ExxonMobil has been accused of misleading investors about the risks that are associated with its business and climate change. This emerged after a legal action was taken by the state of New York against the oil major.
It has been alleged that the company had assured its investors that it had taken all risks into account when in reality it had actually over looked the potential costs associated with new regulations related to emission of greenhouse gases.
The allegations were rebuked by the company and called then them to be “baseless” and politically motivated and pledged to continue to fight the allegations in court.
Exxon “looks forward to refuting these claims as soon as possible and getting this meritless civil lawsuit dismissed”, company spokesman Scott Silvestri told the media.
Investigations into the issue for a number of years preceded the filing of the complaint in New York Supreme Court by Attorney General Barbara Underwood.
The case accuses the oil company of using forecasts for costs associated with climate change which were lower compared to what the company informed the investors in relation to evaluation of new projects.
The case alleged that the company managed to lower cost by billions of dollars by calculating the risks thus.
“As a result of Exxon’s fraud, the company was exposed to far greater risk from climate change regulations than investors were led to believe,” the complaint said.
The complaint also added that the decision of downplaying the costs were known to the top management of the company which included former chief executive Rex Tillerson – who later served as US Secretary of State.
Similar concerns in the past have been faced by the company. The company has vehemently opposed the allegations.
A law suit in court was filed by shareholders in 2016 where they alleged that investors were misled by investors as it did not disclose the results of the investigations that it had carried out itself about climate change and the associated risks.
Later, shareholders voted to make it mandatory for the company to make assessment of the risks for climate change.
The firm’s climate change disclosures have also reportedly been investigated by the US Securities and Exchange Commission which is a federal financial regulator.
But according to a Wall Street Journal report, no charges were brought against the company when the investigation was closed this summer.
New York City had earlier sued Exxon and other oil companies over their responsibility for climate change, but a judge dismissed that suit in July
(Adapted from BBC.com)