Exxon sues over investors’ climate proposal
Exxon Mobil Corp. filed a lawsuit Sunday against two of its own shareholders, asking the court to block a proposal by activist investors aimed at cutting the oil giant’s emissions.
Two of Exxon Mobil’s shareholders, environmentalist investor groups Follow This and Arjuna Capital, put forth a motion in December that would force a vote on their proposal to set reduction targets for Scope 3 emissions, or emissions created by the company’s products on the consumer end. Exxon Mobil is the only one of the five major Western oil companies — Shell, BP, Chevron, TotalEnergies and itself — without Scope 3 targets.
In the lawsuit, filed in the Northern District of Texas, Exxon Mobil argued the proposal is a violation of Securities and Exchange Commission (SEC) rules and asked the court to block it by March 19. The company’s annual meeting, where the motion will receive a vote if it is not blocked, is set for May 29.
“The breakdown of the shareholder proposal process, one that allows proponents to advance their agendas through a flood of proposals, does not serve the interests of investors,” an Exxon Mobil spokesperson told The Hill in a statement. “We are simply asking the court to apply the SEC’s proxy rules as written to stop this abuse and eliminate the significant resources required to address them.”
Follow This, a Dutch activist investor group, has previously filed Scope 3 proposals for the other four major firms.
“With this remarkable step, ExxonMobil clearly wants to prevent shareholders using their voting rights,” Follow This founder Mark van Baal said in a statement. “Apparently, the board fears investors will vote in favor of emissions reduction targets. It seems that ExxonMobil is afraid of its shareholders.”
The lawsuit comes amid a period of mounting conservative backlash against corporate environmental and sustainable governance practices, including frequent denunciation of the practice by Republican officials, and 12 state laws restricting it in 2023. The case has been assigned to Judge Mark Pittman, an appointee of former President Trump who has previously ruled against the Biden administration’s student loan forgiveness and a Texas law that banned adults under 21 from carrying concealed handguns.
The Hill has reached out to Arjuna Capital for comment.
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