ExxonMobil’s leadership tried to understand how new climate regulations would impact the supermajor’s bottom line, former CEO and ex-Secretary of State Rex Tillerson told a court Wednesday, Kallanish Energy reports.
Tillerson was called to testify in a securities fraud lawsuit brought by New York State Attorney General’s office. Democrat Letitia James’ office says the Irving-based company deceived investors about its future profitability. ExxonMobil (XOM) says it did nothing wrong and is an industry leader in gauging potential climate costs, The Associated Press reported.
The lawsuit claims ExxonMobil basically kept two sets of books — telling the public it was taking into account the costs of potential future climate regulations, while lowballing those costs behind the scenes as it made investment decisions and assessed the value of its oil and gas reserves, the AP reported.
The attorney general’s office argues the discrepancy misled investors about the company’s exposure to climate costs.
The trial, which started last week, seeks $476 million to $1.6 billion in damages for shareholders.
Tillerson said ExxonMobil took climate change seriously. “We knew it was a real issue,” he testified Wednesday, the AP reported.
During his roughly 10-year tenure as CEO, the company supported the concept of a carbon tax, backed the international Paris agreement on combating climate change and in 2007, created a system that tries to predict how regulations worldwide might reduce demand for oil and gas, he noted.
“We tried to understand how this was going to affect everything,” he said. He said the company had two sets of climate-risk calculations — one for the broad-level “proxy costs,” another for “greenhouse gas costs” to figure how local regulations might affect specific projects — in order to get the “best assessment.”
Asked why carbon costs were figured differently in the two metrics, he said “they were for different uses within the organization.”
The Texas oilman left a career at ExxonMobil to serve as President Trump’s first secretary of state, from February 2017 until Trump fired him by tweet a little over a year later.
The two had been at odds over various issues, including global warming. Tillerson had opposed Trump’s plan to pull out of the Paris accord.
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