In Exxon's wake, 20 states tackle corporate 'climate fraud'

In Exxon's wake, 20 states tackle corporate 'climate fraud'

glacier ice climate change and corporate fraud Exxon
ShutterstockMikhail Varentsov
What role have corporations played in stalling action on climate change?

Attorneys general from a host of U.S. states, including Illinois, Vermont, Massachusetts and Oregon, have joined investigations by New York and California state officials into companies suspected of trying to mislead the public about climate-related risks.

During a meeting of Democrat Attorneys General (AGs) this week, Massachusetts AG Maura Healey said her state would join investigations launched last year by New York and California AGs into whether oil giant Exxon Mobil misled investors about climate change risks in order to protect its business — charges Exxon Mobil vigorously has denied.

Meanwhile, around 15 other state AGs said they would back investigations and enforcement actions against companies found to have committed so-called "climate fraud."

The announcement follows substantial investigations by the Los Angeles Times and Inside Climate News, which suggest Exxon Mobil's scientific experts knew about the environmental damage of burning fossil fuels from the 1980s.

"Companies that deceived investors and consumers about the dangers of climate change ... must be held accountable," Healey said at the meeting.

The new coalition was welcomed by campaign group Greenpeace, with the charity's U.S. executive director, Annie Leonard, describing the announcements as a "clear demonstration of climate leadership."

"Big Polluters have done everything in their power to deny climate change. It is time for our justice system to take back the climate debate," she said in a statement. "If the AGs rally behind a unified call, they can make history."

The latest action further highlights the legal risk carbon intensive companies can face if they fail to adequately disclose climate and other material environmental risks to disclosures.

It comes during a proxy season that has seen a number of high profile listed firms face fresh calls from shareholders for them to improve climate disclosure processes and beef up their emission reduction strategies in the wake of the Paris Agreement.

Writing on BusinessGreen, James Thornton, chief executive of environmental law firm ClientEarth, said increased pressure on firms to improve climate reporting was part of a global trend.

"Corporations can no longer bank on a steady flow of unquestioning investor backing," he wrote. "Their main currency is investor trust — and the best way to secure it is to be transparent.

"So we're seeing a huge increase in stewardship activities. Investors are using their financial clout as a lever to ask corporations to behave better — more specifically, to ensure and prove resilience in the face of a changing climate."

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