ExxonMobil has been sued by New York State’s attorney-general for allegedly misleading investors over the risks that climate change regulations posed to its business.
The suit says that Exxon for years told investors that it was accounting for the potential threat of increasingly stringent regulation of greenhouse gas emissions by applying an implied cost of carbon in its business planning, investment decisions, reserves calculations and projections of the outlook.
However, the attorney-general’s office alleges: “Exxon did not abide by these representations, and instead did much less than it claimed, deceiving investors as to the company’s true financial exposure to increasing regulations and policies adopted to mitigate the adverse effects of climate change.”
It added that Exxon had marketed itself as a secure long-term investment, and had courted long-term investors including New York State pension funds with about 1.4m members, which hold Exxon shares with a combined value of approximately $1.5bn.
Barbara Underwood, the attorney-general, said in a statement:
“Investors put their money and their trust in Exxon — which assured them of the long-term value of their shares, as the company claimed to be factoring the risk of increasing climate change regulation into its business decisions. Yet as our investigation found, Exxon often did no such thing.
“Instead, Exxon built a façade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations.”
Exxon shares were down about 1 per cent to $78.88 in a weak market after the suit was released on Wednesday,