Activist Investors Sue Exxon Mobil To Prevent Climate Change Proposals

(CTN News) – A lawsuit was filed by Exxon Mobil against Americans and Dutch activists who wanted to submit climate proposals to the company’s annual meeting.

This is the latest step in an intensifying battle between environmentalists and oil companies.

A complaint was filed Sunday in the Northern District of Texas against Arjuna Capital and Follow This, an activist investor group based in Amsterdam.

There is a risk that a win for Exxon Mobil could chill shareholder petitions in the future.

During the past two proxy seasons, the Securities and Exchange Commission, the U.S. financial regulator, has overseen an increasing number of environmental and social shareholder proposals.

Exxon Mobil stated in an emailed statement that “the breakdown of shareholder proposals does not serve investors’ interests.”

“We are simply asking the court to apply the SEC’s proxy rules as written so this abuse can be stopped and significant resources can be saved.”
According to the oil major, both Arjuna Capital and Follow This submit shareholder proposals to undermine the company’s business.

By April 11, Exxon Mobil must file its proxy statement, so it needs the court’s relief by March 19. A shareholder meeting is scheduled for May 29 at the Houston-based company. Follow This’ Mark van Baal said, “ExxonMobil clearly wants to prevent shareholders from exercising their rights.” “Apparently, the board fears shareholders will support emissions reduction targets.”

The writing on the wall may have caught their attention, he said. As part of Exxon Mobil’s shareholder rights and SEC regulations, Follow This and Arjuna Capital filed a proposal, commonly known as a climate resolution. In response to a inquiry, Arjuna Capital did not respond immediately.

Exxon Mobil says it supports measures to reduce emissions, and the lawsuit is not relevant to environmental, social, and corporate governance issues. According to the lawsuit, the oil major intends to fix what it calls an abused process.

Emissions under Scope 3

The Arjuna Capital and Follow This organizations are pressuring oil majors to set Scope 3 targets for reducing greenhouse gas emissions.

Scope 3 emissions come from a company’s entire value chain, and often account for the majority of a company’s carbon footprint.

In contrast, Scope 1 emissions result from the direct production of a firm’s energy, while Scope 2 emissions result from the indirect production of that energy.

Exxon Mobil plans to reach net zero emissions for Scope 1 and Scope 2 by 2050. As of last year, the company’s shareholders overwhelmingly rejected calls for stronger measures to mitigate climate change, and the company’s target excludes Scope 3 emissions.

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