June 13, 2024

Exxon files lawsuit against investors’ climate proposal

By Sabrina Valle

HOUSTON (Reuters) – Exxon Mobil Corp on Sunday filed a complaint in a Texas court seeking to prevent a climate proposal by activist investors from going to a vote during the company’s shareholder meeting in May.

This is the first time Exxon is seeking to exclude a shareholder proposal by filing a complaint in court. It says the investors are “driven by an extreme agenda” and that adopting stricter emission goals would be detrimental to its business and share value.

Investors led by Arjuna Capital and shareholder activist group Follow This are asking Exxon and other oil majors to adopt tighter climate targets.

They want Exxon to set so-called Scope 3 targets to reduce emissions produced by users of its products. Exxon is the only one of the five Western oil majors which does not have such targets.

Follow This in 2021 and 2022 made similar proposals in shareholder meetings of different oil majors. Only a minority of shareholders supported them.

Last week, a group of 27 investors including Follow This which own around 5% of Shell’s shares has co-filed a similar independent climate resolution to be brought to a vote during the company’s shareholder meeting later this year.

Exxon is asking a judge in the U.S. District Court for Northern District of Texas to exclude the Scope 3 proposal in its proxy statement. The statement needs to be filed by April 11, in time for its annual shareholder meeting on May 29.

Exxon says Arjuna and Follow This pursue a strategy to “become shareholders solely to campaign” for changes “calculated to diminish the company’s existing business.”

Follow This said last year that setting a Paris-aligned medium-term target covering Scope 3 is paramount for the company’s long-term interest in the face of climate change.

(Reporting by Sabrina Valle; Editing by Richard Chang)

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