ExxonMobil Is Suing Investors Who Want Faster Climate Action

An anonymous reader quotes a report from NPR: ExxonMobil faces dozens of lawsuits from states and localities alleging the company lied for decades about its role in climate change and the dangers of burning fossil fuels. But now, ExxonMobil is going on the offensive with a lawsuit targeting investors who want the company to slash pollution that's raising global temperatures. Investors in publicly-traded companies like ExxonMobil try to shape corporate policies by filing shareholder proposals that are voted on at annual meetings. ExxonMobil says it's fed up with a pair of investor groups that it claims are abusing the system by filing similar proposals year after year in an effort to micromanage its business. ExxonMobil's lawsuit points to growing tensions between companies and activist investors calling for corporations to do more to shrink their climate impact and prepare for a hotter world. Interest groups on both sides of the case say it could unleash a wave of corporate litigation against climate activists. It is happening at a time when global temperatures continue to rise, and corporate analysts say most companies aren't on track to meet targets they set to reduce their heat-trapping emissions. "Exxon is really upping the ante here in a big way by bringing this case," says Josh Zinner, chief executive of an investor coalition called the Interfaith Center on Corporate Accountability, whose members include a defendant in the ExxonMobil case. "Other companies could use this tactic not just to block resolutions," Zinner says, "but to intimidate their shareholders from even bringing these [climate] issues to the table." ExxonMobil said in an email that it is suing the investor groups Arjuna Capital and Follow This because the U.S. Securities and Exchange Commission (SEC) isn't enforcing rules governing when investors can resubmit shareholder proposals. A court is the "the right place to get clarity on SEC rules," ExxonMobil said, adding that the case "is not about climate change." Other corporations are watching ExxonMobil's case, says Charles Crain, a vice president at the National Association of Manufacturers, which represents ExxonMobil and other industrial companies. "If companies are decreasingly able to get the SEC to allow them to exclude proposals that are obviously politically motivated, then the next question is, well, can the courts succeed where the SEC has failed -- or, more accurately, not even tried?," Crain says. "The shareholder proposal from Arjuna and Follow This called for ExxonMobil to cut emissions faster from its own operations and from its supply chain, including the pollution that's created when customers burn its oil and natural gas," notes NPR. "That indirect pollution, known as Scope 3 emissions, accounts for 90% of ExxonMobil's carbon footprint." "ExxonMobil says it is committed to cutting emissions from its operations. But the idea that activist investors like Arjuna and Follow This can quickly push the company out of the oil and gas business with new climate policies is 'simplistic and against the interests of the vast majority of ExxonMobil shareholders,' the company said in a court filing in Texas." The company added that while shareholders are entitled to submit proposals, they don't have "an unlimited right to put forth any proposal to do anything." "Their intent is to advance their agenda rather than creating long-term value for shareholders," ExxonMobil said of Arjuna and Follow This.

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