Exxon Still Isn’t Complying With Climate Subpoenas, New York Says

Exxon Mobil Corp. is refusing to turn over documents crucial to New York’s investigation into whether the oil giant’s public statements about climate change misled investors, the state’s top lawyer said.

Exxon hasn’t complied with subpoenas for cash-flow projections reflecting how it used so-called proxy costs to calculate the financial impact on its assets from future regulations tied to climate change, Attorney General Barbara Underwood said in a filing Tuesday in state court in Manhattan.

New York said it wants to know exactly how the proxy cost for greenhouse gas emissions has been used in making investment decisions, corporate planning reviews, reserves estimates and evaluations for more than two dozen assets and projects. The documents are located in a limited number of electronic folders where Exxon “knows this key evidence is stored,” the state said.

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The company, which in March lost a lawsuit to have the investigation thrown out, didn’t immediately respond to a request for comment.

The proxy cost is supposed to assure investors that future government regulations that may limit the use of fossil fuels are already taken into account in assessing the company’s value. But the state has said Exxon may use two sets of proxy costs, one for public use and one for internal applications, according to the filing.

“That distinction had not been disclosed in Exxon’s public representations; those public representations described proxy costs as a single concept, and failed to disclose that the company maintained a second, internal set of proxy costs that were lower, and thus took into account less risk than the figures described publicly,” New York said.

The state highlighted the issue in June 2017 when it told the court it found “significant evidence” that Exxon may have misled investors about how the proxy cost is applied, contending the company may have vastly exaggerated its use of such calculations. Exxon has denied wrongdoing, arguing that New York was wildly distorting how the company calculates the costs.


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