California attorney general accuses Exxon Mobil of deception in plastic recycling claims

Exxon Mobil Corp (NYSE: XOM) is under scrutiny following a lawsuit filed by California’s Attorney General, Rob Bonta, who accuses the energy giant of misleading the public about its plastic recycling efforts.

Bonta claims that Exxon has employed “slick marketing” tactics to promote the idea that it is effectively recycling the plastic it produces, a claim he argues is fundamentally false.

The lawsuit, filed in San Francisco, highlights the disconnect between Exxon’s public narrative and its actual practices, suggesting that the company has manipulated consumer perceptions to drive profits over the decades.

In an interview on CNBC’s “Squawk Box,” Bonta criticized Exxon’s marketing strategies.

He said that the company made consumers believe that their reliance on single-use plastics was supported by effective recycling systems.

Despite this perception, Exxon reportedly recycles only 1% of the plastic it produces.

The remaining 99% ends up in landfills, incinerators, or contributes to environmental pollution, Bonta argued.

This practice, he asserts, represents a “decades-long deception” that exacerbates the global pollution crisis.

Allegations of ineffective recycling technology

Bonta specifically targeted Exxon’s so-called advanced recycling technology, labeling it a “sham.”

He revealed that a substantial portion of the recycled material—92%—is converted into jet fuel, which is burned and releases harmful emissions into the atmosphere.

This raises serious questions about the effectiveness of Exxon’s recycling claims and their impact on environmental sustainability.

As a result of these allegations, Exxon’s stock has shown volatility, dipping into the red on the day of the lawsuit announcement, despite being up approximately 20% from its year-to-date low.

Exxon Mobil’s response to the lawsuit

In response to the lawsuit, Exxon Mobil issued a statement defending its practices.

The company criticized California officials for failing to address the inefficiencies in the recycling system.

Exxon claimed to have “processed over 60 million pounds of plastic waste into usable raw materials, keeping it out of landfills.”

The company asserted that it is committed to providing real solutions to the plastic waste crisis and accused the California attorney general of choosing litigation over collaboration to resolve the issue.

This legal battle comes shortly after Exxon reported impressive second-quarter financial results, surpassing analysts’ expectations thanks to record production in regions like Guyana and the Permian Basin.

Currently, Wall Street maintains an “overweight” rating on Exxon shares, with analysts projecting an average price target of $130, suggesting a potential upside of over 10% from the current price.

As this story develops, the implications for Exxon’s reputation and financial performance remain to be seen.