A federal judge in Houston on Monday dismissed a class-action lawsuit against Exxon Mobil Corp. and fiduciaries of its employee stock ownership plan that claimed the company's climate change impact disclosure harmed its stock value.
The plaintiffs in Fentress vs. Exxon Mobil were current and former employees invested in company stock through the Exxon Mobil Savings Plan from Nov. 1, 2015, through Oct. 28, 2016. They alleged corporate officers and plan fiduciaries "knew or should have known" that company stock became an imprudent investment following conflicting public and internal statements on the risk of climate change, and a federal investigation of Exxon's reserve accounting related to climate change and global warming.
Dismissing the complaint, U.S. District Judge Keith P. Ellison wrote that the decision addresses only the ERISA issues raised by the plaintiffs, and "does not decide whether Exxon or any of its affiliates engaged in false advertising, concealed negative financial or environmental information, or contributed to climate change."
Exxon's eventual disclosure of a dip in stock value related to climate change disclosure "was probably foreseeable, but the court cannot say it was inevitable," Mr. Ellison said in his decision. The plaintiffs' complaint "does not show that a prudent fiduciary could not conclude that remaining silent could have resulted in a drop in stock prices that would have done more harm than good to the plan."
