ExxonMobil is suing California over state laws that force large companies to share a more complete picture of greenhouse gas emissions, as well as disclose the financial risks that climate change could pose to their investors.
The oil and gas company claims that the two laws in question The goal is to embarrass large corporations, which the government says are “solely responsible for climate change,” to push them to reduce greenhouse gas emissions. Eat overwhelming scientific consensus that greenhouse gas emissions from fossil fuels cause climate change by trapping heat in the planet.
ExxonMobil argues that California is violating the First Amendment by setting specific standards for how certain companies report those emissions and their associated climate risks. Under laws passed by the state in 2023, “ExxonMobil will be forced to describe its emissions and climate-related risks in terms with which the company fundamentally disagrees,” the complaint states. filed Friday says. The lawsuit asks the U.S. District Court to block enforcement of the laws.
It's the latest in an ongoing saga about how transparent companies should be about their climate impact.
It's the latest in an ongoing saga about how transparent companies should be about their climate impact. California has set higher standards than many companies follow in their sustainability reports. That, coupled with the state's huge economy, has allowed it to raise the bar on corporate climate disclosure, even as The federal government is moving in the opposite direction. ExxonMobil's accusations that the government is forcing corporations to adopt its views on climate change also follow a flurry of accusations that ExxonMobil misled consumers about the impact of its products on the environment.
One of the laws under which ExxonMobil is suing, SB 253, would require companies doing business in California with more than $1 billion in annual revenue to disclose their emissions according to internationally accepted standards set in Greenhouse Gas Protocol. The company already publicly shares data on its greenhouse gas emissions, but says it does not agree with the Greenhouse Gas Protocol's practices. Much of the fight is being waged over claims to include emissions in a company's supply chain, electricity use and consumer use of its products. “indirect” emissions. These indirect emissions often amount to most of the company's carbon footprintand SB 253 would require full disclosure by 2027.
However, ExxonMobil's lawsuit argues that including indirect emissions results in double counting. For example, it would require companies to report tailpipe emissions from cars and trucks that burn fuel, while owners of those vehicles could also report those emissions on their reports.
Another contested law, SB 261, would require companies earning more than $500 million in annual revenue to disclose the financial risks they face as a result of climate change, such as how coastal flooding or more extreme weather conditions could impact their business by January 2026. The suit calls such disclosures “speculative,” requiring “the company to make detailed assumptions about unknowable future events.”
Under the Biden administration, the SEC has proposed similar rules at the federal level. ends up weakened after encountering resistance from industry over requirements to disclose indirect emissions. This year SEC under the Trump administration announced What is this will no longer defend these rules in court.
In addition, ExxonMobil is involved in other approach California filed against him last year regarding plastic pollution. The lawsuit alleges that the company “deceived Californians for nearly half a century by promising that recycling could and would solve the ever-growing plastic waste crisis.” Plastics are made from fossil fuels and difficult to recycle; less than 10 percent of plastic waste is ever recycled. ExxonMobil subsequently filed a lawsuit slander lawsuit against California's attorney general in January over controversial recycling claims.
California filed another one approach in 2023 against several oil and gas companies, including Exxon, alleging that their “deceptive and harmful conduct was a significant factor in the devastating effects of climate change in California,” including more extreme heat, droughts and wildfires. Over the past decade, a number investigations at ExxonMobiland also peer-reviewed studiesshowed how the company's own scientists accurately predicted climate change while publicly ignoring the problem.
ExxonMobil's latest lawsuit now says the company “understands the very real risks associated with climate change and supports ongoing efforts to address those risks,” but California laws will force it to “describe its climate-related emissions and risks in terms with which the company fundamentally disagrees.”
“These laws are about transparency. ExxonMobil may want to continue to keep the public in the dark, but we are prepared to vigorously litigate in court to ensure the public has access to these important facts,” said Christine Lee, a spokeswoman for the California Department of Justice, in an email to Edge. State regulators named as defendants in the lawsuit declined to comment on the litigation.
