Think fiery oil-company AGMs are a long way off? Well, The flare-ups have already started.
The first volleys have been fired in what has become an annual series of skirmishes between environmental activists and oil companies as the latter’s annual shareholder meetings approach.
In this case, it’s one of the usual suspects, ExxonMobil XOM 0.00%↑, which has filed a lawsuit to block a vote on a climate resolution brought by Follow This, a Dutch green activist investor group and U.S. activist investment firm Arjuna Capital, that called for Exxon to accelerate its attempts to cut greenhouse gas emissions.
MORE: ExxonMobil: Top Companies Causing Climate Change
MORE: How To Lose Money On The Climate Crisis – Buy Oil Stocks
According to The Guardian, the Texas-based behemoth — which had a much-noted tussle with activist hedge fund Engine No. 1 in 2021 that resulted in three replacements on the oil giant’s board — filed the suit at a U.S. district court in the Lone Star State on Sunday, arguing that the proposal violates Securities and Exchange Commission (SEC) investor petition rules. It asked the court to make a decision by March 19, well before its annual meeting on May 29.
The scuffling may be familiar, but not its form — this is the first time Exxon is seeking to exclude a shareholder proposal by filing a complaint in court, with the company saying the investors are “driven by an extreme agenda” and that their proposals do not serve investors’ interests or promote long-term shareholder value. In this case, Follow This and Arjuna are asking Exxon and other oil majors to adopt tighter climate targets, calling on Exxon to set so-called Scope 3 targets to reduce emissions produced by users of its products, reports Reuters. Exxon is the only one of the five Western oil majors which does not have such goals.
The company, which in early 2022 announced plans to reach net zero for Scope 1 and 2 emissions, may well succeed — the case has been assigned to U.S. District Judge Reed O’Connor, an appointee of President George W. Bush who has a track record of ruling in favor of conservative litigants challenging laws and regulations governing guns, LGBTQ rights and healthcare.
If, as might be the case, that this prevents future petitions by activist investors, it would be a game-changer.
