The case, which alleges that major oil company ExxonMobil purposely deceived investors, began opening arguments today.
Almost 12 months to the day since the office of New York’s attorney general launched a lawsuit against oil sector giant ExxonMobil (NYSE:XOM) over deceiving shareholders, opening arguments will be heard in a Manhattan Supreme Court room Tuesday (October 22) morning.
The attorney general’s office alleges Exxon purposely deceived investors when it reported it had adequately adapted to the impact of future climate change regulations.
“Exxon provided false and misleading assurances that it is effectively managing the economic risks posed to its business by the increasingly stringent policies and regulations that it expects governments to adopt to address climate change,” reads the complaint.
“Instead of managing those risks in the manner it represented to investors, Exxon employed internal practices that were inconsistent with its representations, were undisclosed to investors, and exposed the company to greater risk from climate change regulation than investors were led to believe.”
Exxon, which has a market cap of US$290 billion and is one of the largest oil producers globally, has refuted the allegations, claiming the suit is political posturing and the result of lobbyist interference.
“These baseless allegations are a product of closed-door lobbying by special interests, political opportunism and the attorney general’s inability to admit that a three-year investigation has uncovered no wrongdoing.”
While Exxon cries political foul, former Secretary of State Rex Tillerson, who served as Exxon’s CEO before taking office under US President Donald Trump, may be called on to testify about his knowledge of company practices around climate change and investor relations.
If successful, the case could have wide spread implications for the oil and gas sector as more countries and jurisdictions look to hold big companies accountable for the impacts climate change is having on their locales.
The effect of rising sea levels in coastal jurisdiction is an area of particular focus, with activists and some lawmakers believing companies should pay for sea walls to prevent the encroaching tides.
A climate report released earlier this month credited 20 fossil fuel companies with producing 35 percent of all energy-related carbon dioxide and methane worldwide, for a grand total of 480 billion tonnes of carbon dioxide equivalent emitted since 1965.
Exxon was number five on the list.
Acknowledging the need to address climate change, Exxon’s website notes, “We believe that climate change risks warrant action and its going to take all of us — business, governments and consumers — to make meaningful progress.”
The company states that since 2000 it has invested US$10 billion to develop lower-emission energy solutions.
The court case is expected to last roughly three weeks.
Shares of Exxon were trading at US$69.56 on Tuesday (October 22).
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.