Risk & Compliance

N.Y. Probing Exxon Mobil Over Climate Research

The state's attorney general is looking into whether the company failed to disclose the risks that climate change could pose to its business.
Katie Kuehner-HebertNovember 6, 2015
N.Y. Probing Exxon Mobil Over Climate Research

New York’s attorney general has launched an investigation into whether Exxon Mobil misled the public and investors about how climate change might affect its business.

A spokesman for Exxon Mobil confirmed Thursday that the company had received a subpoena from the office of Attorney General Eric Schneiderman related to climate change and was “assessing” its response.

A person familiar with the matter told the Washington Post that the investigation focuses on whether Exxon Mobil intentionally hid from investors the risks that climate change could pose to its business. Schneiderman has requested documents dating back to 1977, the Los Angeles Times said.

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The investigation follows media reports suggesting that during the 1980s and 1990s, Exxon Mobil incorporated climate research into its business practices while simultaneously arguing, in newspaper ads and public statements by company executives, that climate change science was murky.

“We unequivocally reject allegations that Exxon Mobil suppressed climate change research,” company spokesman Scott Silvestri told the Post.

The Securities and Exchange Commission requires that companies disclose the risks of climate change to their business operations, legal experts say. But the SEC “has taken almost no enforcement actions — to the great frustration of environmental advocates — and so to a certain extent the New York attorney general is jumping into that void,” Michael Gerrard, a law professor at Columbia University, told the L.A. Times.

Schneiderman’s investigative tools include the Martin Act, a New York law that gives the state’s attorney general broad power to prosecute companies for financial fraud.

According to the Times, he is asking not only for documents related to climate research Exxon conducted, but also for any materials related to business decisions the company made knowing the Earth’s atmosphere was warming.

A number of current and former U.S. senators and representatives, including Hillary Clinton, Bernie Sanders. and Al Gore, have called for a criminal investigation of Exxon Mobil. Schneiderman’s office is also investigating Peabody Energy, the biggest coal producer in the U.S.

“We may be seeing the opening salvo of litigation akin to the tobacco lawsuits from the 1990s,” said Kenneth Rumelt, a professor at Vermont Law School. “The major difference this time is that the stakes are higher.”

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