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Former Exxon chief Rex Tillerson testifies in climate change fraud trial

Credit: REUTERS/KEVIN LAMARQUE

Former Exxon Mobil Corp Chief Executive Rex Tillerson took the witness stand in Manhattan state court on Wednesday to testify in a closely watched civil lawsuit accusing the company of hiding the true cost of climate change from investors.

By Brendan Pierson

NEW YORK, Oct 30 (Reuters) - Former Exxon Mobil Corp XOM.N Chief Executive Rex Tillerson took the witness stand in Manhattan state court on Wednesday to testify in a closely watched civil lawsuit accusing the company of hiding the true cost of climate change from investors.

The case, which kicked off last week, is the first of several lawsuits pending against major oil companies related to climate change to go to trial.

The lawsuit, brought by New York's attorney general, alleges that Exxon falsely told investors it had properly evaluated the impact of future climate regulations on its business using a “proxy cost” of up to $80 per ton of carbon emissions, but internally used figures as low as $40 per ton or none at all.

It says Exxon caused investors to lose up to $1.6 billion.

Exxon has assailed the claims as false and politically motivated.

In his opening statement, Theodore Wells, a lawyer for the company, said that after Tillerson became CEO in 2006, the company put in place a “robust system” to manage the risk of increasing climate change. Tillerson served as Exxon CEO from 2006 to 2017, and U.S. secretary of state under President Donald Trump from 2017 to 2018.

Wells said the $80 per ton proxy cost represented a "global," "macro-level" assessment of the cost, while lower figures, known as greenhouse gas or GHG costs, were used for particular capital projects depending on circumstances. He said Exxon never told investors the two numbers were the same.

Last Thursday, just two days after the New York trial began, Massachusetts filed a similar lawsuit accusing Exxon of misleading investors and consumers for decades about the role fossil fuels play in climate change.

Both Massachusetts and New York began investigating Exxon after news reports in 2015 saying its own scientists had determined that fossil fuel combustion must be reduced to mitigate the impact of climate change.

Those reports, by InsideClimate News and the Los Angeles Times, were based on documents from the 1970s and 1980s. Exxon said the documents were not inconsistent with its public positions.

Exxon and other oil companies including BP Plc BP.L, Chevron Corp CVX.N and Royal Dutch Shell Plc RDSa.L face lawsuits by cities and counties across the United States seeking funds to pay for seawalls and other infrastructure to guard against rising sea levels brought on by climate change.

The companies have said in court filings that they cannot be held liable for climate change.

(Reporting by Brendan Pierson in New York; Editing by Noeleen Walder, Peter Cooney and David Gregorio)

((Brendan.Pierson@thomsonreuters.com; 646-223-6017 (desk); 646-306-0235 (cell);))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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