Coal producer Peabody Energy Corp. reached an agreement with the New York attorney general to provide fuller disclosures to investors about the financial risks it faces from regulations to fight climate change.
The largest U.S. coal-miner reached the accord with New York Attorney General Eric Schneiderman on Sunday, according to a copy of the agreement. Schneiderman found after a two-year investigation that the St. Louis-based company had provided incomplete information to investors by stating in public reports that it is “not possible” to “reasonably predict” the impact such laws or regulations might have on its finances.
The deal comes as New York, with 17 other states, is trying to join litigation to defend the Obama administration’s Clean Power Plan from a bloc of 26 states, including Texas and Florida. The regulatory initiative is meant to steer the U.S. away from coal power and toward renewable energy sources.
Schneiderman is also probing Exxon Mobil Corp. to determine whether the company lied to investors and the public about the effect of climate change on its profits, a person familiar with the matter has said. Schneiderman issued a subpoena to the company on Wednesday seeking a lengthy list of documents and disclosures, including communications with trade associations and industry groups, according to the person, who asked not to be identified because the probe isn’t public.
In its agreement, Peabody Energy neither admitted nor denied the attorney general’s findings.
Peabody Energy “has a responsibility to be honest with its investors and the public about the risks posed by climate change, now and in the future,” Schneiderman said in a statement Sunday. “I believe that full and fair disclosures by Peabody and other fossil fuel companies will lead investors to think long and hard about the damage these companies are doing to our planet.”
In a formal announcement of the agreement on Monday, Schneiderman said the company will file revised shareholder disclosures with the U.S. Securities and Exchange Commission and has agreed that all future statements to shareholders will be consistent with the terms of the accord. The changes in the company’s new disclosures will be reflected in a quarterly statement scheduled to be filed Monday, Schneiderman said.
Vic Svec, a Peabody spokesman, said in a statement that the company agreed to “enhance” disclosures related to international energy officials’ global outlooks and “the ability of the company to estimate impacts from prospective future laws or regulations.”
When describing the difficulty of making projections in future reports, Peabody Energy will also note whether it has examined scenarios involving certain potential laws or regulations related to climate change or coal that could affect the company’s finances, Svec said.
“Moving forward, Peabody has been among the most vocal companies worldwide in advocating clean coal technologies, including greater deployment of high-efficiency low-emissions coal-fueled plants and development of next-generation carbon capture, use and storage technologies,” Svec said. The company also “has been involved in major global initiatives to reduce carbon emissions for nearly two decades.”
No monetary penalty is included in the agreement. Schneiderman found the company’s previous disclosures violated the state’s Martin Act, a New York law which grants the state attorney general broad powers to fight financial fraud.