Exxon didn't mislead investors in climate-change lawsuit, judge rules

A judge on Tuesday ruled in favor of ExxonMobil Corp. in a case that accused the company of misleading investors about climate-change regulations.

New York state's attorney general launched an investigation into Exxon in 2015 and sued the company last year, claiming it used two sets of numbers when calculating the cost of climate change regulations on its operations. This accounting misled investors and made the company's decisions to invest in certain carbon-intensive projects appear more profitable or less costly than they otherwise would have, the New York state AG alleged.

The court disagreed, however. Judge Barry Ostrager wrote in his decision that New York "failed to prove that ExxonMobil made any material misstatements or omissions about its practices and procedures that misled any reasonable investor."

He added that the judgment does not clear the company of contributing to climate change, however.

"Nothing in this opinion is intended to absolve ExxonMobil from responsibility for contributing to climate change through the emission of greenhouse gases in the production of its fossil fuel products," Ostrager wrote. "But ExxonMobil is in the business of producing energy, and this is a securities fraud case, not a climate-change case.

Exxon hailed the ruling, calling the initial investigation "baseless."

"We provided our investors with accurate information on the risks of climate change," the company said in a statement to the Associated Press. "Lawsuits that waste millions of dollars of taxpayer money do nothing to advance meaningful actions that reduce the risks of climate change."

But New York Attorney General Letitia James said the case "laid out how Exxon made materially false, misleading and confusing representations to the American people about the company's response to climate change regulations."

"The oil giant never took seriously the severe economic impact that climate change regulations would have on the company, contrary to what they were telling the public," the Democrat said in a statement.

The suit sought an estimated $476 million to $1.6 billion in restitution to shareholders, and was seen as something of a bellwether for how investors view energy companies' prospects in light of global warming and the new regulations that climate change is expected to spur.

The burning of fossil fuels for electricity, transportation and heat is the main source of manmade heat-trapping carbon emissions. Scientists have warned that the world must cut those emissions to stave off the worst effects of warming.

The judge noted there was no testimony from any actual investors who claimed to have been deceived. He credited the company with "a culture of disciplined analysis, planning, accounting and reporting" and called the lawsuit "hyperbolic."

Exxon still faces a number of lawsuits over its contribution to climate change from cities, investors and the state of Massachusetts.