Petroleum

Exxon Mobil Fights Allegations of Misleading Investors on Climate Change

The Litigation Begins

Fossil fuel giant Exxon Mobil is facing a fierce battle in New York’s Supreme Court over allegations that the corporation lied to shareholders and deceived the public about the impact that climate change could have on its business. Irving, Texas-based Exxon Mobil has vehemently denied the allegations and insists that evidence will show how the corporation didn’t mislead investors about its financial health. While this case is only the second climate change lawsuit to ever reach trial in the United States, it could be just the start of a long list of other pending lawsuits that intend to hold fossil fuel companies responsible for the impacts of climate change (Schwartz, 2019). After four years of turbulence between the New York Attorney General’s office and Exxon Mobil, lawyers on both sides of the case have finally made opening statements within Manhattan’s Supreme Court.

Wikipedia.jpg
Source: Wikipedia

New York’s Opening Statements

Kevin Wallace, an attorney from the State of New York, blasted Exxon Mobil in his opening statement by accusing oil industry executives of keeping a secret financial book hidden from investors and the public that outlined how government-imposed regulations to combat climate change would adversely impact the company’s financial health. According to Wallace, the evidence of this deception can be found within millions of pages of documents, including emails from top industry executives. If found guilty of defrauding shareholders and the general public, Exxon Mobil may be required to pay between $476 million and $1.6 billion in damages to shareholders (Bussewitz, 2019). Instead of clearly outlining the risk that climate change regulations would pose for its business, the New York Attorney General’s office claims that Exxon Mobil consistently provided false and misleading assertions, which ultimately affected its share price and cheated investors (Wamsley, 2019). In addition to failing to reveal how climate change would play a role in its business practices, reports also revealed how Exxon Mobil neglected to inform shareholders of its internal research into how global warming may open up new Arctic drilling locations that were previously inaccessible due to sea ice and permafrost.

dassel
Source: Pixabay, dassel

Exxon Mobil’s Rebuttal

In response to the disconcerting claims, attorneys for Exxon Mobil said that the allegations were politically driven and influenced by climate change activists rather than being based on facts. The company has fervently maintained that it has been clear and consistent about its financial health with shareholders. As a result of the New York trial, Massachusetts Attorney General Maura Healey revealed her intent to also pursue action against the company for violating the Massachusetts Consumer Protection Act. New court documents unveiled from this high-profile case will likely ease the path for other states and entities to file suit against Exxon Mobil for similar claims related to securities fraud. Manhattan Supreme Court Justice Barry Ostrager has stated that the trial will be concluded within three weeks and will be followed by a case decision within a month after its conclusion.

3844328
Source: Pixabay, 3844328

Case Origins

The development of this case dates back to 2015, when the Los Angeles Times first published a story that revealed how scientists for Exxon Mobil were privately studying how climate change would impact its business operations, while simultaneously, downplaying the role of climate change to the general public. Reporters for the Los Angeles Times conveyed how Exxon Mobil used scientific data related to climate change to make alterations to long-term business plans, even as the fossil fuel giant continued to provide funding to outside groups to spread doubt about greenhouse gas emissions fueling climate change. After this story was originally published, Exxon Mobil vowed that it had ceased funding climate change-denying groups in the mid-2000s. Even though the company now acknowledges the existence of climate change, the prominence of these new allegations has threatened the reputation of one of the oil industry’s biggest corporations.

JuergenPM
Source: Pixabay, JuergenPM

Sources:

Bussewitz, C. (2019). “Fighting suit, Exxon says it is accounting for climate rules.” Seattle Times: https://www.seattletimes.com/business/fighting-suit-exxon-says-it-is-accounting-for-climate-rules/

Jerving, S. (2015). “What Exxon knew about the Earth’s melting Arctic.” LA Times: https://graphics.latimes.com/exxon-arctic/

Schwartz, J. (2019). “Fossil Fuels on Trial: New York’s Lawsuit Against Exxon Begins.” New York Times: https://www.nytimes.com/2019/10/22/climate/new-york-lawsuit-exxon.html

Wamsley, L. (2019). “Exxon Is On Trial, Accused Of Misleading Investors About Risks Of Climate Change.” NPR: https://www.npr.org/2019/10/22/772241282/exxon-is-on-trial-accused-of-misleading-investors-about-risks-of-climate-change

Tags
Show More

Related Articles

Back to top button
Close