Judge clears Exxon in investor fraud case over climate risk disclosure

(Inside Climate News, 10 Dec 2019) The judge excoriated the New York AG, but also said: 'nothing in this opinion is intended to absolve Exxon from responsibility for contributing to climate change.'

A New York judge has cleared ExxonMobil of allegations that it misled investors about the risks posed to its business by climate regulations, handing the oil giant a major victory in the first trial of a fossil fuel company involving climate change.

Justice Barry Ostrager sided entirely with Exxon on the claims brought against it by the New York Attorney General's Office, saying that he found all the company's witnesses to be truthful and that the state had failed to present any evidence that convincingly cast doubt on their testimony. 

While he praised Exxon's executives for "rigorously discharging their duties in the most comprehensive and meticulous manner possible," the judge excoriated the attorney general's case, saying it failed to establish that any investor was misled.

Ostrager also made clear, however, that "nothing in this opinion is intended to absolve ExxonMobil from responsibility for contributing to climate change," adding that the company's emission of greenhouse gases was not on trial. "ExxonMobil is in the business of producing energy, and this is a securities fraud case, not a climate change case," he wrote.

For Exxon, the decision ends a years-long battle with the New York Attorney General's Office.

The attorney general had accused Exxon of essentially using two sets of books when it came to evaluating the costs of future climate regulations. Exxon did in fact have two different estimates for what those costs would be, one that was higher and made public in numerous reports, and another that was lower, not disclosed, and which the company used internally to evaluate its own investments. The state had argued that this practice falsely assured investors that the company was taking the risks of regulation seriously, when in fact it was being much less cautious.

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Inside Climate News, 10 Dec 2019: Judge clears Exxon in investor fraud case over climate risk disclosure