Judge Ruling in Exxon Case ‘Sends a Very Dangerous Signal to Companies’

BERKELEY, CA—DEC. 10, 2019—A New York judge today ruled that ExxonMobil was not guilty of misleading investors when it stated to investors that it used one cost of carbon in approving oil and gas projects, while using different and lower costs.

“The judge’s ruling is inexplicable,” said Andrew Behar, CEO of As You Sow. “When a company says one thing and does another, red flags should be flying in the investment community and in the courts. Discounting the critical importance of providing clear, accurate, and reliable material information to investors sends a very dangerous signal to companies and the investing community at large.”

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In 2014, As You Sow and Arjuna Capital Management filed a shareholder resolution at ExxonMobil asking the company for a report on the risk of stranded assets due to climate change related factors. In the negotiations following, Exxon agreed to provide a report which formed part of the basis of the lawsuit by the New York Attorney General’s Office alleging the company made misleading statements to investors about how it assessed climate risk.

The report concluded, on its first page that, “We are confident that none of our hydrocarbon reserves are now or will become ‘stranded.’” This was prior to Exxon writing down 19.3 percent of its oil reserves in high-carbon tar sands in Canada.

“The ruling in the case, finding that there were no material misstatements, is a disappointment to investors that have continuously asked for honest disclosure from the company on the critically important issue of climate risk,” said Danielle Fugere, president of As You Sow.

The Attorney General’s case highlights the importance of climate risk to investors and of providing accurate information to investors.