Could Exxon’s Climate Risk Disclosure Plan Derail Its Fight to Block State Probes?

Two state prosecutors are investigating whether Exxon misled its shareholders about climate change. The oil giant wants a court to stop them.

In an SEC filing earlier this month, Exxon dropped its opposition to a shareholder demand for more disclosure about the risks climate change poses to the oil giant's business. Credit: Scott Olson/Getty Images
In an SEC filing this month, Exxon dropped its opposition to a shareholder demand for more disclosure about the risks climate change poses to the oil giant's business. Credit: Scott Olson/Getty Images

Share this article

ExxonMobil’s recent announcement that it will strengthen its climate risk disclosure is now playing into the oil giant’s prolonged federal court battle over state investigations into whether it misled shareholders.

In a new court filing late Thursday, Attorney General Maura Healey of Massachusetts, one of two states investigating the company, argued that Exxon’s announcement amounted to an admission that the company had previously failed to sufficiently disclose the impact climate change was having on its operations.

Healey’s 24-page filing urged U.S. District Court Judge Valerie E. Caproni to dismiss Exxon’s 18-month legal campaign to block investigations by her office and New York Attorney General Eric Schneiderman’s.

Exxon agreed last week to disclose in more detail its climate risks after facing pressure from investors. In a filing with the Securities and Exchange Commission, it wrote that those enhanced disclosures will include “energy demand sensitivities, implications of 2 degree Celsius scenarios, and positioning for a lower-carbon future.”

Healey and her staff of attorneys seized on that SEC filing to suggest it added weight to the state’s investigation of Exxon.

“This filing makes clear that, at a minimum, Exxon’s prior disclosures to investors, including Massachusetts investors, may not have adequately accounted for the effect of climate change on its business and assets,” Healey’s filing states.

This is the latest round of legal maneuvering that erupted last year in the wake of subpoenas to Exxon by the two attorneys general. They want to know how much of what Exxon knew about climate change was disclosed to shareholders and potential investors.

Coming at a point that the once fiery rhetoric between Exxon and the attorneys general appears to be cooling, it nonetheless keeps pressure on the oil giant.

Exxon has until Jan. 12 to file replies with the court.

In the documents filed Thursday, Healey and Schneiderman argue that Exxon’s attempt to derail their climate fraud investigations is a “baseless federal counter attack” and should be stopped in its tracks.

“Exxon has thus attempted to shift the focus away from its own conductwhether Exxon, over the course of nearly 40 years, misled Massachusetts investors and consumers about the role of Exxon products in causing climate change, and the impacts of climate change on Exxon’s businessto its chimerical theory that Attorney General Healey issued the CID (civil investigative demand) to silence and intimidate Exxon,” the Massachusetts filing states.

Exxon maintains the investigations are an abuse of prosecutorial authority and encroach on Exxon’s right to express its own opinion in the climate change debate.

Schneiderman scoffs at Exxon’s protests, noting in his 25-page filing that Exxon has freely acknowledged since 2006 there are significant risks associated with rising greenhouse gas emissions.

“These public statements demonstrate that, far from being muzzled, Exxon regularly engages in corporate advocacy concerning climate change,” Schneiderman’s filing states.

The additional written arguments had been requested by Caproni and signal that the judge may be nearing a ruling.