Members of Congress and prosecutors have been raising the question of whether energy companies misled the public and their investors about the risks of climate change.
Last month, House Democrats Ted Lieu (D-Calif.) and Mark DeSaulnier (D-Calif.) published an open letter to Attorney General Loretta Lynch calling for the Department of Justice to investigate accusations that Exxon Mobil engaged in a “massive campaign of denial and disinformation” to cover up evidence that fossil fuels are a leading cause of global warming.
The Department of Justice has yet to take any action. However, New York Attorney General Eric T. Schneiderman subpoenaed Exxon Mobil in early November to gain access to financial records, correspondence and other documents that could shed light on whether the energy company misled the public about the risks of climate change by investing in a campaign to undermine climate science for over a decade, while simultaneously conducting internal research showing the opposite impact. Exxon Mobil has yet to respond to the subpoena.
On Nov. 9, just a few days after the story of the Exxon Mobil investigation broke, the New York State Attorney General’s Office and Peabody Energy, the world’s largest private coal company, finally resolved an eight–year-old investigation over allegations that Peabody had not properly disclosed the financial risks posed by climate change. Unlike the Exxon Mobil investigation, which appears to focus more on whether the public was misled, the Peabody case dealt more with whether shareholders were hurt by the company not including the risks of global warming in federal securities filings.
The Peabody settlement required changes to be made in the language of the company’s security filings. To the disappointment of those hoping for a stronger deterrent for energy companies trying to downplay the risk of climate change, no penalties or admissions of liability were made.
With the Peabody settlement failing to prove as impactful as some had hoped, the Exxon Mobil investigation may prove a more promising avenue for those hoping to see government prosecutors take a strong stance on protecting the public from the risks of climate change.
Lieu and DeSaulnier’s letter to the Department of Justice drew comparisons of Exxon Mobil’s conduct to the tactics that big tobacco companies used in order to stifle and delay research showing the health effects of smoking. It remains unclear how the public would be compensated were Exxon Mobil found to have defrauded the public about the risks of climate change, or whether the result would simply be changes to required disclosures, as in the Peabody settlement