ExxonMobil has quashed an attempt by a group of climate activists to seek a vote on the US oil company’s climate strategy at its annual shareholder meeting later this year.
A Dutch green activist investor group, Follow This, has dropped its petition for Exxon shareholders to vote on whether the company should set emissions reduction targets after Exxon took legal action against the plans.
In a surprise move, the company filed a complaint at a US district court in Texas last month, which sought to prevent the activists from putting new climate targets to a vote at the company’s shareholder meeting in May.
It was the first time Exxon had sought a legal route to block shareholder activists, and the move was understood to have been closely watched by US corporations and shareholders.
Mark van Baal, the founder of Follow This, said: “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. Now that we have withdrawn, the company has no reason to continue the lawsuit.”
Exxon argued that the Follow This proposal, which it put forward alongside Arjuna Capital, violated the SEC’s investor petition rules, which are designed to prevent shareholders being able to “micromanage” businesses’ decisions through proposals.
The company said that Follow This and Arjuna were “driven by an extreme agenda” and that their proposals were “calculated to diminish the company’s existing business”.
Exxon reported one of its largest annual profits of the last decade of $36bn (about £28.4bn) for 2023, which was the second-highest profit only to its $55.7bn profit for the year before. The 35% slump in profit was due to falling oil and gas market prices which peaked in 2022 following Russia’s invasion of Ukraine. The global oil price averaged about $81 a barrel last year compared with $100 a barrel the year before.
Exxon has come under fire for producing more oil and gas despite warnings from experts around the urgent need to tackle the climate crisis. It has set a goal to reduce emissions from its own operations to net zero by 2050. But unlike other western oil companies, it has stopped short of setting reduction targets for the emissions created by burning its oil and gas, known as scope 3 emissions.
The company said: “We are simply asking the court to apply the SEC’s proxy rules as written to stop this abuse and eliminate the significant resources required to address them.”
The SEC has come under pressure from some companies for allowing environmental groups to register what they believe to be too many motions at annual shareholder meetings, after it revoked policies adopted by the Trump administration.
