*

Exxon sues California citing First Amendment rights

*

California laws require emissions and climate risk

disclosures

from large companies

*

Exxon claims California's laws mislead and counteract

voluntary

reporting

By Chandni Shah

Oct 25 (Reuters) - Exxon Mobil ( XOM ) 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.

Democrat-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

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 California Department of Justice and the California Air

Resources Board did not immediately respond to a request for

comment.