Exxon takes unusual legal action to block shareholder climate proposals

77 views
Oil company ExxonMobil has sued climate activist investors in a bid to stop their climate bid from going to a vote at its annual investor conference.
Oil company ExxonMobil has sued climate activist investors in a bid to stop their climate bid from going to a vote at its annual investor conference.

Oil company ExxonMobil has sued climate activist investors in a bid to stop their climate bid from going to a vote at its annual investor conference.

Incident Overview:

Exxon, the Texas-based oil and gas giant, has filed a complaint to block climate-related shareholder proposals put forth by Follow This and Arjuna Capital. The investors are urging Exxon to accelerate its reduction in greenhouse gas emissions. 

Exxon argues that the investors have an “extreme agenda,” marking the first time the company has taken legal action to thwart shareholder motions. If successful, this legal move could set a precedent affecting future shareholder petitions.

Rare Court Action:

Companies typically engage in discussions with the Securities and Exchange Commission (SEC) regarding shareholder proposals. Legal action to block such motions is uncommon. 

Exxon’s decision to pursue legal measures reflects its resistance to the proposed climate-related resolutions and could have implications for future interactions between companies and shareholders.

Exxon’s Position and SEC Rules:

Exxon contends that the proposals by Follow This and Arjuna Capital violate SEC rules for investor petitions. 

The company currently aims to achieve net-zero emissions by 2050 for Scope 1 and Scope 2 emissions but lacks specific targets for Scope 3 emissions—those produced by users of its oil and gas. Exxon argues that the shareholder proposal process has broken down and does not serve investors’ interests.

Scope 3 Targets:

Follow This and Arjuna Capital are advocating for Exxon to establish Scope 3 targets, addressing emissions from the use of its oil and gas by consumers. 

While Exxon is not the only major oil company without Scope 3 targets, the investors’ proposal seeks to push the company further on climate-related commitments.

Legal Proceedings and Timeline:

Exxon is seeking a court decision in the US district court in Texas to exclude the Scope 3 proposal from its proxy statement. The company aims to secure a decision by March 19, ahead of its annual shareholder meeting on March 29. 

The outcome of this legal action could have broader implications for shareholder activism on climate-related issues.

Exxon’s move to legally challenge climate-related shareholder proposals underscores the increasing tensions between some major corporations and investors advocating for more ambitious climate action. 

The outcome of this case will be closely watched for its potential impact on future engagements between companies and shareholders on environmental issues.

Gary Monroe

Gary Monroe is a seasoned contributor to the Los Angeles Business Magazine, where he offers insightful analysis on local business trends and economic developments. With a focus on Los Angeles' dynamic commercial landscape, Gary's articles provide valuable perspectives for entrepreneurs and business professionals in the city.

Leave a Reply

Your email address will not be published.

Previous Story

Ofcom to outline options for Royal Mail evolution amid financial challenges

Next Story

UK borrowing in December falls, creating room for potential tax cuts

Latest from BUSINESS

withemes on instagram

This error message is only visible to WordPress admins

Error: No feed found.

Please go to the Instagram Feed settings page to create a feed.