ExxonMobil, one of the major oil and gas companies, has initiated legal proceedings in a Texas court to challenge a climate proposal presented by activist investors.
The move aims to prevent the proposal from proceeding to a vote during the company’s upcoming shareholder meeting scheduled for May.
This marks a notable development as it is the first instance of Exxon seeking to exclude a shareholder proposal through legal means. The complaint filed in court contends that the investors pushing for stricter emission goals, led by Arjuna Capital and shareholder activist group Follow This, are motivated by an “extreme agenda.” Exxon asserts that embracing such emission targets would be detrimental to its business and share value.
The investors are advocating for Exxon and other major oil companies to adopt more stringent climate targets.
Specifically, they are urging Exxon to establish Scope 3 targets, focusing on reducing emissions produced by the users of its products. Among the five Western oil majors, Exxon is unique in not having such targets in place.
Similar proposals were made by these investors in the shareholder meetings of different oil majors in 2021 and 2022, with only a minority of shareholders supporting them. Recently, a group of 27 investors, including Follow This, which collectively owns approximately 5 per cent of Shell’s shares, filed a similar independent climate resolution to be presented at Shell’s upcoming shareholder meeting.
Exxon is seeking the exclusion of the Scope 3 proposal from its proxy statement, which is required to be filed by April 11 for its annual shareholder meeting in May.
The company argues that Arjuna and Follow This employ a strategy “to become shareholders solely to campaign” for changes calculated to diminish Exxon’s existing business.
