Inquiry Ends Into Exxon Mobil’s Accounting Tied to Climate Change

Posted August 3, 2018 6:48 p.m. EDT

The Securities and Exchange Commission has ended an investigation into Exxon Mobil’s policy of not writing down the value of its oil reserves to account for the risk that future climate change regulations might pose to the company.

The commission informed Exxon of its decision in a letter Thursday, saying that it did not intend to pursue enforcement action against the company at this time.

The inquiry, which began in January 2016, focused on how Exxon calculated the potential costs of complying with regulations meant to limit greenhouse gas emissions. Such regulations could force fossil fuel companies to keep oil, natural gas and coal in the ground.

Scott Silvestri, an Exxon spokesman, said in a statement that the company had cooperated fully with the investigation, producing more than 4.2 million pages of documents. Silvestri reiterated the company’s position that its handling of the information at issue was appropriate.

“We are confident our financial reporting meets all legal and accounting requirements,” he said.

The commission declined to comment.

In August 2016, the commission requested documents and other information from Exxon and from its auditor, PwC.

It also received documents that Exxon submitted as part of an inquiry by state attorneys general, including New York’s, into the company’s internal research and other activities related to climate change. In March, a federal judge dismissed Exxon’s effort to block that investigation.

Exxon has argued that fossil fuels will be necessary to meet the energy needs of the world’s growing population in coming decades. The company contends that oil and gas prices rise and fall over time and that it makes long-term investment decisions. The company has also said it is making efforts to curb climate change by studying carbon-capture and sequestration technology and advanced biofuels made from algae.