NY prosecutor says Exxon misled investors on climate change | Reuters


By Emily Flitter
| NEW YORK

NEW YORK New York’s top prosecutor on Friday increased pressure on Exxon Mobil to turn over records of internal assessments of the risks global warming poses to its businesses, claiming to have found evidence of “potential materially false and misleading statements by Exxon,” court filings show.

Attorney General Eric Schneiderman has been investigating whether the U.S. oil giant misled investors by publicly stating that it thought the risks of climate change were low while privately admitting they were far higher. But on Friday he said Exxon ignored a formula it told investors it was applying to estimate the cost of future environmental regulation on new deals when putting together internal projections.

His filing came a day after President Donald Trump announced plans to withdraw the U.S. from the Paris climate accord, in which nearly 200 countries pledged to lower their greenhouse gas emissions to try to slow global warming. World leaders and many U.S. executives condemned the decision.

An Exxon spokesman did not immediately respond to a request for comment. Exxon has called the probe politically motivated and abusive.

‘A SHAM’

Schneiderman’s filing focused on the method Exxon used to give its investors estimates of the regulatory cost of greenhouse gas emissions on new projects. The company frequently showed investors a number it called a “proxy cost” for greenhouse gasses as a way to assure them it was accounting for potential changes to government policy that would make producing and burning fossil fuels more expensive.

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“The exercise described to investors may be a sham,” Schneiderman wrote, adding that Exxon may have actually low-balled the cost of carbon-emissions regulations in its internal calculations compared with what it told investors.

“Exxon’s own documents suggest that if Exxon had applied the proxy cost it promised to shareholders, at least one substantial oil sands project may have projected a financial loss, rather than a profit, over the course of the project’s original timeline,” Schneiderman wrote.

MORE SUBPOENAS

Exxon has been fighting Schneiderman’s requests for information about its climate change policies in both state and federal court, claiming it should not have to turn over records because the New York prosecutor’s probe is politically motivated and abusive to the company.

Friday’s filing included a request for internal documents Schneiderman says Exxon has been withholding, as well the ability to interview Exxon employees who might know about Exxon’s internal climate change discussions.

Massachusetts Attorney General Maura Healey is also investigating the company. Both probes are modeled after earlier investigations of tobacco companies, which were shown to admit in great detail internally that smoking was bad for human health while publicly maintaining it was not.

On May 23, a New York State appeals court ruled Exxon should turn over records Schneiderman was requesting.

Exxon has already turned over 2 million documents as part of the investigation, leading to the discovery that Secretary of State Rex Tillerson, who until December was chief executive of Exxon, used a separate email address and an alias, “Wayne Tracker,” to discuss climate change-related issues while at the company.

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(Reporting By Emily Flitter; Editing by Nick Zieminski)

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