Climate Change Disclosure Litigation Is Real And Could Significantly Impact Issuers, Acquirers, Underwriters And Lenders

Late last week, the New York Attorney General ("NYAG") filed a law suit in the Supreme Court of the State of New York¹ against Exxon Mobil Corporation ("Exxon") alleging that Exxon violated, among other things, the securities fraud provisions of a 1921 New York statute called the Martin Act² in connection with Exxon's public disclosures of the future costs of complying with climate change regulation, as well as the potential for impairment of certain of the company's existing carbon-intensive energy assets. The lawsuit does not specify any quantum of damages, but makes a claim for "all appropriate monetary relief".

In the law suit, the NYAG has alleged that Exxon misrepresented to its investors and the public the risks that were posed by climate change by failing to use its publically disclosed estimates of climate change costs, instead using different (and lower) internal estimates, when evaluating the risks of its business projects. The NYAG has asserted this dual