New York Sues Exxon Mobil over Alleged Climate Change Disinformation

New York Attorney General Barbara Underwood has filed a lawsuit against Exxon Mobil Corp., alleging the oil company systematically misled investors regarding the risk that climate change regulations posed to its business.

The complaint accuses Exxon of perpetrating a “longstanding fraudulent scheme” to deceive investors and the investment community by providing “false and misleading assurances that it is effectively managing the economic risks posed to its business” by climate change, said the lawsuit.

“Instead of managing those risks in the manner it represented to investors,” said the lawsuit, “Exxon employed internal practices that were inconsistent with its representations, were undisclosed to investors, and exposed the company to greater risk from climate change regulation than investors were led to believe.”

Underwood alleges that for years, Exxon assured investors that it was accounting for the likelihood of increasingly strict regulation of greenhouse gas emissions by rigorously and consistently applying an escalating cost of those emissions to its business planning, investment decisions, company valuations, and the amount and value of company reserves and resources.

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However, according to the lawsuit, Exxon did not abide by these representations, and instead did much less than it claimed, which misled investors as to the company’s real financial exposure to the effects of climate change.

“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,” Underwood said in a release.

“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.”

The complaint also alleges that Exxon’s fraud was “sanctioned at the highest levels of the company.” In one example, it said former Exxon CEO and former US Secretary of State Rex Tillerson knew for years that the company’s representations concerning proxy costs were misleading.

Tillerson allegedly knew that the company was using lower, undisclosed proxy cost figures in its internal guidance, rather than the higher, publicly disclosed proxy costs it used in its public representations, investment decisions, and business planning.

Trevor Neilson, co-founder and CEO of investment firm i(x) investments, welcomed the lawsuit.

“Exxon Mobil engaged in a decades-long scheme to obfuscate clear scientific findings about their impact, fueling climate change denial which has no basis in scientific fact,” said Neilson in a release. “This lawsuit shows they followed the playbook of the tobacco industry, deceiving investors and other stakeholders.”

And the Union of Concerned Scientists, which has issued reports on oil companies’ practice of disinformation for years, said the lawsuit was a significant step toward holding fossil fuel companies accountable for distorting climate science and misleading investors and the public about climate change.

“Exxon Mobil has a long track record of acknowledging facts about climate change privately and spreading disinformation publicly, and continues to do so today,” Peter Frumhoff, the Union of Concerned Scientists’ director of science and policy, said in a release. “Cities and counties across the country are filing lawsuits to seek compensation from Exxon Mobil for the costs of climate damages and adaptation. Now we’ll learn whether and how the company defrauded shareholders.”

Tags: Attorney General Barbara Underwood, Climate Change, ExxonMobil, New York, Rex Tillerson

Aging populations continue to confound governments worldwide as they struggle to assure financial security for retirees without overburdening their economies, according to the latest Melbourne Mercer Global Pension Index.

However, the Australian Centre for Financial Studies’ 10^th annual Melbourne Mercer Global Pension Index report also found that some countries have been more successful at tackling these issues than others.

“It’s a challenge that policymakers are grappling with,” said David Knox, author of the report, in a release. “For example, a system providing very generous benefits in the short-term is unlikely to be sustainable, whereas a system that is sustainable over many years could be providing very modest benefits. The question is—what’s an appropriate trade-off?”

The report measured 34 pension systems worldwide, and ranked them within a scoring system that ranged from 35 points and under for the worst systems, to 80 points and above for the best ones. It also assigned grades to each system based on those scores that range from A (best) to E (worst).

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The pensions systems in the Netherlands and Denmark were ranked the highest by the report, scoring an 80.3 and 80.2 respectively, and were the only systems that received an A grade. The report defines a pension system with an A grade as one that is “first class and robust,” and “delivers good benefits, is sustainable, and has a high level of integrity.”

While no systems received a B+ grade, which covers scores that range from 75 to 80, 11 countries’ pensions systems received a B grade, which means they scored between a 65 and 75 on the scale. Those include Finland, Australia, Sweden, Norway, Singapore, Chile, New Zealand, Canada, Switzerland, Ireland, and Germany.

The report defines a B-grade system as having “a sound structure, with many good features, but has some areas for improvement that differentiates it from an A-grade system.”

Colombia, the UK, Peru, and France each garnered a C+ grade, which means they scored between 60 and 65 on the scale, while Saudi Arabia, the US, Malaysia, Brazil, Hong Kong, Spain, Poland, Austria, Indonesia, Italy, and South Africa earned C grades, which covers systems that scored between 50 and 60.

A pension system with a C+ or a C grade is defined as one “that has some good features, but also has major risks and/or shortcomings that should be addressed. Without these improvements, its efficacy and/or long-term sustainability can be questioned.”

And ranked at the bottom of the list, and earning D grades, were Japan, South Korea, China, Mexico, India, and Argentina, which means they scored between 35 and 50. The report defines a grade D system as one “that has some desirable features, but also has major weaknesses and/or omissions that need to be addressed. Without these improvements, its efficacy and sustainability are in doubt.”

No system received the lowest possible grade of an E, which is defined “a poor system that may be in the early stages of development or non-existent.”

Tags: Australian Centre for Financial Studies, Melbourne Mercer Global Pension Index, Pension