ExxonMobil sued shareholder groups over climate science proposals
Federal court dismisses ExxonMobil's lawsuit against Arjuna Capital and Follow This
Follow This was removed from the case due to jurisdiction issues
Judge Mark Pittman dismissed the lawsuit due to Arjuna Capital's agreement not to submit future proposals on ExxonMobil's greenhouse gas emissions
A federal court in Texas has dismissed lawsuits brought by ExxonMobil against two activist shareholder groups, Arjuna Capital and Follow This, over their efforts to bring climate science to the forefront of the company's annual meetings. The dispute centered on whether climate risk is a legitimate business concern and part of a corporate pushback against shareholder proposals.
Exxon had sued the groups in January, alleging that they were abusing the shareholder-access system and attempting to restrict its ability to address climate-related issues through regulatory channels rather than through the SEC. However, after Arjuna Capital agreed not to submit future climate science proposals regarding ExxonMobil's greenhouse gas emissions, Judge Mark Pittman dismissed the lawsuit.
Netherlands-based climate group Follow This was also removed from the case due to jurisdiction issues. The dismissal of ExxonMobil's lawsuit against Arjuna Capital was characterized as a victory for all investors who want to safeguard the long-term future of US oil and gas companies in view of the climate crisis.
Exxon had claimed that its lawsuit put a spotlight on the abuse of the shareholder proxy submission process. However, critics argued that it could restrict shareholders' ability to raise concerns with public companies through this avenue. The dismissal of ExxonMobil's lawsuit against Arjuna Capital was seen as a victory for all investors who want to ensure their right to file proposals on important issues is not compromised.
ExxonMobil had been backed by the US Chamber of Commerce and the business roundtable trade groups, who argued that government regulators' decision to allow shareholder proposals pushing social and political agendas enables a subset of activists to commandeer corporate proxy statements for their own parochial ends. However, Judge Pittman's ruling made it clear that Arjuna Capital is bound by its commitment not to submit or work with others to submit similar proposals to ExxonMobil in the future.
A federal judge in Texas dismissed a lawsuit by Exxon Mobil against activist shareholder Arjuna Capital over a climate proposal.
Arjuna Capital promised not to submit a similar resolution in the future.
Exxon had sued Arjuna Capital and another shareholder, Follow This, in January to stop them from submitting a proposal at the oil major’s annual shareholder meeting.
Critics argued that Exxon’s lawsuit would have a chilling effect on future shareholder petitions.
The two activist shareholders withdrew the proposal after Exxon sued.
U.S. District Judge Mark Pittman allowed the suit against Arjuna to proceed, while tossing out the suit against Netherlands-based Follow This due to jurisdiction issues.
Exxon’s claims against Arjuna stemmed from Securities and Exchange Commission rules that permit companies to exclude shareholder resolutions that deal with a matter relating to the company’s ordinary business operations or are substantially similar to proposals offered in the past five years.
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The author makes an appeal to authority when quoting Judge Pittman's statement 'The SEC is behind the ball on this issue.' This statement does not necessarily mean that the SEC is indeed behind on this issue and it should be noted that the judge is expressing his personal opinion. However, since there are no other fallacies found in the article and this instance of appeal to authority does not significantly impact the overall content or argument of the article, I am scoring it a 95.
'The SEC is behind the ball on this issue,' Pittman wrote in the ruling.
A US judge has ended a lawsuit brought against ExxonMobil by one of its shareholders over the oil and gas company’s response to climate change.
The shareholder, the New York State Comptroller Thomas DiNapoli, had accused ExxonMobil of misleading investors by understating the risks posed by climate regulations to its business.
Exxon sued Arjuna Capital and Follow This over a shareholder proposal that would have forced the company to account for its customers’ carbon emissions.
Follow This and Arjuna recalled the proposal after being sued, but Exxon continued the suit to prevent them from re-filing it in the future.
Exxon claimed a partial victory in putting a spotlight on the abuse of the shareholder proxy submission process.
