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Exxon Shareholder Lawsuit Dismissed

The Texas District Court has dismissed oil and gas major ExxonMobil’s lawsuit against shareholders over a resolution asking the company to set medium-term decarbonisation targets. The judge concluded that Exxon’s challenge was moot, as activist group Follow This and asset manager Arjuna Capital withdrew the proposal and promised not to resubmit again. “Exxon’s insistence on litigating abstract future potentialities lends credence to Arjuna’s arguments regarding [its] motives,” Judge Mark Pittman remarked in the court order. Investors have been concerned that Exxon chose the path of litigation to undermine the authority of the US Securities and Exchange Commission (SEC) and discourage other shareholders from challenging the company on its climate ambitions. “The dismissal of Exxon’s lawsuit against shareholders is a victory for all investors who want to safeguard the long-term future of US oil and gas companies and the global economy in view of the climate crisis,” said Mark van Baal, Founder of Follow This. “The right for shareholders to file proposals has not been compromised, as no precedent about the application of the SEC rules and use of shareholder rights has been created, which was the ultimate goal of pulling our proposal. The dismissal stalls Exxon’s attack on the rights of all shareholders to table proposals about emissions – the root cause of the climate crisis,” van Baal explained. If the case had been allowed to continue, it would have had a detrimental effect on climate-focused shareholder proposals in the future and prevented investors from effecting change to protect the long-term health of portfolio companies, he added.

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