Colossal fossil ExxonMobil faced three financial and legal setbacks in 48 hours earlier this week, with shareholders demanding a formal audit of the company’s climate-related risk and a Massachusetts court rejecting its bid to dismiss a legal challenge to its climate transparency.
“This is no fringe element,” John Geissinger, chief investment officer of Christian Brothers Investment Services, told Politico, following a vote Wednesday in which 52% of Exxon shareholders supported a climate “stress test” to determine how the company would weather net-zero policies.
“Yet you have not quantified the impairment of existing assets, the remaining lives of assets, the effects on liabilities, the change in capital expenditures that would be required under the scenario,” Geissinger said. He added that there is a growing desire for transparency on how the company’s business will be affected by moves to lower emissions.
The resolution calls on the oil major to publish an audited report outlining how the International Energy Agency’s modelling of a net-zero economy by 2050 would affect the “assumptions, costs, estimates, and valuations” underlying its financial statements, reports the Financial Times. Exxon management had urged shareholders to vote against the measure, arguing the information was already readily available.
The company is also struggling to protect itself in court from evidence that it misled consumers and investors about climate change and the dangers of using fossil fuels.
On Tuesday, Massachusetts’ Supreme Judicial Court unanimously rejected Exxon’s attempt to dismiss a lawsuit from Attorney General Maura Healey, Reuters reports. After Exxon argued that the lawsuit violated a state law protecting defendants from a “strategic lawsuit against public participation” (SLAPP), the court ruled that the anti-SLAPP law applies to private lawsuits, not government enforcement actions.
Healey called the decision “a resounding victory in our work to stop Exxon from lying to investors and consumers in our state.” The AG had previously sued Exxon in 2019, alleging it deceived investors about the climate-driven risks to its business. Exxon denies wrongdoing and claims Healey’s case is politically motivated, Reuters writes.
The Massachusetts ruling came one day after Exxon, Shell, and other oil companies suffered defeat in a Rhode Island court ruling that allowed litigation to advance in the state court system. The companies had previously held up state cases over jurisdictional issues by arguing they should only be heard in federal courts. The Rhode Island ruling follows other similar decisions from courts in California, Baltimore, and Hawaii, says Drilled News.