Exxon files lawsuit to block climate proposal from shareholder vote

Exxon files lawsuit to block climate proposal from shareholder vote

Exxon Mobil is suing two activist investors to prevent their proposal to cut emissions at the oil giant from coming to a shareholder vote.

In a complaint filed in the U.S. District Court for the Northern District of Texas on Sunday, Exxon accused investors, Arjun Capital and FollowThis of abusing the process of proposing shareholder votes to advance their own priorities with the votes. , “Calculated to dilute the existing business of the company.”

Arjun had filed a motion for a non-binding settlement in December, urging Exxon to accelerate its plans to reduce its carbon emissions and expand the scope of emissions reductions to include its suppliers and customers. it was done. FollowThis joined in support of the proposal shortly thereafter, according to the complaint.

The proposal does not seek to improve ExxonMobil’s economic performance or create shareholder value, but instead “disrupts and micromanages” the company’s operations, Exxon said in the complaint.

Exxon said it had already planned to include the proposal on the ballot for shareholders at the company’s annual meeting in May, arguing that U.S. securities law allows the company to toss out petitions that “dislike the company.” “deals with matters relating to the general business operations of the Company.” In an unusual twist, the company also sued investors in an attempt to obtain a “declaration” from the judge supporting its move to throw out the offer.

The company said guidance from Securities and Exchange Commission staff was unofficial and could be subject to interpretation. The court’s decision in favor of Exxon could lead to tighter scrutiny of the types of shareholder proposals companies are allowed to vote on in the future.

Exxon said in its lawsuit that follow this in 2022 and follow this in 2023 and similar proposals submitted by Arjun were rejected by a large majority of shareholders.

FollowThis founder Mark Van Baal said in a statement on the firm’s website that the move shows that Exxon “wants to prevent shareholders from exercising their rights.” Azuna did not immediately respond to a request for comment.

Exxon’s complaint comes amid a backlash against climate and related measures, in which some companies and investors have begun to distance themselves from environmental, social and governance — or ESG — initiatives.

Investors withdrew more than $13 billion from ESG funds last year. According to the recent report of Morningstar, The change comes amid a broader market rally in 2023.

ESG issues have also become a hot-button political issue on Capitol Hill and on the campaign trail. Republicans in Congress have proposed measures to restrict investments that take ESG factors into account, and some presidential candidates have vowed to crack down on the movement.

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