American oil giant Exxon Mobil is to undergo a climate change lawsuit in New York. Sources allege the state has accused the American oil company for misleading investors about the alleged costs of climate regulation caused to its business.
Furthermore, Exxon also says that it has shared the necessary information and the claims were politically motivated. The case has become important when citing the large number of legal actions faced by gas and oil companies.
Exxon’s trial on the fraud claims will begin on Tuesday and are expected to continue for 15 days. Rex Tillerson, the former US Secretary of State, who is also leading Exxon for a decade is alleged to appear in the court.
“It’s a major milestone as a part of a growing wave of cases that Exxon and other major oil companies are facing, not only here in the United States, but in fact in jurisdictions around the world,” commented Carroll Muffett, the president of the Centre for International Environmental Law.
The fraud suit was filed by New York’s attorney general in 2018, following a series of investigation carried out by state authorities. The state claimed through internal documents that Exxon had evaluated projects on forecasts for costs associated with the climate change which were lower than those claimed by investors. Based on calculations, it made the investments appear more valuable and less risky.
Exxon on the other hand does not argue about the claims which state that it has used two calculations to evaluate the cost of potential regulation. The firm however claims that the calculations were “proprietary” and that the investors were not misled.
“Reasonable investors who reviewed ExxonMobil’s disclosures understood that climate risks factored into ExxonMobil's decision-making, which is all that could have mattered to them,” says a company’s source.
Furthermore, sources reveal activists had pressurized Exxon for several years to be more transparent about the effect of climate change on its business.
“Regardless of the outcome [of the New York case] the reality that is clear and not inescapable is that the future of Exxon and [other fossil fuel] companies is filled with litigation and it’s only going to grow.” Spoke Muffett.
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