Exxon Mobil Sues California Over Climate Change Lawsuits

Strategic Insights -

The oil giant Exxon Mobil has filed a lawsuit in the United States District Court for the Eastern District of California, challenging two new state laws aimed at fighting climate change. The laws, passed in 2023 as part of the California Climate Accountability Package, require companies to calculate and report greenhouse gas emissions created by their products, as well as the business risks that climate change represents. Exxon Mobil argues that the laws violate its free speech rights, forcing the company to use flawed methodology to calculate these emissions and misrepresent the role that Exxon and its products play in warming the world.

Key Takeaways:

  • Exxon Mobil is suing California over two new state laws that aim to fight climate change, arguing that they violate the company's free speech rights.
  • The laws, passed in 2023, require companies to calculate and report greenhouse gas emissions created by their products, as well as the business risks that climate change represents.
  • Exxon Mobil argues that the laws would force the company to use flawed methodology to calculate these emissions and misrepresent the role that Exxon and its products play in warming the world.
  • The company claims that the laws would put disproportionate blame on large companies simply because of their size, and that the methodology used by California ignores the Greenhouse Gas Protocol developed by the World Resources Institute and the World Business Council for Sustainable Development.
  • Exxon Mobil also argues that the laws require companies to disclose climate-related risks that they face from activities beyond California's borders, which would be economically damaging.
  • The lawsuit names officials on the California Air Resources Board and the attorney general, Rob Bonta, as defendants.
  • The California Air Resources Board has not shown an appetite to delay putting the laws into effect, according to Michael Littenberg, a corporate partner at the law firm Ropes & Gray.
  • Exxon Mobil is headquartered in Texas, with operations in over 60 countries, and the company doesn't explore for, produce, manufacture, or transport crude oil or natural gas in California.

Statistics:

  • The laws would affect several thousand large companies in the state, including Exxon Mobil.
  • The laws would require companies to calculate and report greenhouse gas emissions created by their products, as well as the business risks that climate change represents.
  • Exxon Mobil is one of the largest polluters on the planet.
  • The Greenhouse Gas Protocol, developed by the World Resources Institute and the World Business Council for Sustainable Development, is used by over 250 companies.
  • The European Union is moving forward with new climate disclosure rules, including the Corporate Sustainability Due Diligence Directive.

Sources:

  • The New York Times, article, March [no date given].
  • Bloomberg, photograph, by David Paul Morris.
  • The Washington Legal Foundation.
  • Ceres, a business network that supports a transition to cleaner energy.
  • FarmSTAND, which opposes industrial animal agriculture.
  • The Securities and Exchange Commission.
  • Focal Point Strategy Group, a communications firm that works with climate and good-governance groups.