New York AG: Exxon’s climate accounting ‘may be a sham’

New York AG: Exxon’s climate accounting ‘may be a sham’
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New York’s Democratic attorney general said he has uncovered evidence that could show that Exxon Mobil Corp. has misled investors about the impacts of climate change on its operations.

Attorney General Eric Schneiderman wrote in a New York state court filing Friday that he has found potential problems with Exxon’s “proxy cost,” the method it uses to internally account for the impacts of its greenhouse gas emissions and potential climate policies in its books.

The filing is part of an ongoing case in which Schneiderman is investigating whether Exxon has illegally mislead the public and investors about what it knows about climate change. In the filing, he asks the court not to grant Exxon’s request to quash subpoenas he has sent to the company.

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“Contrary to Exxon’s unsupported assertion that nothing in its production to date justifies [the Office of the Attorney General’s] continued investigation into the accuracy of such representations, OAG has uncovered significant evidence of potential materially false and misleading statements by Exxon about its application of a proxy cost of GHGs to its investment and impairment decisions, suggesting that the exercise described to investors may be a sham,” Schneiderman wrote.

The attorney general argued Exxon may have deliberately underestimated the costs of climate change to attract investors.

“Exxon’s own documents suggest that if Exxon had applied the proxy cost it promised to shareholders, at least one substantial oil sands project may have projected a financial loss, rather than a profit, over the course of the project’s original timeline,” Schneiderman wrote.

In a statement, Exxon defended its accounting methods as accurate.

“ExxonMobil’s external statements have accurately described its use of a proxy cost of carbon, and the documents produced to the attorney general make this fact unmistakably clear,” said Exxon spokesman Scott Silvestri. “We will respond fully to the attorney general’s inaccurate and irresponsible allegations about proxy cost in our court filings.”

Silvestri added that Schneiderman’s investigation is “about politics and publicity.”

Exxon has tried to stop the investigation, saying that Schneiderman is acting on improper political motives. For the most part, Exxon’s attempts have been unsuccessful.

Schneiderman argued in the Friday filing that Exxon has not presented a valid case for why the subpoenas should be blocked.

— This story was updated at 3 p.m.