New York AG uses Martin Act to reach climate-risk disclosure agreement with Xcel Energy
In an August 27, 2008 press release, the Office of New York State Attorney General Andrew M. Cuomo announced an agreement with Xcel Energy, one of the country’s largest owners of coal-fired power plants, that would require Xcel to disclose to investors the financial risks posed by global warming. According to an August 27, 2008 New York Times article, the agreement is “the first of its kind in the country" and "could open a broad new front in efforts by environmental groups to pressure the energy industry into reducing emissions of greenhouse gases that contribute to global warming.” (The terms of the agreement can be found in the Assurance of Discontinuance Pursuant to Executive Law § 63(15).)
The Xcel agreement traces its roots back to Attorney General Cuomo’s September 14, 2007 letter to Xcel and accompanying subpoena seeking information about Xcel’s analyses of its climate risks and its disclosures of those risks to investors. At that time, Attorney General Cuomo also sent similar letters and subpoenas to four other U.S. energy companies -- AES Corporation, Dominion Resources, Dynegy Inc., and Peabody Energy -- and the August 27, 2008 press release notes that the "Attorney General’s investigation of the remaining companies is ongoing."
The agreement with Xcel results from the New York Attorney General’s use of New York’s Martin Act as an environmental enforcement tool. Using this tool, the Attorney General claims jurisdiction over any company that issues securities on Wall Street. As the New York Times explained:
The agreement represents another novel use by Mr. Cuomo of the Martin Act, a powerful tool that allows the attorney general to bring criminal as well as civil charges. Mr. Cuomo’s predecessor, Eliot Spitzer, used the law to vastly expand the office’s investigations of suspected Wall Street malfeasance.
Now Mr. Cuomo has turned it into a de facto form of environmental enforcement, too. For energy companies, including those based far from New York, he is able to claim jurisdiction because they issue securities on Wall Street.
http://www.globalclimatelaw.com/admin/trackback/84670
