rewrite this title and make it good for SEOExxon sues California over climate disclosure laws

By Chandni Shah

(Reuters) -Exxon Mobil sued California on Friday, challenging two state laws that require large companies to publicly disclose their greenhouse gas emissions and climate-related financial risks.

In a complaint filed in the U.S. District Court for the Eastern District of California, Exxon argued that Senate Bills 253 and 261 violate its First Amendment rights by compelling Exxon to “serve as a mouthpiece for ideas with which it disagrees,” and asked the court to block the state of California from enforcing the laws.

Exxon said the laws force it to adopt California’s preferred frameworks for climate reporting, which it views as misleading and counterproductive. The oil giant said it already reports emissions and climate risks voluntarily, and objects to California’s frameworks.

Democratic-ruled California has long had some of the strictest environmental rules in areas like vehicle fuel efficiency standards and planning policy, after passing a climate change law in 2006.

California passed two laws in 2023 that would require companies to publicly report their greenhouse gas emissions and climate-related financial risks.

The California laws were supported by several big companies including Apple, Ikea and Microsoft, but opposed by several major groups such as the American Farm Bureau Federation and the U.S. Chamber of Commerce, which called them “onerous.”

SB 253 requires public and private companies that are active in the state and generate revenue of more than $1 billion annually to publish an extensive account of their carbon emissions starting in 2026. The law requires the disclosure of both the companies’ own emissions and indirect emissions by their suppliers and customers.

SB 261 requires companies that operate in the state with over $500 million in revenue to disclose climate-related financial risks and strategies to mitigate risk. Exxon also argued that SB 261 conflicts with existing federal securities laws, which already regulate what publicly traded companies must disclose regarding financial and environmental risks.

“The First Amendment bars California from pursuing a policy of stigmatization by forcing Exxon Mobil to describe its non-California business activities using the State’s preferred framing,” Exxon said in the lawsuit.

The California Department of Justice and the California Air Resources Board did not immediately respond to a request for comment.

(Reporting by Chandni Shah in Bengaluru and Mike Scarcella in Washington, Editing by Deepa Babington and Matthew Lewis)