ExxonMobil has initiated legal action to block a climate change proposal put forward by activist investors from being voted on at the company’s shareholder meeting slated for May.
The proposal, spearheaded by US investment firm Arjuna Capital and the shareholder activist group Follow This, calls for Exxon and other leading oil companies to implement stricter climate objectives.
This marks the first occasion Exxon has resorted to legal proceedings to exclude a shareholder proposal.
Exxon, as reported by Reuters, contends that the investors are “driven by an extreme agenda”, and argued that their recurrent proposals neither align with the investors’ interests nor enhance long-term shareholder value.
The activists are pressing Exxon to establish so-called Scope 3 targets, which aim to reduce emissions generated by the end-users of its products.
Among the top five Western oil majors, Exxon stands alone in not having set such targets, reported the news agency.
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Over the past two years, Follow This has presented similar proposals at the shareholder meetings of various oil majors.
These proposals garnered 28% support in the 2022 voting and 10% the previous year.
Exxon maintains that shareholders have rejected Scope 3 targets and, therefore, seeks to omit the proposal from its proxy statement.
According to Exxon, Arjuna and Follow This adopt a strategy of acquiring shares with the sole purpose of campaigning for changes that are “calculated to diminish the company’s existing business”.
Neither Arjuna nor Follow This were available to provide comments on the lawsuit, the publication said.
The case has been entrusted to US District Judge Reed O’Connor, an appointee of former US President George W Bush, based in Fort Worth.
Exxon is pursuing a resolution by 19 March 2024, as it must file its proxy statement by 11 April 2024 to be prepared for its annual shareholder meeting on 29 May 2024.
The legal move comes on the heels of Exxon’s recent signing of a long-term liquified natural gas supply agreement with Mexico Pacific.