Oct. 24 (UPI) -- New York Attorney General Barbara Underwood sued ExxonMobil on Wednesday, accusing the oil company of misleading investors about the risk climate change regulations posed to the business.
A complaint filed in New York's Supreme Court said ExxonMobil for years told investors it was preparing for the probability of increasingly stringent regulations on its effects on greenhouse gas emissions.
Underwood's office accused the company of telling investors it was "rigorously and consistently applying an escalating cost of those emissions to its business planning, investment decisions, calculations of the amount and value of company reserves and resources, calculations of the amount and value of company reserves and resources, impairment assessments, and projections of future demand for oil and gas."
The complaint said ExxonMobil did less than it promised but marketed itself as a secure long-term investment.
"Investors put their money and their trust in Exxon -- which assured them of the long-term value of their shares, as the company claimed to be factoring the risk of increasing climate change regulation into its business decisions. Yet as our investigation found, Exxon often did no such thing," Underwood said. "Instead, Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations."
The complaint said the fraud reached the highest levels in ExxonMobil, including former CEO Rex Tillerson, who left the company to become secretary of state. Tillerson allegedly knew the company was using a lower proxy cost than what the company told its investors it was using. A proxy cost corrects for the possibility of growing carbon costs based on the likely effects of things like climate change.
By failing to apply the publicly represented proxy cost, ExxonMobil undercounted 14 of its oil sands projects by more than $25 billion, undercounted projected greenhouse gas-related costs by up to $11 billion and overestimated the projected economic life of its reserves at Cold Lake by 28 years, the complaint said.
The lawsuit seeks unspecified damages, funds obtained in connection with the alleged fraud and restitution.