An Exxon gas station in Albany, California.
(Bloomberg)– ExxonMobil Corp. has sued California, arguing that two new state laws violate the First Amendment by trying to force it to accept a certain climate viewpoint and conflict with federal regulations.
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The lawsuit, filed Friday, alleges that the two new laws, which seek to make large corporations more transparent about their climate emissions and financial exposure to climate risk, force ExxonMobil to publicly endorse views on climate change with which it disagrees.
One bill requires large companies doing business in California with more than $1 billion in annual revenue to measure and publicly disclose their greenhouse gas emissions each year. The other requires companies with more than $500 million in annual revenue to publish a biennial report that assesses how climate change could affect their financial performance and what steps they are taking to manage those risks.
These laws require companies to comply with the California Greenhouse Gas Protocol and the Task Force on Climate-Related Financial Disclosures, which ExxonMobil says requires them to take responsibility for global warming, amounting to government-mandated speech.
The energy giant says California claims large corporations are “most responsible” for climate change. Because these laws target only large companies, California is singling out those most likely to oppose climate policies, the lawsuit says.
The company says California is trying to regulate conduct and speech outside its borders, as much of the reporting concerns emissions and risks from global operations.
“ExxonMobil understands the very real risks associated with climate change and supports continued efforts to address those risks,” the document says. “California may believe that companies that meet the statute’s revenue thresholds are solely responsible for climate change; but the First Amendment categorically prohibits it from forcing ExxonMobil to speak out in favor of that mistaken view.”
The lawsuit says lawmakers sought to “shame” corporations into changing their behavior, which ExxonMobil calls an attempt to shame companies into compliance.
ExxonMobil maintains that SB 261 conflicts with federal securities laws, which already govern what publicly traded companies must disclose about financial and environmental risks. It holds that states cannot impose additional or inconsistent disclosure obligations on matters overseen by the U.S. Securities and Exchange Commission.