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NY prosecutor says Exxon misled investors on climate change

Posted by: Admin | Posted on: June 2nd, 2017 | 0 Comments

NEW YORK New York’s top prosecutor on Friday accused Exxon Mobil of misleading investors about how it accounts for climate change risks, court filings show, increasing pressure on the company to turn over documents.

Attorney General Eric Schneiderman claims to have evidence of “potential materially false and misleading statements by Exxon” that could have led investors to think the U.S. oil giant company properly assessed the risks when it actually ignored a formula to estimate the impact of future environmental regulation on new deals.

Schneiderman’s filing came a day after President Donald Trump announced plans to withdraw the United States from the Paris climate accord, in which nearly 200 countries pledged to lower their greenhouse gas emissions to try to slow global warming. World leaders and many U.S. executives condemned the decision.

“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,” said Exxon spokesman Scott Silvestri. “We will respond fully to the Attorney General’s inaccurate and irresponsible allegations about proxy cost in our court filings.”


Schneiderman’s filing focused on the method Exxon used to give its investors estimates of the regulatory cost of greenhouse gas emissions on new projects. The company frequently showed investors a number it called a “proxy cost” for greenhouse gasses as a way to assure them it was accounting for potential changes to government policy that would make producing and burning fossil fuels more expensive.

“The exercise described to investors may be a sham,” Schneiderman wrote, because Exxon may not have actually applied it when estimating profits and losses on its investments.

“Exxon’s own documents suggest that if Exxon had applied the proxy cost it promised to shareholders, at least one substantial oil sands project may have projected a financial loss, rather than a profit, over the course of the project’s original timeline,” Schneiderman wrote.

Exxon has been fighting Schneiderman’s requests for information about its climate change policies in both state and federal court, claiming it should not have to turn over records because the New York prosecutor’s probe is politically motivated and abusive to the company.

Friday’s filing included a request for internal documents Schneiderman says Exxon has been withholding, as well the ability to interview Exxon employees who might know about Exxon’s internal climate change discussions.

Massachusetts Attorney General Maura Healey is also investigating the company. Both probes are modeled after earlier investigations of tobacco companies, which were shown to admit in great detail internally that smoking was bad for human health while publicly maintaining it was not.

On May 23, a New York State appeals court ruled Exxon should turn over records Schneiderman was requesting.

Exxon has already turned over 2 million documents as part of the investigation, leading to the discovery that Secretary of State Rex Tillerson, who until December was chief executive of Exxon, used a separate email address and an alias, “Wayne Tracker,” to discuss climate change-related issues while at the company.

(Reporting By Emily Flitter; Editing by Nick Zieminski)

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