Federal Counterpart to New York’s Investigation of Climate Change Disclosures by Fossil Fuel Companies

Following a similar letter from House members to the DOJ in October 2015, New York Attorney General Eric T. Schneiderman commenced an investigation of another industry member’s climate disclosures. Attorney General Schneiderman’s investigation focused on whether statements to investors (dating back to as early as 1970) were consistent with the company’s own scientific research and whether the company adequately disclosed the risks that climate change might pose to its business.

Shortly after the investigation began in New York, Inside Climate News and The Los Angeles Times started broad coverage of the evidence purporting to show that the company was aware of certain climate risks and used that information to guide its long-term planning, despite simultaneously funding groups skeptical of climate risks. In the beginning of 2016, California Attorney General Kamala Harris followed New York’s lead and commenced her own investigation of the other industry member’s public disclosures.

What can this heightened attention to the climate change disclosures of fossil fuel companies mean in the near future?

First, following New York and California, other states’ attorneys general may initiate similar investigations, which may, in turn, open a new avenue of legal attack against the fossil fuel industry.

Second, there is a possibility that investigations may expand to other companies involved in the fossil fuel industry. Attorney General Schneiderman recently investigated a large coal producer on similar climate change disclosure grounds.

Third, investigations on the federal level may follow. These investigations may focus on potential violations of securities laws, such as the Securities Act of 1933 and the Securities Exchange Act of 1934. Any publicly traded fossil fuel company must be aware of this increased attention to its climate change disclosures. Companies should carefully consider the text of their existing environmental disclosures and whether they fairly present the risks of climate change to the public.

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