ExxonMobil, accused of misleading investors about the risk from climate change regulations, has started to face a trial in New York on Tuesday.
The lawsuit against the world's biggest publicly-traded energy company was filed in October 2018 by former Attorney General of the State of New York, Barbara D. Underwood, who argued that ExxonMobil misled investors about the risks that posed to its business through climate change.
She alleged that the energy giant has been running a 'longstanding fraudulent scheme ... to deceive investors and the investment community,' according to the filing against ExxonMobil.
'As a result of Exxon’s fraud, the company was exposed to far greater risk from climate change regulations than investors were led to believe,' she added in the filing.
'As early as 2009, investors specifically asked Exxon how it incorporated a carbon price into its investment decisions,' the filing said, adding '[of] 30 U.S. companies that use a shadow carbon price, Exxon’s is among the most aggressive.'
Former U.S. Secretary of State Rex Tillerson, who was the CEO of ExxonMobil between 2006 and 2016, is also expected to appear in court during the lawsuit that is estimated to last two weeks.
This is not the first time an energy company faces a lawsuit, but it is different from its predecessors since the allegations are about investor fraud.
A U.S. federal judge dismissed a lawsuit in July 2018 that was brought by New York City against five major oil companies in early January that year, which tried to hold those firms accountable for their role in climate change.
In the case that was brought against BP, Chevron, ConocoPhillips, Exxon Mobil and Royal Dutch Shell, New York City was seeking billions of dollars in damages claiming that the oil majors contribute to climate change.
John F. Keenan, U.S. district court judge for the Southern District of New York, however, dismissed the case by stating that the legislative and executive branches, rather than the judiciary should determine the issue.
By Ovunc Kutlu