Rex Tillerson, Exxon Mobil’s former CEO and a one-time U.S. secretary of state, told a New York City courtroom that his former company didn’t lie to investors about the risks climate change posed to the firm, rejecting fraud charges levied by the state’s attorney general.
Tillerson testified for 3 ½ hours in one of the most high-profile climate trials in the U.S., which seeks to establish what big oil companies understood about climate change and the risks it poses to their businesses. He was CEO when Exxon adopted a system to manage the financial risks of climate change, a system New York says was fraudulent.
“It was a real system,” he said in cross-examination by Exxon’s lawyer, in remarks reported by Bloomberg News. “It was robust.”
The Attorney General’s Office says Exxon investors overvalued the company’s shares by as much as $1.6 billion because of the way the company calculated climate costs. Exxon told shareholders that it was addressing all the potential costs of climate change, when in fact the company didn’t share one of its calculations, New York claims
New York began investigating Exxon in 2015 after articles by InsideClimate News and the Los Angeles Times showed that company scientists had reported in 1977 that the burning of fossil fuels must be curbed to reduce the impact of climate change. Exxon hid the growing evidence it was gathering and sowed doubt about climate risks, the stories showed.
Tillerson argued that New York’s attorney general, Letitia James, misunderstands Exxon’s model for estimating climate risk, according to news reports. The state claims the oil company disclosed to shareholders one estimate of what regulatory compliance would cost on a per-ton of carbon emissions basis, while internally it used a different number — painting a false picture of its finances.
- Two former Exxon scientists told a congressional subcommittee last week that the company ignored evidence they turned up about climate change risks when they presented it decades ago.
- Massachusetts Attorney General Maura Healey filed a lawsuit against Exxon on Oct 24, accusing the company of deceiving consumers and misleading “investors about the risks to Exxon’s business posed by fossil fuel-driven climate change.”
- Exxon shares have slipped 3% this year while the S&P 500 has climbed 21%