Energy giant Exxon Mobil is seeking to exclude environmentalist activist shareholders from an upcoming meeting in May, arguing their proposal to curb emissions could jeopardize the company’s financial well-being.
The oil behemoth filed a complaint against Arjuna Capital and Follow This in the U.S. District Court for the Northern District of Texas, contending that their initiative does “not seek to improve ExxonMobil’s economic performance or create shareholder value.” Rather, the corporation sees the non-binding resolutions advanced by the two activist investment firms as “constraining and micromanaging” and “calculated to diminish the company’s existing business.”
“Defendants are asking Exxon Mobil to change its day-to-day business by altering the mix of — or even eliminating — certain of the products that it sells,” the Houston-based company explained in their lawsuit. Ultimately, the objective is “to force Exxon Mobil to change the nature of its ordinary business or to go out of business entirely,” the complaint added.
Arjun Capital and Follow This are advocating Exxon Mobil adopt Scope 3 emission benchmarks in a bid to reduce the company’s carbon footprint. The company is the last of the five oil majors who have yet to adopt such measures, according to Reuters. In the preceding two years, the wire service notes, similar proposals garnered only 10 percent and 28 percent of shareholder approval, respectively.
“With this remarkable step, ExxonMobil clearly wants to prevent shareholders using their rights,” Follow This founder Mark van Baal said in a statement. “Apparently, the board fears shareholders will vote in favor of emissions reductions targets.”
Arjuna Capital’s managing partner Natasha Lamb defended the motion asserting: “We have a fundamental right and duty to voice concern over climate risk, its impacts on the global economy and shareholder value.”
On Monday, Judge Mark Pittman, a Trump-appointed justice, was assigned to the case. Pittman notably struck down President Joe Biden’s student loan bailout plan and a Texas handgun ban on 18-year-olds.