- Office of Attorney General Maura Healey
Media Contact for AG Healey Amends Lawsuit Against Exxon Adding New Significant Facts about Company’s Continued Deception
BOSTON — Attorney General Maura Healey today filed an amended complaint against Exxon Mobil Corporation (Exxon), the world’s largest publicly traded oil and gas company, adding significant new factual allegations in her lawsuit against the company for misleading and deceiving Massachusetts consumers and investors.
The amended complaint, filed today in Suffolk Superior Court, highlights Exxon’s continued statements omitting, denying, and downplaying the risks that climate change poses to its business, as well as Exxon’s continued failure to disclose to investors the systemic financial risks from climate change. The COVID-19 pandemic has provided a real-time illustration of how shocks to the economy, including sudden drops in fossil fuel demand, have potentially dire consequences for companies like Exxon and their investors.
“The COVID-19 pandemic is giving us a sobering preview of the shocks to financial markets from climate change, and has exposed the massive risk posed to those invested in fossil fuel companies like Exxon by major events that cause global oil demand — and prices — to collapse,” AG Healey said. “Exxon knew about these risks decades ago but kept silent, instead making the calculated decision to mislead Massachusetts investors and consumers, hawking its fossil fuel products as good for the environment, and selling investors snake oil scenarios of ever-growing global demand for fossil fuels. Our amended lawsuit seeks to stop Exxon from engaging in deception and penalize them for this misconduct.”
For decades, Exxon has internally understood the risks that climate change poses to economic and geopolitical stability, including climate-driven human migrations, resource scarcity, wealth destruction, armed conflict, and escalating human suffering.
The amended complaint renews the original complaint’s allegations that Exxon has repeatedly violated the state’s consumer and investor protection law and related regulations. As alleged in AG Healey’s complaint, Exxon knew decades ago that increasing fossil fuel use was causing climate change that could be “catastrophic” for the world and that maintaining a safe climate would require “sharply curtailing the use of fossil fuels.” Rather than disclose these facts to consumers and investors, Exxon engaged in a decades-long campaign to deceive them about the climate-related impacts of its products that continues to this day.
As the amended complaint points out, new research has called attention to the potentially calamitous economic implications of the physical impacts of climate change like severe heat, especially in parts of the developing world on which Exxon is pinning its rosy projections of future fossil fuel demand. The complaint alleges that the ruinous costs of climate change on the global economy, which regulators and central banks are now predicting will cascade through the financial markets and impact home values, bank lending, and insurance, jeopardizing Exxon’s business around the world, and the Exxon holdings of its investors in Massachusetts.
This spring, Exxon was forced to curtail its capital spending plans and announced its first quarterly loss in more than 30 years. According to the amended complaint, the pandemic — like the oil price crash of 2014-2016 — exposed how Exxon’s business model is vulnerable to market shifts like those expected from climate change. Nevertheless, Exxon continues to mislead shareholders about the prospects of its future investments in polluting oil and gas projects around the world.
As the amended complaint’s new allegations also highlight, in recent months major investors like BlackRock have sounded the alarm regarding the dangers that climate change poses for the world’s financial markets and have specifically faulted Exxon for its failures to make sufficient disclosures of climate risk. And the amended complaint points out that other institutions, including some of the world’s most prominent universities, are divesting from fossil fuels, citing not only the moral imperative of addressing climate change but also the growing financial risks of keeping their money in fossil fuel companies like Exxon.
As to consumers, the complaint alleges that Exxon is misleadingly advertising that its gasoline and diesel products, sold under the name “Synergy,” and its so-called “green” Mobil 1 oil products reduce greenhouse gas emissions, despite the fact that development and use of these fossil fuel products pollute the air with those very emissions and cause dangerous climate change that imperils public health and the environment. The complaint also alleges that Exxon’s deceptive “greenwashing” campaign violates Massachusetts law by misleadingly presenting Exxon as a leader in cutting-edge clean energy research and climate action.
Exxon’s arguments in its fight against the AG’s investigation have been rejected by every court to decide them. In January 2017, the Massachusetts Superior Court ordered the company to comply with the AG’s investigation. The Massachusetts Supreme Judicial Court upheld the ruling in April 2018, and that same month, the Southern District of New York dismissed Exxon’s federal lawsuit. In January 2019, the U.S. Supreme Court denied Exxon’s request to hear its appeal of the Supreme Judicial Court ruling. In March 2020, the U.S. District Court for the District of Massachusetts rejected Exxon’s effort to remove the Commonwealth’s consumer protection lawsuit to federal court. The district court recently issued a decision discussing why Exxon’s removal of the case was not legally justified.
This matter is being handled by AG Healey’s Energy & Environment Bureau with assistance from her Office’s Insurance & Financial Services Division and Consumer Protection Division.