Exxon Mobil Corp. plans to fight a lawsuit filed Oct. 24 by Massachusetts Attorney General Maura Healey's office claiming, among other things, that the oil major hid the potential financial risks of climate change regulations from investors.
The complaint was filed in Suffolk Superior Court and alleges that Exxon "systematically and intentionally" misled Massachusetts investors about the impacts of climate change on its business and about the role that Exxon's products have in contributing to it, the attorney general's office said in an Oct. 24 news release.
"Exxon has known for decades about the catastrophic climate impacts of burning fossil fuels — its chief product," Healey said in the release. "Yet, to this day, Exxon continues to deceive Massachusetts consumers and investors about the dangerous climate harms caused by its oil and gasoline products and the significant risks of climate change — and efforts to address it — to Exxon's business. We are suing to stop this illegal deception and penalize the company for its misconduct."
Exxon intends to refute the allegations, which it called "meritless," in court, company spokesman Scott Silvestri said in an Oct. 25 email. "The Massachusetts attorney general's office has filed a baseless complaint three years after announcing its politically motivated investigation, during which they have not interviewed a single ExxonMobil employee or gathered one piece of evidence from the company."
Citing internal company documents, the complaint alleges that as far back as 1980, an expert retained by Exxon presented findings to the company that the projected rise in global temperatures caused by burning fossil fuels would have far-reaching "economic consequences."
The Massachusetts suit also charges that since 2007, Exxon has illegally misrepresented to its investors that it factored in the compliance costs, or "proxy costs," of complying with potential carbon regulations to its financial planning and investment decisions.
Exxon is one of many energy companies that has come under increasing pressure from investors to assess and publicly disclose their emissions and to outline how they are accounting for climate change in their business models.
Under SEC regulations, a company must disclose through public filings with the agency any "material information" — such as risks potentially affecting the financial future of the company — that investors need to know about to make informed decisions.
Healey and then New York Attorney General Eric Schneiderman began investigating Exxon in 2016 following press reports of leaked internal documents that suggested the company may have known, long before the general public, that emissions from fossil fuels contributed to global warming and climate change and that cuts to fossil-fuel consumption would be necessary to address that risk.
Healey served Exxon with a civil investigative demand in April 2016. Exxon argued that it was not subject to personal jurisdiction in Massachusetts and New York and sought relief on constitutional grounds in federal court in Texas. But the U.S. District Court for the Northern District of Texas kicked the case back to the states.
In January 2017, the Massachusetts Superior Court ordered Exxon to comply with the Massachusetts investigation by turning over climate-related documents. The Massachusetts Supreme Judicial Court upheld the ruling in April 2018, and that same month, the Southern District of New York dismissed Exxon's federal lawsuit against Massachusetts. In January, the U.S. Supreme Court denied Exxon's request to hear its appeal of the Supreme Judicial Court ruling.