California Senator Revives $15 Billion Oil Divestment Battle
A U.S. District Judge has ruled that Exxon can proceed with its lawsuit against activist investor Arjuna Capital, which wanted to force the company to make more advanced net-zero commitments.
The judge, however, excluded Follow This, the other target of Exxon's suit, due to jurisdictional obstacles. The activist investor group is based in the Netherlands and U.S. courts do not have jurisdiction over it, Judge Mark Pittman ruled, as reported by Reuters.
In January, the two activist investor entities filed a proposal for Exxon shareholders to vote at the annual general meeting on May 29 to have Exxon commit to further emissions reductions, including Scope 3 - emissions from the product it sells.
In response, Exxon filed a lawsuit at the U.S. District Court for the Northern District of Texas, saying that "Defendants are asking Exxon Mobil to change its day-to-day business by altering the mix of-or even eliminating-certain of the products that it sells."
Exxon also argues that the two activist investors have "become shareholders solely to campaign for change through shareholder proposals that are calculated to diminish the company's existing business."
Some shareholders, notably Calpers, declared their support for the activists investors, with the California pension fund threatening Exxon to vote against the re-election of chief executive Darren Woods unless the company pulled out its lawsuit.
More recently, after Exxon refused to change course, Calpers has threatened to vote against all Exxon board members at the upcoming annual general meeting. It has also tried to influence other shareholders in the company to vote in tune with it. The pension fund holds a 0.19% stake in Exxon.
Commenting on the news about the lawsuit being allowed to proceed, Calpers chief executive Mark Frost said "Exxon's dangerous legal gambit, if successful, would undermine shareholder rights and allow corporate leaders to stifle the ideas of investors with impunity."
Shell shareholders recently voted overwhelmingly against a climate resolution tabled by Follow This, suggesting a turning tide for Big Oil after two years of generous shareholder returns.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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