PRESS RELEASE
Shareholder democracy still under attack as Exxon can continue circumventing the SEC to seek court ruling against climate proposals
The Texas District Court announced on Wednesday that it will not dismiss Exxon’s lawsuit against the shareholder proposal filed by Arjuna Capital and Follow This. The judge does not consider the case moot after the shareholders withdrew the proposal. However, the judge dismissed Follow This, citing that a Dutch association was not a proper party to the case because of lack of personal jurisdiction. The case will proceed to conclusion with Arjuna only. The climate proposal supports the company to reduce greenhouse gas (GHG) emissions.
“We respect the judge’s decision, but we are disappointed that the case will continue,” responds Mark van Baal, founder of green shareholder group Follow This, “Arjuna Capital will be on trial, but this is a lawsuit against all responsible investors who want to mitigate the impact of devastating climate change on their assets.”
Exxon’s true goal
“We are disappointed that Exxon can continue its attack on the rights of all shareholders to table proposals about emissions, the root cause of the climate crisis. Exxon’s true goal is to circumvent the SEC to seek a court ruling against climate proposals.”
Should the court side with Exxon, the right of shareholders to put these long-term value focused proposals on the ballot is at risk. The risks of this for the long-term health of companies, investors’ portfolios, and the economy as a whole cannot be understated.
Large investors to vote against the board of Exxon over lawsuit
Other Exxon investors have expressed their concern over the oil major suing its own shareholders. The CEO of the Norwegian oil fund, one of Exxon’s top-10 shareholders, recently said they were “concerned” about shareholder rights (ft.com).
Several other investors, including CalPERS, the largest pension fund in the US, have announced to vote against re-election of CEO Darren Woods and governance chair Jay Hooley at the upcoming AGM on 29 May because they “silence constructive discussion” on company strategy (ai-cio.com, wsj.com).
Why did we withdraw? To avoid a precedent.
We decided to withdraw the proposal in an effort to have the case dismissed. We hoped to avoid a costly and burdensome legal battle, and the risk of a precedent. This would allow Exxon, and other companies, to block shareholder proposals which request the company to address, among other issues, carbon emissions. These issues must be discussed during the shareholders’ meetings, not in courtrooms.
Why does Exxon continue? To get a precedent and to silence critical shareholders.
Exxon decision to continue the lawsuit even after we withdrew the proposal, shows Exxon’s true intentions: circumventing the SEC and asking the court to give a judgement. Such a judgment would set a precedent that erodes one of the key pillars of corporate accountability.
What’s at stake? Shareholder rights.
This case is not against Follow This or Arjuna Capital. It is against the right of all shareholders. The right to file any meaningful proposal is at stake.
If Exxon wins this case, companies can circumvent the SEC and block proposals by referring to the ruling. As a result, shareholders will not be able to vote on carbon emissions, the root cause of the climate crisis.
- Court ruling available here
