Exxon Mobil has filed a lawsuit against the state of California, challenging two state laws that require large companies to disclose greenhouse gas emissions and climate-related financial risks. The lawsuit, filed in the U.S. District Court for the Eastern District of California, argues that these laws, Senate Bills 253 and 261, violate Exxon’s First Amendment rights by compelling the company to act as a mouthpiece for climate policies it disagrees with. Exxon claims the laws force it to adopt California’s preferred frameworks for climate reporting, which it views as misleading and counterproductive. The company argues that the disclosure requirements place disproportionate blame on large corporations like Exxon, thereby undermining its ability to present its own perspective on climate issues.
SB 253 requires companies operating in California with over $1 billion in annual revenue to publish detailed accounts of their and their suppliers’ and customers’ carbon emissions starting in 2026. SB 261 mandates that companies with over $500 million in revenue disclose climate-related financial risks and mitigation strategies. These requirements are supported by technology giants such as Apple, Microsoft, and Ikea, but opposed by groups like the American Farm Bureau Federation and the U.S. Chamber of Commerce, which have called the laws ‘onerous.’ Exxon contends that the laws conflict with existing federal securities laws and that its current disclosures already meet transparency standards. The company seeks to prevent the laws from going into effect, arguing that they infringe on its First Amendment protections by compelling it to adopt a specific narrative on climate change.
In response to the lawsuit, a spokesperson for California Governor Gavin Newsom’s office called the move ‘truly shocking,’ given Exxon’s status as one of the planet’s largest polluters. The lawsuit underscores a growing tension between corporate entities and regulatory frameworks around climate transparency. As the legal battle progresses, it may have significant implications for how companies are required to disclose their environmental impact and navigate the intersection of legal rights and environmental responsibilities.