Feb 5, 2024 - Energy & Environment

Exxon presses ahead with battle against activist investors

Illustration of a gavel with an oil barrel as the head.

Illustration: Aïda Amer/Axios

Exxon is pressing on — at least for now — with litigation against activist shareholders pushing the firm to set tougher climate targets, even though they withdrew the resolution that sparked the conflict.

Why it matters: Filed in a Texas district court, the unusual federal lawsuit is a new wrinkle in environmental and social governance (ESG) if it continues — or if the prospect of costly legal fights deters more advocacy.

  • Companies typically work through the SEC on which proposals may be excluded from shareholder votes.

State of play: Arjuna Capital and the group Follow This withdrew the action.

  • Arjuna, in a statement, accused Exxon of "intimidation" and "circumventing" the SEC process by going directly to court, adding it will "result in silencing investors that voice climate-risk concerns."

The other side: Exxon's lawsuit alleges activists abuse the proxy process with resolutions designed to diminish the company, instead of improving it or creating shareholder value.

  • "We believe there are still important issues for the court to resolve. There is no change to our plans, the suit is continuing and we're evaluating our options," spokeswoman Emily Mir said in a statement.

What's next: A federal judge wants an Exxon status update by today explaining "what outstanding claims or issues are before the Court in this action."

  • Judge Mark Pittman's filing says he "struggles to see what the ongoing case or controversy is in this matter" now that the resolution won't come up.
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