Former Exxon Mobil CEO Rex Tillerson defended his record leading the corporation when he took the witness stand on Wednesday after the New York attorney general accused the corporation of misleading shareholders about the costs of climate change regulations.
The Attorney General's Office says the oil and gas behemoth didn't share one of its calculations of the future costs of the rules, causing shareholders to overvalue the company's stock by $476 million to $1.6 billion, The Wall Street Journal reported. The trial began last week.
|XOM||EXXON MOBIL CORP.||59.32||+1.69||+2.93%|
Exxon Mobil, however, told FOX Business that it met its responsibility to shareholders and argued that the case is politically motivated.
Tillerson, who left the post for a stint as President Trump's secretary of state, served as Exxon Mobil CEO from 2006 until the end of 2016. The trial began last week with Tillerson expected to testify at some point.
He answered the state's questions Wednesday morning and said part of his job was assessing the risks of climate change and to communicate that to the board and interested parties. He said there were two climate change-related reports that he approved that were published online so both shareholders and the public could access.
He could not recall playing a role in drafting documents that the state's lawyers asked him about and said there were major demands on his time so he only reviewed things the organization deemed important.
Tillerson spoke about how the report in question looked to the future and was for long-term planning regarding the energy industry and regulations decades from now.
"In the absence of a uniform, globally accepted cost of carbon, ExxonMobil uses two distinct metrics to account for the impact of current and potential climate-related regulations," a company spokesperson told FOX Business last week. "The first is a 'proxy cost,' which is intended to reflect the impact of all climate policies that could reduce demand for oil and natural gas globally. The other, a greenhouse gas cost or 'GHG cost,' reflects actual costs that might be imposed directly on the emissions of oil and gas projects as a result of specific laws in a jurisdiction."
The state's case hangs on the Martin Act, a New York law that has been used to crack down on misleading information provided to shareholders. Passed in 1921, the law doesn't require the state to prove fraudulent intent by the corporation or that any investor was actually misled.
The case may be a boon for prosecutors, the Wall Street Journal's editorial board wrote Monday.
"We doubt [New York Attorney General Letitia] James cares all that much if she wins," the editors wrote. "If she loses at trial, she'll appeal to higher state courts to keep the publicity alive."