Exxon Says ESG Investors Backing Off Ballot Climate Proposal (3)

Two groups of Exxon Mobil Corp. investors have backed off a proposal to push the company to cut emissions during its May shareholder meeting, the Texas oil giant said in a court filing.

In light of the investors’ change of plans, Exxon is withdrawing its request for an expedited hearing to block them, the company said in a statement on Friday. Exxon, however, will continue to pursue the lawsuit.

“We believe there are still important issues for the court to resolve,” Emily Mir, a spokesperson for Exxon, said in an emailed statement.

Exxon last week sued the two investor groups, Arjuna Capital and Follow This, in federal court in Fort Worth, Texas, accusing of them of having an “extreme agenda” and alleging that they “became shareholders solely to campaign for change through shareholder proposals that are calculated to diminish the company’s existing business.”

Read More: Exxon Sues ESG Investors to Stop Climate Proposals on Ballot

The investor groups submitted a proposal last year calling for a “further accelerating” of Exxon’s emissions-reduction plans.

“Given Exxon’s preference to fight a battle in court rather than allow shareholders the freedom of a vote at its annual meeting, we decided to withdraw the climate proposal,” Mark van Baal, founder of Follow This, said in a statement. “Now that we have withdrawn, the company has no reason to continue the lawsuit.”

Arjuna Capital also urged Exxon to not to proceed with the court case, while accusing the company of trying to silence investors concerned about the climate.

“Not only is the company side-stepping a critical corporate accountability mechanism that has upheld shareholder freedoms for decades, this amounts to tactics of intimidation and bullying,” Natasha Lamb, chief investment officer at Arjuna Capital, said in a statement.

Exxon Chief Executive Officer Darren Woods said the groups are not true investors.

“These are activists masquerading as investors,” Woods said during in an interview on CNBC. “We’re trying to get back to focusing this on legitimate investors who have legitimate issues or concerns that they want the broader shareholder base to speak on.”

There’s a huge cost in responding to the groups’ proposals and they don’t represent the issues at hand, he said. Exxon’s filing was reported earlier by Reuters.

The case is Exxon Mobil Corporation v. Arjuna Capital LLC, 24-cv-00069, US District Court, Northern District of Texas (Fort Worth).

(Updates with Follow This, Arjuna comments)

--With assistance from Laura Hurst.

To contact the reporters on this story:
Robert Burnson in San Francisco at rburnson@bloomberg.net;
David Wethe in Houston at dwethe@bloomberg.net

To contact the editors responsible for this story:
Misyrlena Egkolfopoulou at megkolfopoul@bloomberg.net

James Herron

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