exxon’s attempts to spin this as a political witch hunt,” said Vermont Law School environmental law professor Patrick Parenteau, “this is a very serious enforcement action alleging illegal conduct that reaches to the highest levels of the corporate structure.”



in Community Climate Finance, Legal & Regulatory, Oil & Gas, United States

The latest climate news and analysis, direct to your inbox

Subscribe

Related Posts

sunrise windmill
International Agencies & Studies

Renewables ‘Set to Soar’ with 440 GW of New Installations in 2023: IEA

June 4, 2023
132
Oregon Department of Transportation/flickr
Cities & Communities

Shift to Remote Work Cuts Commutes, Frees Downtown Space for Affordable Housing

June 4, 2023
75
debannja/Pixabay
Ending Emissions

Austin, Texas Council Committee Backs Fossil Non-Proliferation Treaty

June 4, 2023
83

Comments 1

  1. Charles Coleman says:
    5 years ago

    Thank You!

    Maybe there is hope the human race after all!

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

Trending Stories

/MaxPixels

‘Substantial Damage’, No Injuries as Freight Train Hits Wind Turbine Blade

May 25, 2022
14.6k
Natural Resources Canada

2.7M Hectares Lost, Nova Scotia at Ground Zero in ‘Unprecedented’ Early Wildfire Season

June 4, 2023
149
sunrise windmill

Renewables ‘Set to Soar’ with 440 GW of New Installations in 2023: IEA

June 4, 2023
132
Pixabay

Greek Industrial Giant Announces 1.4-GW Alberta Solar Farm, Canada’s Biggest

June 4, 2023
119
debannja/Pixabay

Austin, Texas Council Committee Backs Fossil Non-Proliferation Treaty

June 4, 2023
83
Clairewych/Pixabay

Demand Surges for Giant Heat Pumps as Europe Turns to District Heating

June 4, 2023
82

Recent Posts

Oregon Department of Transportation/flickr

Shift to Remote Work Cuts Commutes, Frees Downtown Space for Affordable Housing

June 4, 2023
75
nicolasdebraypointcom/pixabay

Factor Gender into Transportation Planning, IISD Analyst Urges Policy-Makers

June 4, 2023
35
moerschy / Pixabay

Federal Climate Plans Must Embrace Community-Driven Resilience

June 4, 2023
51
Equinor

Is Equinor’s Bay du Nord ‘Delay’ a Cancellation in Slow Motion?

June 1, 2023
867
Ottawa Renewable Energy Co-op/Facebook

‘Hinge Moment’ for Humanity Demands ‘YIMBY’ Mentality: McKibben

June 1, 2023
76
https://en.wikipedia.org/wiki/Rachel_Notley

Notley Would Have Backed Carbon Capture Subsidies, Smith Less Certain: Ex-Pipeline Exec

June 1, 2023
100
Next Post

Renewable energy ousts diesel for islanders

The Energy Mix - The climate news you need

Copyright 2023 © Energy Mix Productions Inc. All rights reserved.

  • About
  • Contact
  • Privacy Policy and Copyright
  • Cookie Policy

Proudly partnering with…

scf_withtagline
No Result
View All Result
  • Canada
  • UK & Europe
  • Fossil Fuels
  • Ending Emissions
  • Community Climate Finance
  • Clean Electricity Grid
  • Cities & Communities

Copyright 2022 © Smarter Shift Inc. and Energy Mix Productions Inc. All rights reserved.

Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}