Financial Times | Follow This shareholder group had called on US company to set more ambitious climate targets.
Investors have withdrawn a climate resolution at ExxonMobil after the oil supermajor took legal action against the groups, in a development likely to have a chilling effect on shareholder activism.
Follow This, an Amsterdam-based green shareholder group, said that in response to the lawsuit filed by Exxon last week, it had decided to abandon its call for the company to set more ambitious climate targets. “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,” founder Mark van Baal said in a statement on Friday.
The decision not to continue pushing for a shareholder vote on the resolution comes after Exxon took the unusual step of suing Follow This and its co-filer, investment adviser Arjuna Capital, to block the motion, arguing that it breached Securities and Exchange Commission guidelines.
Activists have filed motions against companies ranging from Wall Street banks to Big Tech groups in recent years, calling on them to take stronger positions on environmental, social and governance matters.
Companies rarely go to court to block shareholder motions and Exxon’s case marks the first time it has done so. Instead, they usually appeal to the SEC for permission to remove unwanted resolutions from the ballot.
But Exxon argued that the SEC had become too willing to allow such motions to proceed to a vote. Exxon said it had withdrawn a request for an expedited hearing of its case but that it was not dropping the case. “We believe there are still important issues for the court to resolve. There is no change to our plans, the suit is continuing,” it said in a statement.
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