New York sues Exxon Mobil, saying it deceived shareholders on climate change

(New York Times, 24 Oct 2018) New York’s attorney general sued Exxon Mobil on Wednesday, claiming the company defrauded shareholders by downplaying the expected risks of climate change to its business.

The litigation, which follows more than three years of investigation, represents the most significant legal effort yet to establish that a fossil fuel company misled the public on climate change and to hold it responsible. Not only does it pose a financial threat to Exxon that could run into the hundreds of millions of dollars or more, but it could also strike a blow to the reputation of a company that has worked to rehabilitate its image, framing itself as a leader on global warming.

The suit does not charge Exxon with playing a role in creating climate change, though the burning of fossil fuels is a major contributor to human-driven warming. Rather, it is a fairly straightforward shareholder fraud suit, the kind that New York attorneys general have long brought and successfully prosecuted under state law.

It says the company engaged in a “longstanding fraudulent scheme” to deceive investors, analysts and underwriters “concerning the company’s management of the risks posed to its business by climate change regulation.”

Exxon essentially kept two sets of books when accounting for the effects of climate change, prosecutors said. The company told the world that it was prepared for the more stringent regulations that would inevitably be required to combat global warming. But in reality, according to the complaint, Exxon’s internal estimates discounted the potential future costs of climate policies, even though the threat of government action “exposed the company to greater risk from climate change regulation than investors were led to believe.”

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New York Times, 24 Oct 2018: New York sues Exxon Mobil, saying it deceived shareholders on climate change