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PriceWaterhouse

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boing cory

In 2017, Pricewaterhousecooper published Using science fiction to explore business innovation, a guide for corporations that wanted to work with sf writers to think about the future of their businesses; it was part of a wave of corporate interest in the insights of sf writers, which also coincides with a parallel trend in academia (see, for example, ASU's Center for Science and the Imagination and UCSD's Clark Center for Human Imagination, both of which I have some involvement with).

Some science fiction writers are now experiencing a small boom in consulting contracts, which often take the form of writing short stories (here's one I wrote for Intel) or participating in workshops.

I've done a small amount of this work myself, and I've been getting more offers over the transom, including one this week, which I passed to my agent to negotiate; he told me that his other clients are also getting these gigs.

I can't see any downside to this, to be honest. I recently spoke to a bunch of senior Audi people about the link between DRM and Dieselgate, and how a lack of competition in the corporate sector has led to market concentration, weak regulation, and a festering corruption problem. I don't know if the top management will take what I had to say to heart, but the people in the audience definitely connected, as I learned in speaking to them one to one afterwards.

I don't think that science fiction is a very good way of predicting the future (I also don't think that the future can be predicted), but I *do* think that science fiction is a great way to *influence* the future.

There's a "Sci-Fi Prototyping" business around the corner from my house that I keep driving past and meaning to go and check out -- clearly, there's something going on in the sector beyond these gigs that keep mysteriously materializing for me. They get some press in an article on the trend, and cite Boing Boing pal Brian David Johnson as inspiration.

Popper says he relies on a process called “science fiction prototyping.” The man who literally wrote the book on the method is Brian David Johnson, a professor, engineer, and sci-fi author based in Portland, Oregon. In his book Science Fiction Prototyping: Designing the Future with Science Fiction, Johnson outlines “How to Build Your Own SF Prototype in Five Steps or Less.” It begins by exhorting practitioners to “Pick Your Science and Build Your World,” moves on to instructions on how to identify the inflection point upon which that science or technology will collide with people, and suggests a framework for considering the ramifications. It’s sort of a basic sci-fi writing prompt guide through the lens of business management literature. “It’s science fiction based on science fact,” Johnson says. “It’s used as a way to prototype the future, and sci-fi is about people.” The best example, he says, is Intel, where until recently he served as chief futurist. “It took Intel 10 years to design and deploy a chip, so they needed to know 10 years out what people would do with computers.”

For an initial fee in the range of $50,000, SciFutures will take a prompt from a client — say, the Future of Sustainability for Naked Juice, or the Future of Home Improvement for Lowe’s — and farm it out to 30 or so writers. Popper and company read the stories, which usually clock in around 1,000 words (he typically pays writers $300 to $500 for each one, though more seasoned writers can command more), and scan them with an eye to intellectual property, novelty, and technology. Then they’ll choose five or so and polish them up for delivery to the client, often translating them into graphic novels or other media. If the client is hooked on a specific science fictional idea, SciFutures will help them develop further blueprints, even actual prototypes.

“The program we helped set up for Lowe’s is a phenomenal case study for how science fiction prototyping can transform culture, bring genuine innovation into the business,” Popper says. The hardware chain told him it was having trouble getting customers commit to home improvement projects, so SciFutures put forward the idea of decorating in virtual reality. “This was before Oculus — VR wasn’t a thing, AR wasn’t a thing.”

Nike and Boeing Are Paying Sci-Fi Writers to Predict Their Futures [Brian Merchant/Medium]

(via Marginal Revolution

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https://insideclimatenews.org/news/23052017/exxon-climate-fraud-investigation-new-york-attorney-general-pwc-auditor-appeal

ExxonMobil lost its appeal on Tuesday to keep records held by its auditors away from the New York attorney general's climate fraud probe.

The documents could afford a candid—and perhaps damaging—glimpse into Exxon's private calculations of the business risks posed byclimate change. They could contain anything from a smoking gun email to plodding, yet revealing, discussions related to Exxon's posture on global warming, including whether the company was adequately calculating climate change risks for investors. Exxon still has another opportunity to appeal.

Investigators for state Attorney General Eric Schneiderman subpoenaed PricewaterhouseCoopersrecords pertaining to Exxon's assessment of climate change as part of an investigation into Exxon that was opened in 2015.

Exxon fought to have the subpoena voided, arguing the records were privileged communications with its auditor and should be kept from the eyes of investigators. The oil giant, headquartered in Dallas, based its argument on a Texas law that grants a privilege to auditors and clients much like that between a lawyer and client.

A state court judge agreed with Schneiderman's office that there was no such protection afforded Exxon under New York law and ordered the documents handed over last year. Exxon appealed that decision.

The appeals court, which had been considering the case since a hearing in March, rejected Exxon's argument.

"In light of our conclusion that New York law applies, we need not decide how this issue would be decided under Texas law," the two-page decision said.

Exxon did not respond to a request for comment.

Caroline Nolan, a spokeswoman for PwC, said the company had no comment.

The accounting firm, which has expertise in climate-related risks faced by fossil fuel companies, has remained neutral in the legal fight but has honored Exxon's request not to turn over documents pending the outcome of the litigation.

Exxon has been fighting investigations by Schneiderman and Massachusetts Attorney General Maura Healey both in federal court and state courts.

Schneidermanopened his financial fraud investigation of Exxon in November 2015 by subpoenaing decades of records related to Exxon's history of research into and knowledge of climate change. The investigation revolves around whether the company misled shareholders and the public about the risks of climate change.

The attorney generalfollowed up with a subpoena to PwC nine months later seeking documents related to the auditors' work for the oil giant. Records sought under thesubpoena include documents about accounting and reporting of oil and gas reserves, evaluation of assets for potential impairment charges or write-downs, energy price projections and projected cost estimates of complying with carbon regulations.

Attorneys for Exxon argued that the judge's ruling in October to force PwC to surrender documents "eviscerates" the accountant-client privilege afforded by the laws of Texas, where Exxon is headquartered.

New York investigators disagreed and argued that PwC should feel a moral obligation to cooperate. "As a certified public accountant, PwC 'owes ultimate allegiance to [a] corporation's creditors and stockholders, as well as to the investing public,'" the attorney general's office responded.

Exxon could file additional appeals up to the New York Supreme Court or allow PwC to comply with the subpoena.

While it is unclear what Exxon's next move may be related to the PwC documents, the company is also asking a judge to seal five subpoenas issued by Schneiderman's office in connection with its investigation, which has grown to include missing emails from former Exxon CEO Rex Tillerson, now U.S. secretary of state.

The attorney general's officedisclosed last week that it has expanded its probe to determine whether Exxon may have destroyed emails from Tillerson's "Wayne Tracker" email alias. Investigators are trying to determine why several weeks of emails from that account are now missing. As part of that widening investigation, the attorney general's office revealed that it has subpoenaed a number of Exxon officials.

Exxon offered few cluesin its request to the New York judge overseeing the case as to why the documents and the arguments by company lawyers justifying the sealing must remain secret.

PUBLISHED UNDER:

OIL/TAR SANDS

EXXON CLIMATE

CLIMATE CHANGE

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fter cooperating for nearly a year with the New York attorney general's office, ExxonMobil is now suing to block the state's sweeping subpoena that seeks records dealing with the company's climate research going back nearly 40 years.

The oil giant filed a motion Monday in Texas federal court asking to amend its pending lawsuit against Massachusetts Attorney General Maura Healey to include New York Attorney General Eric Schneiderman. The litigation seeks to halt their investigations, which the company calls a conspiracy to further their political agenda.

"The improper political bias that inspired the New York and Massachusetts investigations disqualifies Attorneys General Schneiderman and Healey from serving as the disinterested prosecutors required by the Constitution," according to an unsigned news release issued by Exxon announcing the new litigation.

Eric Soufer, a spokesman for Schneiderman, called Exxon's motion "stunt litigation" that has no merit and will not stop New York's investigation.

"As we've seen for months, Exxon will do everything in its power to distract, delay, and avoid any investigation into its actions, which may have violated state securities and consumer fraud laws," he said.

Exxon's motion comes less than a week after the federal judge in Texas dealt a setback to Healey's investigation by demanding she turn over documents that might show she has prejudged Exxon's fate based on her political views.  

"Today's motion is yet another attempt by Exxon Mobil to impede state investigations into whether the company deceived consumers and investors about the impact of fossil fuels on the environment and Exxon's business," said Chloe Gotsis, a spokeswoman for Healey.

In attacking the New York investigation, Exxon called Schneiderman's probe "politically charged."

"As the investigation unfolded, events further suggested that Attorney General Schneiderman's inquiry had more to do with politics than law enforcement," according to the motion.

In the year since New York issued an 18-page subpoena for documents related to Exxon's research into the causes and effects of climate change, the company said it has turned over more than 1 million pages of documents.

But Exxon now says it believes Schneiderman "has no intention of fairly evaluating ExxonMobil's substantial production of documents," according to the motion.

The company cites what it calls a change in tactics by Schneiderman.

"Less than a month ago, and well after ExxonMobil commenced this action, the Attorney General's spokesman stated that the Company's 'historic climate change research' was no longer 'the focus of this investigation,'" according to the motion.

"Rather than close his investigation, Attorney General Schneiderman shifted focus.  He directed ExxonMobil to produce documents concerning its estimation of oil and gas reserves."

That investigative avenue would be geared toward New York's consumer laws that safeguards against financial fraud. Schneiderman has said his investigation rests in large part on how the company informed investors about financial risks based on the impact to the company's oil reserves—estimates based on the potential of future regulations designed to reduce greenhouse gas emissions from the burning of fossil fuels.

Exxon argues in its motion that Schneiderman's probe is "particularly egregious" because Securities and Exchange Commission regulations prohibit companies from considering the impact of future regulations when estimating reserves.

"The theory that the Attorney General has promoted to media outlets requires that ExxonMobil adopt his assumptions about the likelihood of possible future climate change regulations and then incorporate those assumptions into its estimation of proved reserves and its determination of whether an asset has been impaired," according to the motion. "But that theory of 'massive securities fraud' cannot be reconciled with SEC rules and regulations."

Despite a recent report that the SEC itself is looking into Exxon's climate risk disclosures, the agency would not confirm or deny the existence of an investigation.

As it has for more than six months, Exxon decried Schneiderman's role in forming a coalition of attorneys general that vowed to hold fossil fuel companies accountable for any misconduct associated with climate change.

"The Attorney General pledged that the coalition would 'deal with the problem of climate change' by using law enforcement powers 'creatively' and 'aggressively' to force ExxonMobil and other energy companies to support the coalition's preferred policy responses to climate change," according to the motion.

As the case in Texas continues to heat up, Schneiderman's office filed its own motion Friday in New York State court to compel the company's independent auditor to comply with a subpoena.

Since being served the subpoena in August, Schneiderman said PricewaterhouseCoopers has declined to turn over critical documents, citing Exxon's assertion of an accountant-client privilege. Caroline Nolan, a spokeswoman for PricewaterhouseCoopers, said the company has cooperated with this investigation since receiving the subpoena. "The firm has responded promptly to the request and will continue to do so," she said.

The subpoena hits at the question by New York investigators of whether Exxon has had longstanding knowledge of the risks associated with climate change, including the risks posed to its business by climate change-related policies and regulations.  That question is a key element in determining whether the company violated the state's consumer fraud statutes.

"Exxon's publicly-filed reports state that in the course of its audits of Exxon, PwC examines whether the disclosures in Exxon's financial statements are supported by evidence and issues opinions as to whether Exxon's financial statements fairly and accurately represent its financial position," according to the motion to require disclosure of records connected with the company's assessment of the risk of climate change.

"Notwithstanding its apparent knowledge of climate change-related risks, Exxon appears to have downplayed those risks in public statements."

PUBLISHED UNDER:

BUSINESS AND ACCOUNTABILITY

EXXON CLIMATE

CLIMATE CHANGE

LITIGATION

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https://insideclimatenews.org/news/07032017/exxonmobil-climate-change-research-rex-tillerson-ny-attorney-general-pwc

A high-stakes legal battle between ExxonMobil and the New York attorney general's office is roiling around documents held by the company's auditors. Those documents, usually dry disclosures that hold little public interest, could afford a candid—and perhaps damaging—glimpse into Exxon's private calculations of the business risks posed by climate change.

As part of a financial fraud investigation, state Attorney General Eric Schneiderman subpoenaed Exxon auditor PricewaterhouseCoopers last August for climate risk assessments by Exxon.

Investors and the public rely on those disclosures to assess the impact climate change could have on the company's profitability. If they are incomplete or misleading, the public could be misled about investment decisions.

Schneiderman could unearth anything from a smoking-gun email to revealing discussions related to Exxon's posture on climate change. They could show a conflict between the company and PwC over whether Exxon was adequately calculating its financial risks.

The documents have the potential to be some of the most unvarnished records exposing Exxon's assessment—and perhaps reluctance to fully gauge—the risk that climate change posed to its business.

Exxon says the records it provided PwC for review are privileged—much like the communications between lawyers and their clients—and should be kept from the eyes of investigators.

A Manhattan judge ruled in Schneiderman's favor last year, saying the Texas accountant-client privilege law Exxon is invoking to block the subpoena carries no weight in New York. The judge ordered PwC to hand over the records.

Exxon disagreed and rushed to appeal that ruling. A hearing is scheduled for March 21.

Schneiderman opened his financial fraud investigation of Exxon in November 2015 with a subpoena to the energy giant for decades of records related to its history of climate change understanding.

Exxon turned over more than 1.2 million pages of records, then refused to cooperate. At the same time, the company went to court in Texas to block the investigation.

Nine months later, the attorney general followed with a subpoena to PwC seeking documents related to the auditors' work for Exxon. Records sought include documents about accounting and reporting of oil and gas reserves, evaluation of assets for potential impairment charges or write-downs, energy price projections and the cost-benefit analyses of complying fully with regulations aimed at reducing greenhouse gas emissions....

N.Y. Prosecutors: Moral Obligation to Comply

Attorneys for Exxon argue that forcing PwC to surrender documents "eviscerates" the accountant-client privilege afforded by the laws of Texas, where Exxon is headquartered. "While the lower court may disagree with Texas's enumerated exceptions, it may not ignore them," according to a brief filed in the appellate division of the New York Supreme Court.

New York prosecutors argue that New York State law extends no such privilege. Further, they argue, PwC should feel a moral obligation to cooperate. "As a certified public accountant, PwC 'owes ultimate allegiance to [a] corporation's creditors and stockholders, as well as to the investing public,'" according to the attorney general's response.

The accounting firm, which has expertise in climate risks faced by fossil fuel companies, has remained neutral in the legal fight but has honored Exxon's request to withhold the documents, pending the outcome of the litigation.

Caroline Nolan, a PwC spokeswoman, said the company had no comment.

David Shapiro, an assistant professor of public management at New York's John Jay College of Criminal Justice, said state investigators likely will be seeking records documenting internal discussions that may expose conflicts; they will be seeking paper trails leading to unpublished appraisals, and for any incriminating smoking-gun emails and documents Exxon thought would never come to light.

Through documents obtained from the company by a separate subpoena, "the attorney general has Exxon's story," he said. "Now they want to see how PricewaterhouseCoopers viewed that story and if there were any conflicts."

'They Could Go Consultant-Shopping'

Investigators will be particularly interested in whether PwC engaged different independent consultants to double-check Exxon's books, estimates and assumptions. That's a common approach used by auditing firms to ensure records are scrutinized from various angles.

It's not unusual for an independent auditor to solicit two or three external analyses of a client's records. It then picks the one most in line with its client estimates and assumptions, said Shapiro, a forensic accountant and former FBI agent who specialized in financial crimes.

"If Exxon was looking for a specific valuation of oil reserves or a certain risk assessment conclusion, for example, they [PwC] could go consultant-shopping," Shapiro said. "In the final audit, everything might look clean."

"But you might never hear of other opinions."

Even if an outside specialist's opinion is not adopted, there still will be a contract for the work and a record of payment,  a clue investigators will be looking to uncover.

"Finding that record will give investigators the opportunity to follow up with the outside consultant whose analysis was not adopted and ask the question, 'What did you find?'" Shapiro said.

Determining How Exxon Calculated Climate Risk

The auditor's job is to determine how accurately Exxon calculated  risks posed by climate change.

But to do that, Exxon would have to be forthright in telling PwC what it knew about climate change, the potential for shifting oil demand, and how it took those factors into account when determining risk, said Kathy Enget, an assistant professor of forensic accounting and data analytics at the State University of New York at Albany.

Exxon performs its own risk calculations and asks its auditors to double-check its conclusions, including financial estimates that reflect how the company's worth could be impacted by various climate change scenarios.  It is those work papers—records that never become part of a company's public disclosure—that investigators would want to review, she said.

"The auditor's records will show what information was used by the company in addressing whether there was risk associated with climate change," Enget said. "PwC would then have tested those conclusions, checking to see if they were reasonable."

PwC's records would reflect any questions it had regarding Exxon's assessment, and any recommendations for revising risks associated with climate change.

"There could be conflicts," she said. "The records would show the basis for those conflicts and how they got resolved."

Exxon ultimately decides—and is responsible for—what public disclosures it makes through the U.S. Securities and Exchange Commission. Among the world's largest oil companies, Exxon has been one of the most resistant to factoring climate change, and possible responses to it, in financial projections.

In a surprise announcement last year, the company revealed that it might cut estimates of its Canadian tar sands reserves, though the company cited no link to climate change. When it later did drop 3.5 billion barrels from its reserves, it attributed the move to dropping oil prices. While Exxon was contemplating that, word was circulating on Capitol Hill that the SEC had opened a probe into whether Exxon had been forthcoming with investors about climate change.

Building a Financial Fraud Case

Critical to New York's review of PwC records will be the depth of information Exxon provided, said Joel D. Schwartz, a former federal prosecutor.

"It's theoretically possible that by hiding what the company knew about climate change from auditors, it meant the company would not have to identify it as a financial threat," said Schwartz, who served as an assistant director of the Public Accounting Oversight Board. The non-profit organization was established by Congress to oversee the audits of public companies.

With a forthright assessment of climate change, however, it's conceivable PwC would have urged the company to write down—or devalue—its assets, Schwartz said.

If Exxon knew the extent of the risk posed by climate change and withheld that information, that could form the foundation of a fraud case, Schwartz explained, because investors would have relied on Exxon's climate risk accounting in making investment decisions.

"So what you're looking for is what did Exxon tell PwC, what kind of questions did PwC ask Exxon relative to climate change risks, and how was it ultimately resolved," Schwartz said

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REF WAPO

Democracy Dies in Darkness

CLIMATE AND ENVIRONMENT

In a loss for ExxonMobil, NY Supreme Court orders oil giant to produce climate documents

Massachusetts Attorney General Maura Healey, right, joined by New York Attorney General Eric Schneiderman, speaks during a news conference, in New York. Healey and Schneiderman have issued subpoenas as part of an inquiry into whether ExxonMobil deceived investors and the public by hiding what it knew about the link between burning fossil fuels and climate change. (AP Photo/Mark Lennihan, File)

By Steven Mufson

October 26, 2016

In a loss for ExxonMobil, the New York State Supreme Court has ordered the oil giant and its accounting firm to produce documents subpoenaed in a highly charged investigation of whether the company concealed from investors and the public what it knew about climate change as long as four decades ago.

The New York State Attorney General Eric Schneiderman, who issued a subpoena in August, sought on Oct. 14 to force PricewaterhouseCoopers to provide the documents after ExxonMobil said it would not permit PwC to provide certain documents based on a Texas statute that Exxon said provided “accountant-client privilege.”

The New York Court ruled that Exxon’s interpretation of the Texas statute was “flawed,” and said the Texas statute does not preclude PwC from producing the documents requested by the New York attorney general’s office. The court also stated that New York law, rather than Texas law, governed the dispute.

“We are pleased with the Court’s order and look forward to moving full-steam ahead with our fraud investigation of Exxon,” Schneiderman said in a statement. “Exxon had no legal basis to interfere with PwC’s production, and I hope that today’s order serves as a wake up call to Exxon that the best thing they can do is cooperate with, rather than resist, our investigation.”

ExxonMobil, however, said it would challenge the order. “We respectfully disagree with the court’s ruling and intend to take an immediate appeal,” said ExxonMobil spokesman Alan T. Jeffers in an email. The company could appeal to the New York state appellant division and later to the Circuit Court of Appeals in New York.

The legal maneuvering is the latest round in a dispute over whether ExxonMobil knew decades ago that climate change was a real threat and whether it improperly concealed that information from investors and the public. That could be a violation of the Martin Act, which gives the New York attorney general broad power to pursue fraud cases. Schneiderman and other attorneys general, in an unusual step, held a press conference in March vowing to work together to combat climate change, including through the investigation of ExxonMobil.

Exxon has asserted that it did not conceal material information and accused the attorneys general of having a political agenda. The company said the subpoenas alone would chill companies’ internal research and free speech.

ExxonMobil has produced more than a million pages of documents, but it has also asked a Texas federal court to issue a preliminary injunction blocking the need for the company to comply with similar subpoenas issued by Massachusetts Attorney General Maura Healey. U.S. District Court Judge Ed Kinkeade of Texas did not grant the injunction, but on Oct. 13 he issued a discovery order for ExxonMobil to examine Healey’s internal documents and records to determine whether she acted in “bad faith” in issuing her subpoena. ExxonMobil later asked the judge to add Schneiderman’s name to the order.

Healey has asked the court to vacate its order and dismiss Exxon’s suit.

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GS beat up OTS:

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OTS:

AIG

The OTS was pressed by the Senate Banking Committee to admit partial blame for the failure of American International Group (AIG).[30] In a congressional hearing, after Donald Kohn described how there was no regulator for AIG Financial Products or the company overall, Scott Polakoff interrupted.[31][32] Polakoff stated that it was time for the OTS to take some responsibility because they had been "deemed an acceptable regulator for both US domestic and international operations".[33]

Due to OTS regulation of AIG, the Mayfair-based (London, UK) AIG Financial Products division was not subject to Financial Services Authority regulation.[34] OTS regulation allowed France's Commission Bancaire to grant approval for a Paris-based banking subsidiary, Banque AIG. The Mayfair-based AIG Financial Products division then opened under a system which allowed branch openings in member countries after one EU regulator's approval.

That OTS was the primary regulator of AIG has been described as "nonsense"[35] and compared to "the super-heavyweight of the world going up against the 65 lb, 13-year-old, class weakling".[36] AIG operates in 130 countries.[37] The OTS had a small division that monitored derivatives including the credit default swaps at AIG.[38]After a dispute with Goldman Sachs in 2007 over the value of the credit default swaps,[39] the OTS did not initiate formal enforcement action, but "periodically raised concerns with AIG managers".[38] Other sources of concern were the three credit rating agencies and AIG's auditor PricewaterhouseCoopers.[39] In March 2008, after AIG disclosed valuation problems, the OTS sent a letter to AIG requesting a "corrective action plan" in 30 days.[38] The division overseeing AIG Financial Products was "quietly disbanded" and AIG missed their deadline.[38]

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http://www.institutionalinvestorsecuritiesblog.com/2012/11/fdic_sues_pricewaterhouse_coop.html

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Just when the legal and legislative jousting over Exxon's climate record seemed to be bogging down in posturing and partisanship, the powerful Securities and Exchange Commission has stepped in with pointed questions about the oil giant's disclosures of the risks of global warming.

The development, coming a year after a series of investigations were sparked by reports by InsideClimate News and other news organizations, is significant in at least three ways.

First, the SEC's new involvement turns the Exxon investigations from a matter being pursued by a handful of state attorneys general into a federal case.

Second, the action underscores that the issue goes far beyond mere uncertainties in climate science, or policy differences about addressing the mounting climate crisis, and involves significant financial risks to Exxon and its investors.The SEC is not only interested in what Exxon's scientists knew, but what its accountants knew, too.

Third, and perhaps most significant, the SEC's involvement backs the Exxon questioners' contention that they are not merely on a partisan witch hunt, as Exxon's defenders have been trying to paint their investigations.

All of the attorneys general known to be investigating Exxon are elected Democrats, and some of their Republican counterparts have come to Exxon's defense by challenging the state subpoenas. So have Republicans in Congress, including those on the House Science Committee, who charge that the AGs have been colluding with environmental advocates to infringe on the company's rights.

The SEC, on the other hand, is not just a dogged regulatory agency, but a scrupulously non-partisan one, independent of political influence by statute and design. It is focused onenforcing transparency in the financial reports of publicly traded companies. And it is increasingly intent on making sure that climate risks are properly disclosed.

"At the end of the day," Mary Jo White, the commission's chairwoman, said in a speech shortly after President Obama selected her to lead the agency, "we make our decisions based on an impartial assessment of the law and the facts and what we believe will further our mission—and never in response to political pressure, lobbying, or even public clamor." She pointed out that the commissioners include two Democrats, two Republicans, and herself—an Independent.

The Wall Street Journal first reported on Tuesday that the SEC has opened its probe of Exxon's accounting and risk disclosures. The company's outside auditors, PriceWaterhouse, are also being questioned, and the SEC has been receiving information provided by Exxon to New York's attorney general as well, the Journal reported.

The article, which is based on unnamed sources, said that beyond the implications for Exxon, "the probe may also signal the opening of a new front of climate-related regulation and enforcement at the SEC, a direction with far-reaching consequences for the oil and gas industry."

According to the Journal, the SEC "asked Exxon to produce information about its analysis of climate data and research, how it values assets and how a more serious global response to climate change would impact its business."

"The agency specifically asked what would happen to Exxon under a scenario envisioned by last year's Paris climate talks—if greenhouse gas emissions were reduced 80% by 2050," the Journal reported.

Exxon's environmentalist opponents welcomed this news.

"This investigation is a welcome opportunity for transparency from the fossil fuel industry," said Annie Leonard, Greenpeace's executive director. "We know Exxon has published projections showing that demand for oil and natural gas will continue growing for decades to come—projections which are flatly incompatible with limiting global warming to 2 degrees Celsius, as called for by the Paris climate accords. What we don't know is how Exxon's balance sheet would change if the world meets the climate challenge.

"Exxon's current market valuation is partly based on its proven reserves—a giant bank of already discovered oil and gas deposits that it plans to someday exploit and sell. But in a world where we successfully tackle climate change, many of those assets would be left in the ground. Investors have a right to understand how Exxon's profitability and value are threatened by common sense policies to address climate change, and the SEC seems to agree."

In this regard, the SEC investigation tracks closely with the direction of investigations of the state attorneys general, led by New York's Eric Schneiderman.

Schneiderman recently told The New York Times that he was just as interested in how Exxon describes the future markets for fossil fuels under restrictions of global carbon dioxide emissions as he is in how early Exxon recognized the existential threat to its business model posed by climate change.

The Journal had also reported that one key element of Schneiderman's investigation was to question how Exxon was accounting for its fossil fuel reserves at a time when oil prices have been depressed.

The Massachusetts attorney general, Maura Healey, meanwhile, haddeclared in a court filing that Exxon "may have failed to disclose fully its knowledge of the threats posed by climate change to its businesses and that Exxon continues to make apparently misleading and deceptive statements to investors."

The attorneys general joined forces to investigate Exxon in the wake ofreporting by InsideClimate News, the Los Angeles Times and others that described Exxon's early climate science research four decades ago, and its subsequent efforts to muddy the scientific consensus and stave off climate action.

In the first of several news articles published beginning last September, ICN noted that Exxon had been "cautious about what they told Exxon's shareholders about global warming," as the problem came to light in the 1970s and 1980s, a time when the company began to conduct ambitious research into the problem.

Schneiderman wants to know whether Exxon's lack of climate risk disclosure amounts to fraud under New York's expansive securities and consumer protection laws.

The passage of time has put limits on holding Exxon accountable for statements made decades ago, but it has also added pressure on the company and other fossil fuel firms to be more forthcoming now that global warming is so much better understood.

Ten or 15 years ago, it might have been plausible not to disclose the risks a company would face if the world took steps to back away from fossil fuels and their heat-trapping emissions. But since then, investors and advocates have pressed the SEC to toughen its disclosure standards. It did so with new guidance issued in 2010, and the calls for more transparency have only mounted since then, particularly following the emissions reduction pledges the U.S. and other countries committed to in the Paris climate accord last year.

There are several kinds of risks that companies should consider disclosing, according to the SEC. One is the direct damage they may face from climate change, such as flooded oil terminals and the like. Another is costly regulations that they see coming down the pike, such as requirements to control emissions from refineries. A third might be the risk of possible penalties that tobacco-style litigation would impose for damages suffered by others.

But ultimately, the most important risk of all to a fossil fuel giant like Exxon is the risk that its main product, petroleum, will go the way of whale oil, leaving the company's assets stranded.

This is known as strategic risk. And while it may be incalculable, authorities seem to be suggesting that to protect investors it should not be hushed up.

HTTPS://INSIDECLIMATENEWS.ORG/NEWS/21092016/EXXON-SEC-QUESTIONS-FINANCIAL-RISKS-CLIMATE-CHANGE-ERIC-SCHNEIDERMAN-NY

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bill mvk RS 8/16

The Carbon Tracker Initiative – led by James Leaton, an environmentalist who served as an adviser at the accounting giant PricewaterhouseCoopers – combed through proprietary databases to figure out how much oil, gas and coal the world's major energy companies hold in reserve. The numbers aren't perfect – they don't fully reflect the recent surge in unconventional energy sources like shale gas, and they don't accurately reflect coal reserves, which are subject to less stringent reporting requirements than oil and gas. But for the biggest companies, the figures are quite exact: If you burned everything in the inventories of Russia's Lukoil and America's ExxonMobil, for instance, which lead the list of oil and gas companies, each would release more than 40 gigatons of carbon dioxide into the atmosphere.

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PricewaterhouseCoopers International Limited (PwC) is one of the world's largest accounting firms along with Deloitte, Ernst & Young and KPMG. It formed in 1998 when Price Waterhouse merged with Coopers & Lybrand. It has offices in 149 countries and provides services such as financial and regulatory reporting and taxes. [1]

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Political contributions

Richard R. Kilgust and Carter R. Pate, both Partners at PricewaterhouseCoopers, were Bush Rangers, each having raised at least $200,000 for Bush in the 2004 presidential election. [2]

PricewaterhouseCoopers gave $904,660 to federal candidates in the 2006 election through its political action committee - 29% to Democrats and 70% to Republicans. [3]

Lobbying

The company spent $3,333,500 for lobbying in 2006. In-house lobbyist as well as six lobbying firms were used including Patton Boggs and Clark & Weinstock. [4]

Personnel

Key executives: [5]

Contact details

300 Madison Avenue, 24th Floor

New York, NY 10017

Phone: 646-471-4000

Fax: 813-286-6000

Web: http://www.pwcglobal.com

References

  1. ↑ PricewaterhouseCoopers Profile, Hoovers, accessed August 2007.
  2. ↑ Pioneers and Rangers, Texans for Public Justice, accessed August 2007.
  3. ↑ 2006 PAC Summary Data, Open Secrets, accessed August 2007.
  4. ↑ PricewaterhouseCoopers lobbying expenses, Open Secrets.
  5. ↑ PricewaterhouseCoopers Key People, Hoovers, accessed August 2007.

Categories: Corporations | United States

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https://en.wikipedia.org/wiki/PriceWaterhouse

PricewaterhouseCoopers (trading as PwC) is a multinational professional services network headquartered in London, United Kingdom. It is the second largest professional services firm in the world, and is one of the Big Four auditors, along with Deloitte, EY and KPMG. Vault Accounting 50 has ranked PwC as the most prestigious accounting firm in the world for seven consecutive years, as well as the top firm to work for in North America for three consecutive years.[5]

PwC is a network of firms in 157 countries, 756 locations, with more than 208,100 people. As of 2015, 22% of the workforce worked in Asia, 26% in North America and Caribbean and 32% in Western Europe. The company's global revenues were $35.4 billion in FY 2015, of which $15.2 billion was generated by its Assurance practice, $8.9 billion by its Tax practice and $11.3 billion by its Advisory practice.[4]

The firm was formed in 1998 by a merger between Coopers & Lybrand and Price Waterhouse.[1] The trading name was shortened to PwC in September 2010 as part of a rebranding.[6]

As of 2016, PwC is the 5th-largest privately owned company in the United States.[7]

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Name:{:(style="margin-right:0.25em"):}:[edit:{]}:

The PricewaterhouseCoopers name was formed by the combination of the names of Price Waterhouse and Coopers & Lybrand, following their merger in 1998. On 20 September 2010, PricewaterhouseCoopers rebranded as PwC, although the legal name of the firm remained PricewaterhouseCoopers.[6]

History:{:(style="margin-right:0.25em"):}:[edit:{]}:

The firm was created in 1998 when Coopers & Lybrand merged with Price Waterhouse.[1] Both firms had histories dating back to the 19th century.

Coopers & Lybrand:{:(style="margin-right:0.25em"):}:[edit:{]}:

In 1854 William Cooper founded an accountancy practice in London, which became Cooper Brothers seven years later when his three brothers joined.[1]

In 1898, Robert H. Montgomery, William M. Lybrand, Adam A. Ross Jr. and his brother T. Edward Ross formed Lybrand, Ross Brothers and Montgomery in the United States.[1]

In 1957 Cooper Brothers; Lybrand, Ross Bros & Montgomery and a Canadian firm McDonald, Currie and Co, agreed to adopt the name Coopers & Lybrand in international practice.[1] In 1973 the three member firms in the UK, US and Canada changed their names to Coopers & Lybrand.[8] Then in 1980 Coopers & Lybrand expanded its expertise in insolvency substantially by acquiring Cork Gully, a leading firm in that field in the UK.[9] In 1990 in certain countries including the UK, Coopers & Lybrand merged with Deloitte Haskins & Sells to become Coopers & Lybrand Deloitte:[1] in 1992 they reverted to Coopers & Lybrand.[10]

Price Waterhouse:{:(style="margin-right:0.25em"):}:[edit:{]}:

By the late 19th century, Price Waterhouse had gained significant recognition as an accounting firm. As a result of growing trade between the United Kingdom and the United States, Price Waterhouse opened an office in New York in 1890,[11] and the American firm itself soon expanded rapidly. The original British firm opened an office in Liverpool in 1904[11] and then elsewhere in the United Kingdom and worldwide, each time establishing a separate partnership in each country: the worldwide practice of PW was therefore a federation of collaborating firms that had grown organically rather than being the result of an international merger.[11]Samuel Lowell Price, an accountant, founded an accountancy practice in London in 1849.[11] In 1865 Price went into partnership withWilliam Hopkins Holyland and Edwin Waterhouse. Holyland left shortly after to work alone in accountancy and the firm was known from 1874 as Price, Waterhouse & Co.[11] (The comma was dropped from the name much later.) The original partnership agreement, signed by Price, Holyland and Waterhouse could be found in Southwark Towers, one of PwC's important legacy offices (now demolished).[12]

In a further effort to take advantage of economies of scale, PW and Arthur Andersen discussed a merger in 1989[13] but the negotiations failed mainly because of conflicts of interest such as Andersen's strong commercial links with IBM and PW's audit of IBM as well as the radically different cultures of the two firms. It was said by those involved with the failed merger that at the end of the discussion, the partners at the table realized they had different views of business, and the potential merger was scrapped.[14]

1998 to present:{:(style="margin-right:0.25em"):}:[edit:{]}:

In 1998, Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers (written with a lowercase "w").[15]

After the merger the firm had a large professional consulting branch, as did other major accountancy firms, generating much of its fees. Management Consulting Services (MCS) was the fastest growing and often most profitable area of the practice, though it was cyclical. The major cause for growth in the 1990s was the implementation of complex integrated ERP systems for multi-national companies. PwC came under increasing pressure to avoid conflicts of interests by not providing some consulting services, particularly financial systems design and implementation, to its audit clients. Since it audited a large proportion of the world's largest companies, this was beginning to limit its consulting market. These conflicts increased as additional services including outsourcing of IT and back office operations were developed. For these reasons, in 2000, Ernst & Young was the first of the Big Four to sell its consulting services, to Capgemini.[16]

The fallout from the Enron, Worldcom and other financial auditing scandals led to the passage of the Sarbanes–Oxley Act (2002), severely limiting interaction between management consulting and auditing (assurance) services. PwC Consulting began to conduct business under its own name rather than as the MCS division of PricewaterhouseCoopers. PwC therefore planned to capitalize on MCS's rapid growth through its sale to Hewlett Packard (for a reported $17 billion) but negotiations broke down in 2000.[17]

In 2000, PwC acquired Canada's largest SAP consulting partner Omnilogic Systems.[18]

In March 2002 Arthur Andersen, LLP affiliates in Hong Kong and China completed talks to join PricewaterhouseCoopers, China.[19]

PwC announced in May 2002 that its consulting activities would be spun off as an independent entity and hired an outside CEO to run the global firm. An outsideconsultancy, Wolff Olins, was hired to create a brand image for the new entity, called "Monday".[20] The firm's CEO, Greg Brenneman described the unusual name as "a real word, concise, recognizable, global and the right fit for a company that works hard to deliver results."[21] These plans were soon revised, however. In October 2002, PwC sold the entire consultancy business to IBM for approximately $3.9 billion in cash and stock. PwC's consultancy business was absorbed into IBM Global Business Services, increasing the size and capabilities of IBM's growing consulting practice.[22]

PwC began rebuilding its consulting practice with acquisitions such as Paragon Consulting Group and the commercial services business of BearingPoint in 2009.[23]The firm continued this process by acquiring Diamond Management & Technology Consultants Inc in November 2010[24] and PRTM in August 2011.[25] In 2012 the firm acquired Logan Tod & Co, a digital analytics and optimisation consultancy,[26] and Ant’s Eye View, a social media strategy development and consulting firm to build upon PwC's growing Management Consulting customer impact and customer engagement capabilities.[27] On October 30, 2013, the firm announced that it would acquire Booz & Company.[28] On November 4, 2013, the firm acquired BGT Partners, a 17-year-old digital consultancy.[29] PwC's Public Sector practice was awarded the Malcolm Baldrige National Quality Award in 2014.[30]

The company currently offers a growing range of enterprise-level software services to meet rising data management challenges.[31]

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