New York State Is Suing Exxon for Lying to Shareholders About Climate Change

Illustration for article titled New York State Is Suing Exxon for Lying to Shareholders About Climate Change
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On Wednesday, the New York attorney general opened up a new front in the climate law war against Big Oil. Barbara Underwood, the state’s chief lawyer, filed a suit alleging that Exxon has defrauded its shareholders for years about the impact climate regulations could have on its business, and broken New York state law in the process.

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The case focuses on Exxon’s accounting practices and has no relation to other suits filed by multiple attorneys general to figure out just how much Exxon knew about its role in causing climate change while misleading the public by sowing doubt about science. Instead of science, the new filing is about money.

“This filing moves the fight to a whole new level,” Michael Gerrard, the director of Columbia’s Sabin Center for Climate Change Law, told Earther.

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You see, Exxon is not stupid. It knows climate change is happening and that sooner or later, the world’s governments are going to have do something about it. That something—likely a carbon market or carbon tax—will inevitably cut into Exxon’s profits.

That’s why the company has said it has an internal price on carbon built into its operations. And the assurance that it’s thinking about that is what gives rich folks, pension funds, and whatnot the confidence to invest in Exxon. But the New York suit alleges that Exxon hasn’t exactly been honest with those folks about how it was internally pricing carbon.

The suit names a number of projects, including 14 tar sands sites in Canada. On those projects alone, the suit says Exxon under accounted for a whopping $25 billion in carbon pricing over their lifespans, meaning these projects are likely to be a lot less profitable in the long run than the company says.

“Exxon has repeatedly and falsely assured investors that it has taken active and consistent steps to protect the company’s value from the risk that climate change regulation poses to its business,” the attorney general wrote in the court filing.

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The suit alleges that it wasn’t just low level flunkies that duped investors, either. In addition to “Exxon management,” the suit points directly to former CEO, burner email aficionado, and diplomatic luminary Rex Tillerson as being involved. It says he “knew for years that the company’s representations concerning proxy costs were misleading.”

To remedy these oopsies, the attorney general is suing Exxon so that it will “tell investors the truth” according to a press release. Oh, and also make payments to shareholders from all the money it made while allegedly lying to them.

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Managing editor, Earther

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DISCUSSION

dnapl
Dense non aqueous phase liquid

Like other similar lawsuits, this one seems extra stupid and NYC-ish. Especially when New York City is the home of ICE. No, not that ICE. We’re talking about International Commodity Exchange where oil, oil futures, crack spreads, LNG etc are traded. There probably is a cute young second wife of an oil trader or hedge fund manager in Manhattan right now thinking about writing a check to NRDC or Sierra Club because she’s worried about the environment and shit.

Anywho...

Risk factors have to be reported in corporate annual 10-k filings. Environmental risks (usually old fashioned pollution stuff) had to be reported starting around the early/mid aughts. Let’s try to find out when the subject of climate change came up in risk factors:

2004:

Just good old air, water and land protection and remediation. I couldn’t find anything about climate change.

2008:

Couldn’t find anything about climate change

2009

ditto (or is it ibid.)

2010 (fiscal year 2009) is when climate change is expressly discussed:

Climate change and greenhouse gas restrictions. Due to concern over the risk of climate change, a number of countries have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These include adoption of cap and trade regimes, carbon taxes, increased efficiency standards, and incentives or mandates for renewable energy. These requirements could make our products more expensive and reduce demand for hydrocarbons, as well as shifting hydrocarbon demand toward relatively lower-carbon sources such as natural gas. Current and pending greenhouse gas regulations may also increase our compliance costs, such as for monitoring or sequestering emissions.

That’s like right when Bush handed Obama a flaming turd of an economy and Obama went forward with “all the above” to back our asses out of an almost depression. The domestic oil and gas boom (fracking) was started to fight terrorism or something. It was supported by all the security first freaks.

Skip to 2018 - about the same with some changes.

Climate change and greenhouse gas restrictions. Due to concern over the risks of climate change, a number of countries have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These include adoption of cap and trade regimes, carbon taxes, restrictive permitting, increased efficiency standards, and incentives or mandates for renewable energy...