By Reuters and Fortune – 31 March 16
Source: Reader Supported News
New York Attorney General Eric Schneiderman launched an inquiry in November.
The top attorneys from Massachusetts and the U.S. Virgin Islands said on Tuesday they will investigate whether Exxon Mobil Corp misled investors and the public about the risks of climate change.
Massachusetts Attorney General Maura Healey and Virgin Islands Attorney General Claude Earl Walker announced their probes at a news conference in New York, flanked by New York State Attorney General Eric Schneiderman, former U.S. Vice President Al Gore and top attorneys from other states.
They said their probes into Exxon will be similar to ones launched by New York and California.
Healey said fossil fuel companies that have deceived investors about the risks climate change poses to the planet and to their bottom lines “must be held accountable.”
Walker said he wants to ensure there is transparency so consumers can make informed choices about what they purchase.
“If Exxon Mobil has tried to cloud their judgment, we are determined to hold the company accountable,” he said.
Exxon believes the probes by state attorneys general are “politically motivated,” said Suzanne McCarron, the company’s vice president for public and government affairs.
“We are actively assessing all legal options,” she said.
A total of 17 U.S. attorneys general are cooperating on probes into whether fossil fuel companies have misled investors on climate change risks. The officials will also collaborate on other climate-related initiatives.
In November, Schneiderman subpoenaed Exxon to demand extensive financial records and emails in connection with its climate change disclosures. California Attorney General Kamala Harris followed suit in January.
A coalition of more than 20 states has filed an amicus brief in support of the U.S. Environmental Protection Agency’s Clean Power Plan, a rule to crack down on carbon emissions that has been challenged by industry and 25 states in a federal appeals court.
The probes of Exxon were triggered by investigative reports last year by Inside Climate News and the Los Angeles Times that showed the company’s in-house scientists had flagged concerns about climate change decades ago, which the company ignored or contradicted.
Investors also have started to target Exxon over the climate issue. Last week, the Securities and Exchange Commission ruled that Exxon must include a climate change resolution on its annual shareholder proxy.
The Rockefeller Family Fund said last week it will divest from fossil fuels as quickly as possible and “eliminate holdings” of Exxon.
Shares of Exxon closed up 31 cents, or 0.37 percent, at $84.53 on Tuesday.
Gore, an active climate policy advocate, joined the attorneys general at the announcement, calling it a “turning point” in a broader effort to hold fossil fuel companies accountable. He said efforts by fossil fuel companies to downplay climate change were akin to the way the tobacco industry promoted smoking for years in spite of health warnings.
The Massachusetts and Virgin Islands attorneys general did not elaborate on what legal tools will guide their investigations. Legal experts have said options include consumer protection laws and “blue sky” securities laws.
The New York probe hinges on the state’s Martin Act, an anti-fraud law, as well as consumer protection statutes.
Some experts have said the issues involved could potentially trigger federal racketeering and organized crime (RICO) laws the Justice Department used in its landmark case against Big Tobacco.
But there’s skepticism as to whether Exxon’s actions and statements can be construed as criminal and beyond the protections of the First Amendment. Schneiderman said Tuesday, “The First Amendment, ladies and gentlemen, does not give you the right to commit fraud.”
Exxon‘s unusually long and pointed statement criticizing the probes said the company recognized the risks posed by climate change. It said any assumption it withheld information on the topic is “preposterous” and based on a “false premise that Exxon Mobil reached definitive conclusions about anthropogenic climate change before the world’s experts and before the science itself had matured, and then withheld it from the broader scientific community.”
In her emailed statement to Reuters, McCarron noted that Exxon scientists had participated with the United Nations Intergovernmental Panel on Climate Change.
She also said the probes by the state attorneys general would “have a chilling effect on private sector research.”