One of the attorney generals behind a years-long probe into ExxonMobil’s climate history said Friday that there is evidence that the oil producer misled investors about the effects of global warming.
New York Attorney General (AG) Eric Schneiderman submitted to a federal court documents that he believes show Exxon has been using public and secret numbers to calculate the future impact of Earth’s warming on its assets.
The secrets numbers show the effects climate regulations have on the company’s future assets, the Democrat said. The U.S. Securities and Exchange Commission (SEC) is also conducting an examination of Exxon’s accounting practices. Republican lawmakers believe Schneiderman orchestrated SEC’s investigation.
“That evidence suggests not only that Exxon’s public statements about its risk management practices were false and misleading, but also that Exxon may still be in the midst of perpetrating an ongoing fraudulent scheme on investors and the public,” Schneiderman said.
Exxon maintains that the AG’s investigation “is about politics and publicity, not law enforcement.”
“ExxonMobil’s external statements have accurately described its use of a proxy cost of carbon, and the documents produced to the Attorney General make this fact unmistakably clear,” the company wrote in a press statement Friday.
Exxon said in a 2014 report that it applied a cost of $60 per ton of greenhouse gas emissions in 2030 to its projects in developed countries. Schneiderman’s documents appeared to show the oil producer used a price of $40 per ton internally.
Schneiderman’s court filings come less than a week after the company’s shareholder supported a resolution requiring the oil producer to report on financial risks stemming from various climate regulations passed during the Obama administration.
More than 60 percent of investors voted in support of the proposal May 31 at Exxon’s annual investor meeting — a similar proposal gained 38 percent support last year. Exxon opposed Wednesday’s proposal.
The company has indicated support for several climate measures, including the Paris climate agreement and carbon taxes. But officials with the company argued the measures could negatively impact Exxon’s business model.
Much of Schneiderman’s probe is based on reports from liberal-leaning media outlets InsideClimate News and Columbia University, both of which claim Exxon has known the risks of global warming for decades but kept such knowledge under wraps.
Federal officials have criticized Susanne Rust, one of the lead researchers responsible for Columbia’s Exxon reports, in the past for allowing her environmental activism to dictate her research on the oil company. She has been responsible in recent years for research generating fear about other issues.
Regulators dismissed much of Rust’s research showing that an additive called BPA found in plastic bottles can poison foods and water. The Federal Drug Administration has researched such claims and found the chemical “contained no health risk.”
In addition, legal analysts are skeptical about the merits of claims that investors would not have known about the effects climate change might have on Exxon’s finances. Analyst Merritt Fox, for instance, noted last year that it’s inappropriate to use laws such as the Martin Act to target the company for potential fraud.
The law requires the likelihood that a reasonable investor would consider the omitted important information and decided “not to vote or buy, sell, or hold, and that it has to significantly alter a total mix of information available to this reasonable man or reasonable investor,” he told a Columbia Law School panel in 2016.
However, since the information was already easily acquired using a computer, television, or some other tool, according to Fox, then whatever data Exxon chose to hide or withhold was not “material,” or likely to affect the decision making of its investors.
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