MANHATTAN (CN) - Four days after reports of a similar probe of Exxon Mobil, New York Attorney General Eric Schneiderman said Peabody Energy lied to shareholders about climate change: an "unprecedented" finding, he said.
Peabody, the largest private-sector coal company in the world with $6.79 billion in revenue, told the Securities and Exchange Commission for years that it could not predict how legislative action to limit greenhouse gas emissions would affect its business.
"Enactment of laws or passage of regulations regarding emissions from the combustion of coal by the U.S. or some of its states or by other countries, or other actions to limit such emissions, could result in electricity generators switching from coal to other fuel sources," it wrote in annual reports between 2011 and 2014.
These disclosures also added, however, that it was "not possible" for Peabody to "reasonably predict the impact that any such laws or regulations may have on [its] results of operations, financial condition or cash flows."
In fact, Peabody made such market projections privately in internal reports, Schneiderman's office said on Monday.
The attorney general issued his findings in a 19-page agreement with Peabody.
On future forms, Peabody must tell shareholders that "concerns about the environmental impacts of coal combustion could significantly affect demand for our products or our securities."
The agreement includes a three-page exhibit spelling out the language Peabody must now include on its disclosures.
Schneiderman predicted in a statement that such "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."
Peabody emphasized in its own statement that Schneiderman's eight-year-long probe yielded no other penalty against the company.
"There is no other action associated with this settlement, no admission or denial of wrongdoing and no financial penalty," the company noted. "The company has always sought to make appropriate disclosures."
But Schneiderman's office found that Peabody did not tell its shareholders just how much climate change could affect its bottom line.
In March 2013, Peabody projected that aggressive regulation would reduce the dollar value of coal sales in its primary markets - the Southern Powder River Basin and Illinois Basin - by 33 and 38 percent, respectively, according to the document.
Schneiderman says that an outside consultant retained by Peabody a year later concluded that a $20 per-ton carbon tax would reduce the demand for coal in the United States in 2020 by between 38 and 53 percent compared to 2013 levels.
On Nov. 5, the New York Times reported that Schneiderman's office issued subpoenas to Exxon Mobil in the wake of an InsideClimate News expose reporting that the oil giants spent decades privately acknowledging climate change while publicly sowing doubt.
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