Business

Rex Tillerson denies misleading investors while Exxon CEO in climate change fraud trial

Former Exxon Mobil Corp Chief Executive Rex Tillerson took the witness stand in Manhattan state court on Wednesday to testify in a closely watched civil lawsuit accusing the company of hiding the true cost of climate change from investors.

Tillerson led company for over a decade before brief, conflict-ridden tenure with Trump

Former Exxon Mobil CEO and former U.S. Secretary of State Rex Tillerson arrives at New York State Supreme Court as an Exxon witness to testify as part of a trial in a lawsuit by New York's attorney general accusing the oil company of misleading investors. (Mike Segar/Reuters)

Former Exxon Mobil Corp Chief Executive Officer Rex Tillerson on Wednesday denied misleading investors about how the oil major measured potential costs of climate change, as he testified in a closely watched civil lawsuit brought by New York's attorney general.

The case, which kicked off last week, is the first of several lawsuits pending against major oil companies related to climate change to go to trial.

Brought by New York's attorney general, the lawsuit alleges that Exxon falsely told investors it had properly evaluated the impact of future climate regulations on its business using a proxy cost of up to $80 per ton of carbon emissions in wealthy countries by 2040, but internally used figures as low as $40 per ton or none at all.

It says Exxon caused investors to lose up to $1.6 billion.

Exxon has assailed the claims as false and politically motivated.

Under questioning from Kim Berger, a lawyer for the state, Tillerson testified that the proxy cost represented a "macro level" assessment of the likely effect of future carbon regulations around the world on total demand for fossil fuels, and was incorporated into a data guide used throughout Exxon.

"What we're really trying to do is be the most realistic, present our best view of how this is going to turn out," he said.

Tillerson went on to offer a more full-throated defense of the company when he was questioned by its lawyer, Theodore Wells, saying all the allegations in the case were false.

He said Exxon would never have any incentive to lowball greenhouse gas costs internally.

"We'd be misinforming ourselves," he said.

Tillerson served as Exxon CEO until 2017, and then was tapped as U.S. secretary of state under President Donald Trump. The foray into politics lasted just over a year, with the president complaining bitterly about Tillerson and the longtime oil executive later questioning Trump's preparedness for the role.

Wells said in his opening statement that after Wells became CEO the company put in place a "robust system" to manage the risk of increasing climate change.

Last Thursday, just two days after the New York trial began, Massachusetts filed a similar lawsuit accusing Exxon of misleading investors and consumers for decades about the role fossil fuels play in climate change.

Both Massachusetts and New York began investigating Exxon after news reports in 2015 saying its own scientists had determined that fossil fuel combustion must be reduced to mitigate the impact of climate change.

Those reports, by InsideClimate News and the Los Angeles Times, were based on documents from the 1970s and 1980s. Exxon said the documents were not inconsistent with its public positions.

Exxon and other oil companies including BP Plc, Chevron Corp and Royal Dutch Shell Plc face lawsuits by cities and counties across the United States seeking funds to pay for seawalls and other infrastructure to guard against rising sea levels brought on by climate change.

The companies have said in court filings that they cannot be held liable for climate change.

With files from CBC News

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