ExxonMobil On Trial Over Business Impact Of Climate Change | On Point

 

In this April 23, 2018, file photo, the logo for ExxonMobil appears above a trading post on the floor of the New York Stock Exchange. (Richard Drew, File/AP)

ExxonMobil goes on trial over charges it defrauded investors about climate change.

Guests

Nicholas Kusnetz, reporter for InsideClimate News. (@nkus)

David Hasemyer, reporter for InsideClimate News. He co-authored the 2016 Pulitzer Prize-finalist series “Exxon: The Road Not Taken,” about (@DavidHasemyer)

From The Reading List

InsideClimate News: “Exxon and Oil Sands Go on Trial in New York Climate Fraud Case” — “In late 2013, ExxonMobil faced increasing pressure from investors to disclose more about the risks the company faced as governments began limiting greenhouse gas emissions. Of the many costs climate change will impose, oil companies face a particularly acute one: the demand for their product will have to shrink.

“For years, Exxon had been using something called a proxy cost of carbon to estimate what stricter climate policies might mean for its bottom line. But as pressure from shareholders grew, a problem came sharply into focus: An internal presentation warned top executives that the way the company had been applying this proxy cost was potentially misleading. That’s because Exxon didn’t have one projected cost of carbon. It had two.

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“The contents of that presentation are at the heart of a trial set to start next week in a civil case brought against the company by the New York attorney general. Exxon is accused of disclosing one set of these projected carbon costs to investors while planners used an entirely different set internally for evaluating investments. The public set was more conservative and projected that climate policies would be more stringent, while the internal one assumed more modest attempts to limit emissions. The effect of using these dueling estimates, the attorney general says, was that Exxon hid tens of billions of dollars in potential costs, downplaying the risk to investors and inflating the company’s value.

“If the company is found guilty of defrauding stockholders, the penalties it faces could be substantial. Exxon’s stock is among the most widely held in the country, nestled in pension funds, 401Ks and IRAs.”

Wall Street Journal: “Exxon’s Climate-Change Accounting Goes on Trial” — “Exxon Mobil Corp. and New York’s attorney general are headed for a showdown this week over accusations the company deceived investors, a rare trial over how the oil industry accounts for the impact of climate change.

“The trial, which begins Tuesday in state court in Manhattan, is the culmination of a sprawling investigation into Exxon and its accounting practices that spanned four years and three New York attorneys general. It is expected to include as a witness former Secretary of State Rex Tillerson, who was Exxon’s chief executive from 2006 to 2016.

“The attorney general’s office said the company told investors that it was taking into account the future costs of regulations it expected governments to adopt in response to climate change. But Exxon’s internal calculations didn’t match its public representations, the office said.

“The attorney general’s office said the company’s misrepresentations caused investors to overvalue its stock. It estimated the damage to shareholders to be between $476 million and $1.6 billion.”

InsideClimate News: “Exxon: The Road Not Taken Series ” — “At a meeting in Exxon Corporation’s headquarters, a senior company scientist named James F. Black addressed an audience of powerful oilmen. Speaking without a text as he flipped through detailed slides, Black delivered a sobering message: carbon dioxide from the world’s use of fossil fuels would warm the planet and could eventually endanger humanity.

“In the first place, there is general scientific agreement that the most likely manner in which mankind is influencing the global climate is through carbon dioxide release from the burning of fossil fuels,” Black told Exxon’s Management Committee, according to a written version he recorded later.

“It was July 1977 when Exxon’s leaders received this blunt assessment, well before most of the world had heard of the looming climate crisis.

“A year later, Black, a top technical expert in Exxon’s Research & Engineering division, took an updated version of his presentation to a broader audience. He warned Exxon scientists and managers that independent researchers estimated a doubling of the carbon dioxide (CO2) concentration in the atmosphere would increase average global temperatures by 2 to 3 degrees Celsius (4 to 5 degrees Fahrenheit), and as much as 10 degrees Celsius (18 degrees Fahrenheit) at the poles. Rainfall might get heavier in some regions, and other places might turn to desert.”

…(read more).

See related:

The work of the Pulitzer Prize-winning journalist, Ross Gelbspan pointed to ExxonMobil’s corruption ot the fossil fuel “debate” decades ago:

Others have taken the work of Gelbspan and expanded our understanding. See:

See also:

The real “corruption” of ExxonMobil has involved the corruption of the public discourse by the way it has sown confusion, disseminated doubt (through hundreds of millions of dollars in ad campaigns over the decades) and short-circuited the discussion of any effective public policy on fossil fuels. Their campaigns of distortion have been global — matching the same scale of the global problem which they were generating and from which they were reaping unprecedented profits.   As Bill McKibben pointed out years ago, Exxon made more money in one year than any other company in the history of money.

Perhaps most fundamentally, they succeeded in corrupting the notion of “cost-benefit” analysis — a tool regularly used by misguided economists to assess economic performance of corporations, as well as state and national government accounts.

More broadly, the corruption of the public mind — fueled by ExxonMobil’s decades-long disinformation campaigns — has involved the perpetuation of the myth of infinite growth on a finite planet.  As any ecologist or biologist will affirm, this is not possible on a finite planet.

The courts are now examining whether or not ExxonMobil has proceeded fraudulently with its own share-holders.  Unfortunately the courts will not examine the broader question of how ExxonMobil along with the other fossil fuel industries, including coal and natural gas, have corrupted the public mind of the industrial world, depriving the entire human community of the capacity to adapt to the tragedy they have engendered and from which they have profited.

This is the source of the bitterness and anger now so clearly expressed by the next generation:

 

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