Exxon Mobil accused of manipulating data on the impact of the company on the environment to deceive investors
New York State Attorney General accused one of the world's richest companies, Exxon Mobil, of manipulating data on the company's environmental impact. According to the prosecution, it took Exxon Mobil to deceive investors - the company did not want to lose money, telling the whole truth about the damage its activities cause to nature, respectively, and how much it would have to pay to compensate for the damage.
Investors, in fact, would be afraid in this case not of the harm to the environment itself, but of the penalties imposed by regulators related to the tightening of international legislation on the protection of nature. It is worth noting that the investigation did not begin suddenly, the Exxon Mobil case has been considered since November 2015. Then the company was requested financial statements and internal documents, including correspondence relevant to the case.
As it turned out, the company told investors that everything was “under control”, the company was coping with regulatory measures aimed at reducing the environmental impact. All this made Exxon Mobil more attractive in the eyes of partners in terms of investments.
One of the tricks applied by Exxon Mobil is the statement that the company's financial calculations include the cost of paying carbon tax for various countries where the company operates, both current and potential.
“The information provided on the amount of expenses for compensation for environmental damage was intentionally false. This is especially relevant with regard to emissions of gases, which are considered to be the most important factors in the issue of global warming, ”the prosecutor said in a statement.
The document mentions the name of the ex-head of Exxon Mobil Rex Stillerton, who, according to the prosecutor, knew very well that “payments for harm to nature” are not taken into account in the documentation provided by investors. At one point, he warned other managers about the situation. After the audit was conducted, it turned out that the need to take into account new requirements for environmental protection and the tightening of requirements in this direction lead to a strong deterioration in the financial performance of Exxon Mobil.
The lawsuit also states that the company provided investors with deliberately false results of an “environmental issue” study. This is done in order to convince partners that there is no possibility of losing large sums of money. An example is some of the company's assets, including explored deposits of combustible minerals. They are accounted for as assets, but if the requirements for environmental protection are tightened, they will not be used.
The company indicated that the results of its analysis were supported by well-known scientists and officials, but in fact this was not at all the case.
Officials are not the only ones who have noticed the distortion of facts and the manipulation of investor opinion by Exxon Mobile. In August 2017, a group of Harvard scientists studied 187 documents from the internal document circulation that got into the network thanks to the persistence of journalists. It was already then that the company was misleading everyone about their own activities and the impact on the environment.
What consequences Exxon Mobil expects is not yet clear.