ExxonMobil Corp. lambasted New York Attorney General Eric Schneiderman after he made what Exxon calls, “inflammatory, reckless, and false allegations,” regarding the manner in which the company evaluates the impact of global warming on its assets and operations.

The NY AG’s stance is that ExxonMobil misled investigators in its use of proxy costs to estimate carbon impact.

ExxonMobil uses proxy costs to quantify the costs of greenhouse gas emissions and asserts that such costs approximate the range of potential future government actions regarding climate change.

The Attorney General’s office stated that, “Exxon’s documents reveal a widespread lack of awareness among employees of the proxy cost policy, or how it should be applied,” and specifically that the use of proxy costs “may be a sham,” and that the company may be using “secret internal versions of proxy costs,” which are not made known to the public and to investors.

The New York attorney general believes that Exxon published to its investors a proxy cost of $60 per ton of emitted greenhouse gases by 2030 and $80 per ton by 2040 but used lower values internally.

In its brief, Exxon stated that the attorney general provided no instance in which a proxy was not applied when it should have been. The attorney general cited the Generally Accepted Accounting Principles (GAAP) and regulations within the U.S. Securities and Exchange Commission that mandate the use of a single carbon pricing estimate when evaluating impairment or investigating reserves. It is Exxon’s position that such a provision does not exist in the GAAP or the SEC’s regulations.

Regarding its use of proxy costs, Exxon said, “ExxonMobil’s use of different metrics, in different circumstances, to accomplish different goals evinces prudent financial stewardship, applying appropriate assumptions in appropriate cases. There is nothing untoward or surprising about any of this.”

Exxon said it believes the investigation is politically motivated and was initiated on, “bad faith.”

The SEC reportedly began investigating ExxonMobil Corp in 2016.

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