Exxon shareholders recently asked a judge to throw out a lawsuit from the oil company which seeks to stop them from pushing the company to consider more environmentally friendly policies.
An overview of the filing in Bloomberg Law said, “[A plaintiff] said in its court filing that the lawsuit isn’t necessary because the proposal has been withdrawn, and both Arjuna and Follow This ‘have agreed not to resubmit the proposal or present it at any future Exxon shareholder meeting. In refusing to dismiss the case following the withdrawal, Exxon has laid bare its true intention—to challenge how the SEC interprets and applies its own proxy proposal rules, without actually confronting the SEC itself,’ the filing said.”
The oil giant, which filed the lawsuit in a Texas court against Arjuna Capital and Follow This, accused the investment firms of overstepping their role. Included in their proposal is a request for Exxon, which is the only Western oil giant without ‘scope 3’ targets, to set such targets and elevate the company’s climate disclosures to its full value chain.
The article continues, “Shareholder activists at the Interfaith Center on Corporate Responsibility last week sent a letter to Exxon’s board asking members to convince the company’s management to end the lawsuit. The letter warned that the suit could set a dangerous precedent for future climate proposals.”
Background: Exxon is suing its own shareholders in an attempt to undermine responsible investing.
Bloomberg: Exxon Suit Seeks Novel Path to Block Shareholder Climate Votes. The Houston oil company is no stranger to pressure from activist investors over its greenhouse gas emissions, facing a shareholder push for greater climate impact targets for three consecutive years. Sunday it went a step further in fighting the pressure by suing activist shareholders Arjuna Capital and Follow This in federal court, hoping to kill the proposal. Some legal observers described the move as possibly the first time that a company has sued an activist investor over a shareholder proposal before initially filing an objection with the Securities and Exchange Commission, which routinely weighs in on whether companies should have to face certain investor bids. The lawsuit comes at the onset of another contentious proxy season over corporate climate goals, risks and disclosures. If a federal judge weighs in on broader environmental and social issues in the Exxon case, shareholder activism lawyers and researchers say, more companies could turn to the courts to beat back proposals on sensitive issues from climate risk to abortion access to gun sales.
Reuters: Activist investors fret over Exxon Mobil’s lawsuit bypassing US regulator. Investors that use shareholder resolutions to pressure companies on environmental and social issues said they are worried that an Exxon Mobil lawsuit bypassing the U.S. securities regulator could undermine their influence. Under appointees of U.S. President Joe Biden, the Securities and Exchange Commission (SEC) has made it more difficult for companies to prevent these resolutions from moving to a shareholder vote by appealing to the regulator. Exxon sidestepped the SEC and filed a lawsuit earlier this month against two shareholders that had put forward a resolution calling on the oil major to set new targets for reducing some of its greenhouse gas emissions.
