Exxon Mobil Corp has taken an unprecedented legal step against its shareholders, including US and Dutch climate activist investors, by filing a lawsuit to prevent a climate proposal from being included in the shareholder voting process. This lawsuit is an aggressive move by Exxon against climate activists who have been using shareholder votes to influence the company’s environmental strategy. The proposal in question, submitted by Follow This and Arjuna Capital, calls for Exxon to accelerate its emission reduction plans, particularly targeting Scope 3 emissions, which are emissions produced by users of Exxon’s oil and gas products.
Despite gaining significant shareholder support in previous years, such proposals have seen a decline in support more recently. Exxon argues that the proposal does not aim to improve the company’s economic performance or create shareholder value, but rather serves the activists’ agenda to diminish the company’s business. The lawsuit is seeking to exclude the proposal on the grounds that it interferes with ordinary business and has been previously rejected by shareholders.
This legal action is notable as Exxon is the only major Western oil company without Scope 3 emission targets. Follow This argues that setting such targets aligns with the Paris Climate Agreement and would create long-term value for shareholders by mitigating risks like losing access to capital markets and facing policy interventions.
The lawsuit has been assigned to U.S. Judge Mark Pittman, a Trump appointee, in a U.S. District Court in Fort Worth. Exxon is not seeking monetary relief from the activist investors but aims to exclude the proposal from its proxy statement, seeking a ruling by March 19 ahead of its annual shareholder meeting in May.