Exxon Mobil Corp. is out of the Securities and Exchange Commission’s doghouse for now, as the regulator ended its two-year accounting investigation into how the company calculates the value of its assets, as well as possible oily investor disclosures about climate change.
According to a Bloomberg News report, Exxon Mobil received a letter from the SEC on Aug. 2 that said it would take no enforcement action against the company. In an email to Bloomberg, Exxon spokesman Scott Silvestri said, “We are confident our financial reporting meets all legal and accounting requirements.”
The probe, which began in 2016, examined “whether Exxon has for decades failed to alert investors about potential climate-change risks for a company with annual sales that could rival the world’s top 50 national economies,” Bloomberg News wrote.
The SEC also looked at why Exxon Mobil hadn’t written down the value of its oil and gas reserves since the price of oil started dropping. A Sept. 20, 2016, Wall Street Journal article said the probe may have signaled the start of a “new front of climate-related regulation and enforcement at the SEC.”
At the time, Caleb gave props to the SEC for lumping investigations into accounting and climate change together:
If the SEC were just looking into costs related to climate change, Exxon supporters would be screaming bloody murder. But when you’re asking questions about why a company hasn’t suffered any impairment while its peers have been getting crushed, you can’t really be too upset about it. Their concerns seem pretty legitimate! And the CEO explanation of, “We don’t do write-downs,” and, “We hold people accountable,” doesn’t really explain anything! So the SEC wants to look at the details…and figured as long as they were doing that, they’d take a look at the climate change stuff too. It’ll save them a trip.
In its letter to Exxon Mobil, the SEC said the decision “shouldn’t be seen as an exoneration” and “the probe could be reopened later,” according to Bloomberg News.
While the SEC has dropped its investigation for now, the attorneys general in New York and Massachusetts have not. Both states are still hot on the trail of Exxon Mobil—and whether its public statements about climate change misled investors.
Exxon Mobil tried to block the states’ investigations in court, saying they were politically motivated, but a federal judge dismissed the lawsuit in March 2018, saying, “Exxon’s allegations that the AGs are pursing bad faith investigations in order to violate Exxon’s constitutional rights are implausible,” according to the New York Times.
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