Exxon Mobil filed a lawsuit on Sunday in a Texas court that seeks to block activist investors from bringing a climate proposal up for a vote during the company’s shareholder meeting in May.
The lawsuit marks the first time Exxon has moved to block a shareholder proposal through a court complaint. The case was assigned to the U.S. District Court for the Northern District of Texas and has been assigned to Judge Reed O’Connor, an appointee of former President George W. Bush who has a record of ruling in favor of conservative litigants.
Exxon says the investors are "driven by an extreme agenda" and that their repeated proposals don’t serve the best interests of investors or promote long-term shareholder value. The company is asking the court to allow it to exclude the activist shareholders’ proposal from its proxy statement.
Activist investment firm Arjuna Capital and shareholder activist group Follow This are pushing for Exxon shareholders and those at other oil companies to vote on tighter climate targets.
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They’re calling for Exxon to adopt so-called Scope 3 targets to reduce emissions produced by users of its products. Of the five Western major oil companies, Exxon is the only company that doesn’t have such targets.
Follow This put forward similar proposals in shareholder meetings of other oil majors in the last two years, receiving 28% approval in 2022 and 10% in 2023.
Exxon argues that because shareholders have already rejected Scope 3 it should be able to exclude the proposal from its proxy statement.
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Last year, Follow This said that investing in the energy transition and setting a Paris-aligned medium-term target covering Scope 3 would be in shareholders’ best interest.
It said that goals would prevent risks of losing access to capital markets, of facing policy interventions and incurring losses associated with stranded assets.
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Exxon is seeking relief by March 19 in advance of a pair of key deadlines later this spring, as the company’s proxy statement has to be filed by April 11 in time for its annual shareholder meeting on May 29.
Reuters contributed to this report.
