Exxon Mobil prevailed Tuesday in a lawsuit accusing the energy giant of downplaying the toll that climate change regulations could take on its business, with a judge saying the state attorney general's case didn't prove the company deceived investors — but also didn't excuse it of any accountability for global warming.
New York Attorney General Letitia James' office didn't prove “that Exxon Mobil made any material misstatements or omissions about its practices and procedures that misled any reasonable investor,” state judge Barry Ostrager in Manhattan wrote in dismissing the case.
“Nothing in this opinion is intended to absolve Exxon Mobil from responsibility for contributing to climate change through the emission of greenhouse gases,” he added. “But Exxon Mobil is in the business of producing energy, and this is a securities fraud case, not a climate change case.”
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ExxonMobil Corp. hailed the ruling in a trial that it said stemmed from a “baseless investigation.”
“We provided our investors with accurate information on the risks of climate change,” the Irving, Texas-based company said in a statement. “Lawsuits that waste millions of dollars of taxpayer money do nothing to advance meaningful actions that reduce the risks of climate change.”
James' office didn't immediately have a statement. The Democrat's office had hoped the court would order Exxon to pay an estimated $476 million to $1.6 billion in restitution to shareholders.
The lawsuit accused Exxon Mobil of essentially keeping two sets of books — telling the public that it was fully taking into account the costs of potential future climate regulations in a warming world, while lowballing those costs behind the scenes as it made investment decisions and assessed the value of its oil and gas reserves.
The burning of fossil fuels for electricity, transportation and heat is the main source of manmade heat-trapping carbon emissions. Scientists have warned that the world must cut those emissions to stave off the worst effects of warming.
Exxon Mobil has used two different metrics to account for potential carbon costs: a "proxy cost" for predicting how regulations worldwide might reduce demand for oil and gas, and a "greenhouse gas cost" used to figure how local regulations might affect specific projects.
Its executives and attorneys said the company applied the appropriate costs depending on the situation. But the attorney general's office said the two-part system added up to minimizing emissions price tags on some oil and gas development projects, making them look more financially attractive.
"Exxon applied much lower costs or no costs at all," attorney Jonathan Zweig said last month in the state's closing argument after a 12-day trial.
Exxon Mobil said it did nothing wrong, took climate change seriously and had no incentive to underestimate its future costs.
"We knew it was a real issue," former CEO and ex-Secretary of State Rex Tillerson testified in October. "We tried to understand how this was going to affect everything.”
He said Exxon Mobil's system for gauging climate risks and costs that was “as robust as we could make it at the time, and continued to try to improve it.”