ExxonMobil sues California over climate disclosure laws, launches carbon accounting coalition

US oil major ExxonMobil has filed a legal complaint against the state of California over its upcoming climate disclosure laws, a week after launching a new carbon accounting coalition with the argument that the world does not currently have an accurate system to know where emissions are coming from.

“California enacted two statutes that purport to require ExxonMobil to serve as a mouthpiece for ideas with which it disagrees,” the company states in a complaint filed with the US District Court for the Eastern District of California, referring to California’s SB 253 and SB 261. The two laws will require companies to disclose their emissions as well as climate-related financial risks from 2026.

‘Truly shocking’

ExxonMobil argues that the laws will force it to “describe its emissions and climate-related risks in terms the company fundamentally disagrees with, using frameworks that place disproportionate blame on large companies like ExxonMobil for being large”.

It then asks the court to declare that the laws are a violation of the First Amendment on free speech, and to exempt it from having to comply – potentially setting a dangerous precedent. Responding to the lawsuit, Tara Gallegos, a spokesperson for California Governor Gavin Newsom, told the New York Times it is “truly shocking that one of the biggest polluters on the planet would be opposed to transparency”, but that she is confident the law will be upheld in court.

The lawsuit is in line with a recent campaign against the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which saw ExxonMobil lobby the European Commission and US President Donald Trump to have the law scrapped.

Questioning the accuracy of the GHG Protocol

The complaint also states that ExxonMobil disagrees with the accuracy of the GHG Protocol and the TCFD framework – the most widely used carbon accounting and climate risk reporting standards and the basis for most of the world’s climate disclosure regulations.

It comes just a week after ExxonMobil, BlackRock, ADNOC and Banco Santander launched the new Carbon Measures coalition, with the goal of  “establishing a more accurate carbon accounting framework and driving market-based solutions to reduce emissions at the lowest cost”.

Upon launching the new initiative, Exxon CEO Darren Woods said: “The first step to reducing global emissions is to know where they’re coming from – and today, we don’t have an accurate system to do this. A standard carbon emissions accounting methodology provides a necessary foundation for a framework that will encourage competition, leverage each company’s strengths, and mobilise market forces to meet the challenge of growing energy demand while lowering emissions.”

While the move was welcomed by some as a way to align accounting methodologies for product-level emissions, others pointed to the irony of fossil fuel firms questioning established frameworks. 

“Nothing says climate progress like ExxonMobil and ADNOC Group explaining carbon accounting to the rest of us. The very companies that spent decades perfecting the art of climate science suppression and policy derailment have suddenly discovered the joys of ‘accurate measurement’, pointed out Zsolt Lengyel, Head of Climate and Energy at Green Value Chain.