The Earth is heating up. No doubt. And one of the chief reasons the Earth is heating up is the consumption of oil and natural gas to power and produce things. Naturally. It makes sense, then, that a pair of activist investor groups would suggest that ExxonMobil Corp., the world’s largest privately owned oil company, do something to help cut down on all that consumption. ExxonMobil responded by suing the groups in US federal court, a very expensive, vehement Uh, no.
The case, filed in federal district court in Texas, stems from the latest in a yearslong series of shareholder proposals by the Dutch-based collective Follow This and the US-based Arjuna Capital. The proposal, which other shareholders would vote on at Exxon’s annual meeting in May, would force the company to take more responsibility for all the greenhouse gas emissions released by the end users of its products. Though the oil giant has pledged to cut its own global emissions to net zero by 2050, those efforts only cover Exxon’s actions and not those of its customers. Follow This made similar proposals in 2022 and 2023 that shareolders overwhelmingly voted down in both cases.
Showdown looming
Exxon said it had taken the extreme action, the first time in corporate history it has ever sued to block a shareholder measure, because the groups were “driven by an extreme agenda” that put climate goals ahead of its ability to make money. Plus, it doesn’t want to keep having to reject the same unpopular request year after year. But Follow This, which argues that time is running out to address climate change and that such proposals are finding increasing levels of support at other oil companies, is itching for a fight.
“With this remarkable step, ExxonMobil clearly wants to prevent shareholders using their voting rights,” Mark van Baal, founder of Follow This, said in a statement. “Apparently, the board fears investors will vote in favour of emissions reduction targets. It seems that ExxonMobil is afraid of its shareholders.”
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