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A New York state court has dismissed the city’s lawsuit against major oil companies, marking a significant setback for climate accountability efforts. The suit, filed in 2021, accused ExxonMobil XOM, BP plc BP and Shell SHEL of misleading the public about the environmental impact of their products. The city alleged that these companies used deceptive marketing tactics to portray themselves as climate-friendly while continuing to invest heavily in fossil fuel production.
Big Oil Targeted in the Lawsuit
Investors should know that the companies at the center of the case were facing allegations of "greenwashing" their practices. New York City claimed that these oil giants marketed their products as cleaner alternatives, emphasizing reduced emissions and sustainability while downplaying their contributions to climate change. Additionally, the lawsuit called out statements like “drive cleaner, smarter, and longer,” which the court ultimately ruled as subjective and non-specific.
Highlights of the Ruling
Justice Anar Patel dismissed the lawsuit, citing contradictions in the city’s arguments. Patel noted that New York City could not simultaneously claim that consumers were aware of fossil fuels' environmental risks and accuse the companies of misleading those same consumers. The court also found the allegations of “greenwashing” insufficient, with Patel stating that vague advertising slogans and general claims about sustainability were inactionable under consumer protection laws.
Companies Involved
The energy operators that were sued include the following biggies:
ExxonMobil: It is one of the largest publicly traded oil and gas companies in the world with operations that span almost every corner of the globe. Spring, TX-based ExxonMobil is fully integrated, meaning it participates in every aspect related to energy — from oil production, to refining and marketing.
BP: Based in London and established in 1866, BP is a global energy leader. The Zacks Rank #3 (Hold) company operates across oil production, natural gas, refining and low-carbon energy. With refineries handling 1.6 million barrels daily, BP also markets energy products worldwide through its integrated operations.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Shell: London-based Shell’s long-term strategy revolves around liquefied natural gas (“LNG”), considering the secular shift to the cleaner burning fuel for power generation worldwide and in the Asia-Pacific region in particular.