By Karen Savage
ExxonMobil’s method for calculating the risks posed to its business by climate change have been “inconsistent and haphazard and did not identify any meaningful impact from potential climate regulation,” Massachusetts Attorney General Maura Healey’s office said in an amended complaint filed earlier this month in her fraud lawsuit against the company.
The AG’s amended complaint addresses several developments since the case was filed last year, most notably reacting to weaknesses in New York’s similar lawsuit against Exxon, which the company won last year.
The Massachusetts AG’s office filed its suit against Exxon before that verdict was handed down in November, alleging the company has known for decades that its products cause climate change, but misled consumers and investors about that risk.
After a nearly three-week trial, New York Supreme Court Judge Barry Ostrager ruled that the NY AG’s office failed to prove that Exxon deceived investors by using two proxy costs of carbon–one for internal use and one disclosed to investors—when calculating future climate risk. A proxy cost of carbon is a number representing the estimated future cost of climate regulation.
The Mass. AG’s initial filing included a similar claim, alleging that Exxon deceived Massachusetts investors by making “false and misleading statements to Massachusetts investors regarding its use of a proxy cost of carbon.”
That claim, one of two related to investor deception, has been dropped from Massachusetts’ complaint and allegations related to Exxon’s use of the proxy cost of carbon have been consolidated to fall under the claim that the company “misrepresented and failed to disclose material facts regarding climate change risks.”
That doesn’t mean Exxon, which has consistently denied it misled the public about climate change, is off the hook for its potentially deceptive use of a proxy cost of carbon to evaluate future climate risk, or that the case won’t delve further into the issue.
“Over the last decade, ExxonMobil assured its Massachusetts and other investors that it had accounted for such risk by building into its business planning what is known as a ‘proxy cost’ of carbon,” the AG’s office wrote in the amended complaint.
“Through recent disclosures in litigation in New York state court, including trial testimony by current and former company managers and executives, it has become apparent that ExxonMobil’s repeated assurances to investors in this regard were—as with its misrepresentations about climate change risks more broadly—highly misleading.”
The oil giant is also still facing claims that it deceived consumers by promoting a false and misleading greenwashing campaign and that it “misled and continues to mislead Massachusetts consumers by representing that their use of ExxonMobil’s Synergy™ fuels and “green” Mobil 1™ motor oil products will reduce greenhouse gas emissions.”