Press Release  AG Healey Sues Exxon for Deceiving Massachusetts Consumers and Investors

Boston — Massachusetts Attorney General Maura Healey today sued Exxon Mobil Corporation (Exxon), the world’s largest publicly traded oil and gas company, for deceptive advertising to Massachusetts consumers and for misleading Massachusetts investors about the risks to Exxon’s business posed by fossil fuel-driven climate change—including systemic financial risk.

The complaint, filed today in Suffolk Superior Court, alleges that Exxon has repeatedly violated the state’s consumer and investor protection law and related regulations.  Specifically, the complaint alleges that Exxon systematically and intentionally has misled Massachusetts investors about material climate-driven risks to its business and has deceived consumers about the central role its fossil fuel products play in causing climate change. The complaint alleges that Exxon’s violations have taken the form of both significant factual misstatements and the failure to make disclosures to investors and consumers that would have been material to decisions by Massachusetts investors to purchase, sell, retain, and price ExxonMobil securities and by Massachusetts consumers to purchase ExxonMobil oil and gasoline products.

“Exxon has known for decades about the catastrophic climate impacts of burning fossil fuels—its chief product,” said AG Healey. “Yet, to this day, Exxon continues to deceive Massachusetts consumers and investors about the dangerous climate harms caused by its oil and gasoline products and the significant risks of climate change—and efforts to address it—to Exxon’s business. We are suing to stop this illegal deception and penalize the company for its misconduct.”

As early as 1982, Exxon predicted the exact amount of carbon dioxide (CO₂) that would be in the atmosphere in 2019—415 parts per million, the highest level in human history, as a result, largely, of increasing fossil fuel use. Exxon also recognized decades ago that reducing emissions and maintaining a safe climate would require “sharply curtailing the use of fossil fuels.” One of the company’s own scientists described the consequences of climate change as “catastrophic.” However, rather than disclosing what it knew about the future impact of its oil and gasoline products on communities and the environment, the complaint alleges that Exxon engaged in a decades-long campaign to deceive consumers and investors about the climate-related impacts of its products that continues to this day.

The complaint alleges that Exxon has hidden from investors its own knowledge of the systemic financial risk of climate change to the global economy and to Exxon’s fossil fuel business. Citing internal Exxon documents, the complaint alleges that in 1980, an expert retained by Exxon presented findings to Exxon that the projected rise in global temperatures caused by burning fossil fuels would have “major economic consequences,” even “bring[ing] world economic growth to a halt.” The complaint alleges that such systemic impacts to the global economy, which regulators and central banks are now predicting will impact home values, bank lending, and insurance, will have a significant effect on Exxon’s business around the world, and its shareholders in Massachusetts. Although major global companies are now disclosing $1 trillion dollars in climate-related costs, the complaint alleges that Exxon has failed to disclose any such estimates to investors, in violation of Massachusetts law.

The complaint also alleges that, since 2007, the company has illegally misrepresented to its investors that it has factored in to its financial planning and investment decisions the cost of complying with carbon regulations, the so-called “proxy cost of carbon,” when internal documents show that it has not done so. This deception misled Massachusetts investors by inflating the value of the company’s portfolio of oil and gas projects around the world, including its high-cost and heavily polluting oil sands assets in western Canada.

According to the complaint, the company is also engaging in an ongoing campaign to deceive Massachusetts consumers, including the drivers who use the nearly 300 Exxon-branded gas stations in Massachusetts, by making misleading statements in its advertising that its gasoline and diesel products, sold under the name “Synergy,” and its so-called “green” Mobil 1 oil products reduce greenhouse gas emissions. The company claims these products “reduce energy use and CO2 emissions,” and enhance “environmental performance.” In fact, development and use of these fossil fuel products emit large volumes of greenhouse gases, which are causing global average temperatures to rise and destabilizing the global climate system. The complaint alleges that it is deceptive for Exxon to market fossil fuel products as a climate solution.

The AG’s Office is further alleging that the company violates Massachusetts law through a deceptive “greenwashing” marketing campaign that misleadingly presents Exxon as a leader in cutting-edge clean energy research and climate action. The complaint alleges that Exxon’s advertisements and related marketing target consumers with deceptive messaging about Exxon as a good environmental steward and of its products as “green” while the company is massively ramping up fossil fuel production and spending only about one-half of 1% of revenues on developing clean energy. 

The AG’s Office alleges that the company’s misleading statements to consumers and investors about its fossil fuel products and its failure to disclose that the products themselves are disrupting the climate “are particularly deceptive given the stark contrast between the company’s long internal knowledge of the role its fossil fuel products play in causing climate change and the extensive marketing statements in which the company promotes the purported environmental benefits of those same products.” Exxon’s unlawful conduct, the complaint alleges, contributed to decades of delay in market recognition of the climate dangers of fossil fuel products and the urgent need to reduce greenhouse gas emissions.

AG Healey first served the company with a civil investigative demand in April 2016, after the release of several detailed national news stories outlining the company’s decades-long pattern of deception regarding its knowledge about the impact of burning fossil fuels on the climate and the impacts of climate change on its own business. Rather than comply with the investigation, the company sued the AG’s Office in Massachusetts state court and federal court. 

Exxon’s attacks on the AG’s Office and its investigation have been rejected by every court to decide them. In January 2017, the Massachusetts Superior Court ordered the company to comply with the AG’s investigation. The Massachusetts Supreme Judicial Court upheld the ruling in April 2018, and that same month, the Southern District of New York dismissed Exxon’s federal lawsuit. In January, the U.S. Supreme Court denied Exxon’s request to hear its appeal of the Supreme Judicial Court ruling. While Exxon’s litigation against AG Healey’s Office has been pending, AG Healey has continued her investigation of the company’s deceptive practices.

By filing the lawsuit, AG Healey is asking the Court to find that the company is violating the state’s Consumer Protection Act and order the company to pay civil penalties to the state, perform comprehensive injunctive relief, and pay the AG’s Office’s reasonable attorney and investigation fees.

This matter is being handled by AG Healey’s Energy & Environment Bureau with assistance from her Office’s Insurance & Financial Services Division and Consumer Protection Division.

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