SEC investigating Exxon on climate, accounting

SEC investigating Exxon on climate, accounting
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The Securities and Exchange Commission (SEC) is reportedly investigating oil giant Exxon Mobil Corp. over its policies regarding climate change and certain accounting methods.

The probe focuses in part on how Exxon, the United States’ largest oil and natural gas company, factors the impact of climate change and related government policies on its business, The Wall Street Journal reported Tuesday, citing sources familiar with the inquiry.

Officials also want to know why Exxon has not written down the values of its oil and gas reserves amid the precipitous price drop over the last two years, the Journal said. Nearly every major oil and gas company has written down their reserves to better reflect the lower values when prices are down.

The SEC declined to comment on the report.
Exxon spokesman Alan Jeffers confirmed the SEC investigation and said the company welcomes the probe, in contrast with the state investigations being conducted by the attorneys New York and Massachusetts.
“The SEC is the appropriate entity to examine issues related to impairment, reserves and other communications important to investors,” Jeffers said in a statement.
“We are fully complying with the SEC request for information and are confident our financial reporting meets all legal and accounting requirements.”

The agency started requesting information from Exxon and its accounting firm in August, the Journal reported.

The SEC probe is a significant escalation of climate change-related inquiries into Exxon, as well as a new front in SEC’s efforts to ensure that publicly traded companies make certain climate-related disclosures to investors.

Environmentalists and some congressional Democrats have called for the investigation over the last year. Reports in InsideClimate News and the Los Angeles Times found that Exxon knew decades ago about the effects of climate change on its businesses but told the public and shareholders that it was unsure about the science behind global warming.

For environment activists, the investigations are part of a years-long effort to hold fossil fuel companies accountable for the role that their products play in global warming.

The attorneys general of New York and Massachusetts, both Democrats, are investigating Exxon's climate research, and New York Attorney General Eric Schneiderman is reportedly also investigating the company’s write-down policies.

Schneiderman has shared some of the information from Exxon with the SEC for its probe, the Journal said.

Updated 7:23 p.m.