Lawsuit challenges new climate disclosure laws in California

ExxonMobil opposes state's alleged 'policy of stigmatisation'.

Texas-headquartered Exxon Mobil Corporation (ExxonMobil) is seeking to block the implementation of California's new climate disclosure laws. Passed in 2023, Senate Bills 253 and 261 are set to take effect in 2026.

Through proceedings initiated by ExxonMobil in the US District Court for the Eastern District of California, the oil & gas company will argue that the laws are a violation of its First Amendment rights.

According to a Reuters report, ExxonMobil considers California's new frameworks not only counter-productive but misleading as well.

In its court filing, ExxonMobil stated: "The First Amendment bars California from pursuing a policy of stigmatisation by forcing ExxonMobil to describe its non-California business activities using the State's preferred framing."

Under the new requirements, ExxonMobil will have to disclose not only its own carbon emissions but also indirect ones from its supply chain and purchased energy. Reporting will also have to include the climate-related financial risks being faced by the business.

The Associated Press cited ExxonMobil's issue with the new frameworks, which the global organisation believes place "disproportionate blame" on large companies. ExxonMobil does disclose its emissions and risks, but it does not agree with the methodology that California is slated to roll out.

In 2024, a similar lawsuit was filed against the state by business groups such as the US Chamber of Commerce.