Exxon Faces Consequences for Climate Denial

Refinery with Exxon logo

ExxonMobil, the $78 billion fossil fuel giant, has been lying to its shareholders about the threats of climate change, according to New York Attorney General, Barbara Underwood, following a multi-year investigation.

The New York state lawsuit, filed Wednesday, accuses Exxon of a "longstanding fraudulent scheme" to mislead investors on "the company's management of the risks posed to its business by climate change regulation," according to The New York Times. Citing messaging to the public that was inconsistent with internal practices, Underwood brought the lawsuit under the Martin Act, which empowers her to investigate and prosecute securities fraud.

The Center for Media and Democracy (CMD) has reported on Exxon's illegal and unethical efforts to undermine climate science and hide the global impact of its operations for years.

In 2016, the Center for Media and Democracy (CMD) and Common Cause complained to the IRS that Exxon was running an illegal scheme to use the American Legislative Exchange Commission (ALEC) to promote its climate denial policies and legislative agenda "in gross violation of ALEC's 501(c)(3) charitable status."

The Industry Plan to Sow Doubt over Climate Science

Evidence presented in the joint CMD/Common Cause IRS filing showed that Exxon had pumped more that $1.7 million into ALEC between 1998 and 2014 to finance lobbying activities that cast doubt on climate science and promoted public policies benefiting the corporation.

The Exxon/ALEC scheme arose from a 1998 "Global Climate Science Communications Action Plan," authored by the American Petroleum Institute (API). The stated mission of the API plan was to "inform the American public that science does not support the precipitous actions Kyoto [International Climate Treaty] would dictate, thereby providing a climate for the right policy decisions to be made." [emphasis added]

Exxon was listed as a source of funding for the plan, while ALEC was listed as a "potential fund allocator." Public records show that Exxon's funding of ALEC subsequently increased.

Exxon's more recent efforts to rehabilitate its public image around climate change led the oil giant to split with ALEC in July 2018, reportedly over ALEC's opposition to the EPA's findings on greenhouse gases.

Collusion Between Republican AGs and Industry Lobbyists

In 2016, CMD exposed secret, closed-door meetings between state attorneys general and fossil fuel interests to coordinate push-back against New York's investigation of Exxon.

CMD published an audio recording of a meeting where representatives of the Competitive Enterprise Institute (CEI) and the American Fuel & Petrochemical Manufacturers (AFPM) -- organizations historically funded in part by Exxon -- discussed strategies with Republican attorneys general.

The Republican Attorneys General Association (RAGA) facilitated the private sessions, a premium service that the pay-to-play organization provides to corporations that pay RAGA up to $125,000 per year.

"These documents reveal a serious conflict of interest: RAGA is facilitating secret meetings between the profit-motivated fossil fuel industry and attorneys general to engineer pushback on investigations of ExxonMobil -- and then raising money from oil and gas companies to keep those same Republican attorneys general in office," said Nick Surgey, CMD's Research Director at the time.

History of Misinformation Campaigns

Numerous investigations have shown that Exxon was fully aware of the risks of climate change from burning fossil fuels as early as the 1970s, despite funding multiple groups like ALEC that denied climate science and humans' contribution to climate change.

A Harvard University study of Exxon's communications between 1977 and 2014 found that "ExxonMobil misled the public about climate change," even as its private and academic research acknowledged serious climate risks.

In 2015, the year New York launched its investigation of Exxon, Inside Climate News reported that Exxon had been aware of climate change but "put its muscle behind efforts to manufacture doubt about the reality of global warming." Exxon warned top executives of possible climate catastrophe, but then "led efforts to block solutions." The Los Angeles Times also published an article that year telling a similar story. Exxon dismissed those reports as "cherry picked."

According to the New York Times, this most recent lawsuit "poses a financial risk to Exxon, as well as a potential reputational blow."

If history is any indication, Exxon could face significant damages. Similar litigation against tobacco companies found in 2006 that the industry had engaged in "a massive 50-year scheme to defraud the public," and resulted in a $246 billion settlement.

Scott Zimmerman

Scott is an intern at the Center for Media and Democracy.