ExxonMobil thwarts green activists’ effort to request a vote on strategy.
ExxonMobil successfully prevented a group of climate activists from pushing for a vote on the company’s climate strategy at its upcoming annual shareholder meeting.
A group of environmentally-minded Dutch investors, known as Follow This, has withdrawn their request for Exxon shareholders to vote on implementing emission reduction goals. This decision comes after Exxon initiated legal proceedings against the proposed plans.
The company unexpectedly filed a grievance at a US district court in Texas in the previous month, with the intention of stopping the activists from proposing new climate goals for a vote at the company’s annual shareholder meeting in May.
This was the initial instance in which Exxon attempted to use legal means to prevent shareholder activists. It was believed that this action was closely observed by American corporations and shareholders.
The creator of Follow This, Mark van Baal, stated that due to Exxon’s choice to engage in a legal battle instead of allowing shareholders to vote at their annual meeting, they have chosen to retract their climate proposal. With the withdrawal of the proposal, there is no longer a need for the company to pursue the lawsuit.
Exxon contended that the Follow This proposal, co-sponsored by Arjuna Capital, went against the SEC’s guidelines for investor petitions. These guidelines aim to prevent shareholders from excessively influencing a company’s decisions through proposals.
The company accused Follow This and Arjuna of having a biased agenda and stated that their suggestions were designed to decrease the company’s current operations.
In 2023, Exxon announced a record annual profit of $36 billion, the second highest in the past ten years. This was a 35% decrease from the previous year’s profit of $55.7 billion, which remains the highest profit to date. The decline in profit can be attributed to the decrease in oil and gas prices, which were at their peak in 2022 after Russia’s invasion of Ukraine. On average, the global oil price was $81 per barrel in 2023, compared to $100 per barrel in the previous year.
Exxon has faced criticism for increasing its production of oil and gas despite being advised by experts to address the pressing issue of climate change. The company has committed to achieving net zero emissions from its own operations by 2050. However, unlike other western oil companies, it has not established specific targets for reducing its scope 3 emissions, which are emissions caused by the burning of its oil and gas.
The company has requested that the court enforce the SEC’s proxy rules as written in order to prevent this misuse and reduce the burden of addressing it.
Some companies have urged the SEC to limit the number of motions filed by environmental groups at annual shareholder meetings, citing a reversal of policies put in place by the Trump administration.