Above Photo: Jeff J Mitchell/Getty Images
Congressmen who have asked the Securities and Exchange Commission to investigate Exxon now request a similar probe of Shell.
Three members of Congress have asked the Securities and Exchange Commission to investigate whether Shell Oil Co. violated securities laws by failing to adequately disclose material business risks from climate change.
Members of the House Oversight and Government Reform Committee, led by California Democrat Ted Lieu, said in a letter to the SEC that Shell understood the consequences of climate change and made business decisions based on that knowledge.
“Yet, Shell funded and publicly engaged in a campaign to deceive the American people about the known risks of fossil fuels in causing climate change,” the lawmakers said in their letter to SEC Chairwoman Mary Jo White.
“As a publicly traded company, Shell has a duty to follow U.S. securities law … including disclosure requirements as they apply to business or legal developments relating to the issue of climate change. Unfortunately, it appears that Shell may have omitted or misrepresented material information in official filings.”
The call for an SEC probe of Shell is similar to an earlier demand that securities regulators investigate ExxonMobil. There has been a rising chorus of demands from lawmakers, presidential candidates, environmental activists and climate scientists for federal inquiries into whether Exxon’s actions and communications on climate change violated U.S. laws. InsideClimate News reported last week that the Justice Department referred a request to investigation Exxon to the FBI’s criminal investigation unit.
Shell spokeswoman Natalie Mazey and SEC spokeswoman Judith Burns both declined to comment.
The letter to the SEC cites investigative reporting by InsideClimate News and later by The Los Angeles Times reporting on early research into climate change by Shell, Exxon, Texaco and other fossil fuel companies.
Based on information from the news stories, Shell “intentionally obfuscated the role of fossil fuels in influencing climate change,” according to the letter signed by Lieu and fellow Democrats Matthew Cartwright of Pennsylvania and Peter Welch of Vermont.
As an example of Shell’s awareness of climate change and its impacts on the company’s business, the congressmen’s letter cites a Los Angeles Times report that Shell announced in 1989 it was redesigning a long-term, $3 billion natural gas platform in the North Sea because of rising sea levels from global warming.
But even then, Shell went on to fund climate deniers, according to the letter. It cited Shell’s membership in the Global Climate Coalition, a collection of the largest companies seeking to block government efforts to curb fossil fuel emissions.
“Based on the allegations above, it appears U.S. securities laws may have been violated,” according to the letter. “If you determine that violations did occur, we respectfully request the SEC to seek appropriate equitable remedies against Shell.”
In the case of Exxon, scientists repeatedly briefed the company’s top executives of the probability of rising global temperatures driven largely by fossil fuel use in the late 1970s. Yet the company didn’t elaborate on the carbon problem in SEC filings during the height of its research. Nor did it mention in the filings that concerns over carbon dioxide’s effect on climate change were influencing business decisions.
White made a noncommittal response to the earlier request for an investigation of Exxon.
“I want to assure you that the Commission’s staff will consider carefully the information included in your correspondence in connection with our statutory and regulatory responsibilities,” White said in a letter to Lieu.
Lieu said he hopes an investigation will not only address possible harm to investors but will send a message industry-wide that it has a responsibility to halt climate change.
“Climate change is the one issue that can kill humanity as a species if it isn’t stopped and mitigated right now,” Lieu said. “If there is a successful prosecution, hopefully a settlement can lead to companies taking action to mitigate climate change.”