ExxonMobil sues California over climate disclosure laws

Key Points

• ExxonMobil is suing California over two climate disclosure laws, claiming they violate its free speech rights and unfairly blame large companies for climate change.
• The lawsuit filed in the U.S. Eastern District Court aims to prevent the new reporting requirements from taking effect next year.
• Under Senate Bill 253, businesses must report extensive emissions data, including indirect emissions, while Senate Bill 261 mandates disclosures about the financial risks of climate change to firms earning over $500 million annually.
• California officials responded, emphasizing that ExxonMobil's opposition to transparency is surprising given its status as one of the largest polluters.

Exxon Mobil Corporation is suing the state of California over a pair of 2023 climate disclosure laws that the company says infringe upon its free speech rights, namely by forcing it to embrace the message that large companies are uniquely to blame for climate change.

The oil and gas corporation based in Texas filed its complaint Friday in the U.S. Eastern District Court for California. It asks the court to prevent the laws from going into effect next year.

In its complaint, ExxonMobil says it has for years publicly disclosed its greenhouse gas emissions and climate-related business risks, but it fundamentally disagrees with the state’s new reporting requirements.

The company would have to use “frameworks that place disproportionate blame on large companies like ExxonMobil" for the purpose of shaming such companies, the complaint states.

Under Senate Bill 253, large businesses will have to disclose a wide range of planet-warming emissions, including both direct and indirect emissions such as the costs of employee business travel and product transport.

ExxonMobil takes issue with the methodology required by the state, which would focus on a company's emissions worldwide and therefore fault businesses just for being large as opposed to being efficient, the complaint states.

The second law, Senate Bill 261, requires companies making more than $500 million annually to disclose the financial risks that climate change poses to their businesses and how they plan to address them.

The company said in its complaint that the law would require it to speculate “about unknowable future developments” and post such speculations on its website.

A spokesperson for the office of California Gov. Gavin Newsom said in an email that it was “truly shocking that one of the biggest polluters on the planet would be opposed to transparency."