ExxonMobil Sues California Over Climate Disclosure Laws

Strategic Insights -

California's new climate disclosure laws are coming under fire from one of the world's largest oil and gas corporations, ExxonMobil. The company claims that the laws, set to take effect next year, infringe upon its free speech rights by forcing it to take responsibility for climate change. ExxonMobil argues that the laws are flawed and would unfairly shame large companies like itself for being big, rather than being efficient. The corporation's lawsuit, filed in the U.S. Eastern District Court for California, seeks to prevent the laws from going into effect.

Key Takeaways:

  • ExxonMobil is suing the state of California over two climate disclosure laws, Senate Bill 253 and Senate Bill 261.
  • The company argues that the laws infringe upon its free speech rights by forcing it to take responsibility for climate change.
  • The laws require large businesses to disclose a wide range of planet-warming emissions, including direct and indirect emissions.
  • ExxonMobil takes issue with the methodology required by the state, which focuses on a company's emissions worldwide and therefore faults businesses just for being large as opposed to being efficient.
  • The company said in its complaint that the laws would require it to speculate "about unknowable future developments" and post such speculations on its website.
  • A spokesperson for the office of California Gov. Gavin Newsom called ExxonMobil's opposition to transparency "truly shocking."

Statistics:

  • $500 million: The annual revenue threshold for companies required to disclose financial risks that climate change poses to their businesses under Senate Bill 261.
  • Nationwide: The scope of the emissions reporting required by Senate Bill 253.

Sources:

  • ExxonMobil's complaint filed in the U.S. Eastern District Court for California.
  • Email statement from a spokesperson for the office of California Gov. Gavin Newsom.