Exxon Mobil Corp, a major oil and gas corporation, has initiated legal action to block a climate change proposal submitted by activist investors. This lawsuit, filed in a Texas court, aims to prevent the proposal from being voted on during Exxon’s shareholder meeting in May.
Background of the Climate Proposal
The proposal, led by U.S. activist investment firm Arjuna Capital and the shareholder activist group Follow This, calls for Exxon to establish Scope 3 emissions targets. These targets would address emissions generated by the end-users of Exxon’s products. Notably, Exxon is the only one among the top five Western oil majors without such targets.
Exxon has chosen to file its complaint in the U.S. District Court for the Northern District of Texas, differing from the usual jurisdiction of the Southern District where Exxon is based. The case has been assigned to U.S. District Judge Reed O’Connor, known for his conservative rulings, including a notable decision against the Affordable Care Act.
Exxon’s Stance and Investor’s Arguments
Exxon argues that the investors’ proposals, which have been presented and voted on in the past, are driven by an extreme agenda and do not align with the long-term interests of shareholders. Meanwhile, Follow This advocates that investing in energy transition and setting Paris-aligned targets is crucial for the company’s future, highlighting the risks of not adapting to changing market and regulatory environments.
With the annual shareholder meeting scheduled for May 29, Exxon is seeking a resolution by March 19, as their proxy statement must be filed by April 11. The outcome of this legal challenge could have significant implications for corporate governance and environmental policy in the energy sector.
This legal maneuver by Exxon Mobil represents a critical juncture in the ongoing debate between major energy companies and their shareholders over environmental responsibility and climate change strategies.