Lawsuit filed by oil giant against active shareholders prompts response from other owners

Exxon Mobil’s Legal Battle Against ESG Investors: Will Shareholders Triumph?

Exxon Mobil, the largest US oil company, is facing legal action from its shareholders who are demanding that the company take more active steps to reduce emissions. The unusual situation has arisen in the United States, where Exxon Mobil has sued Dutch shareholder group Follow This and US investment adviser Arjuna Capital for trying to introduce a resolution at a shareholders’ meeting to push for greater action on reducing greenhouse gas emissions. Despite the withdrawal of the proposal by the investors, Exxon Mobil has continued with the lawsuit in federal court in Texas.

Exxon Mobil’s CEO and Chairman of the Board, Darren Woods, has been particularly affected by the actions of activist investors in recent years. This includes events in 2021 when activist investors managed to appoint three board members, including former director of biofuels Kaisa Hietala. These activists have consistently raised concerns about Exxon’s lack of action on climate emissions and environmental, social, and governance (ESG) matters at general meetings, but their proposals have been voted down each year.

The upcoming general meeting on May 29 is expected to be contentious, with larger investors expressing outrage at Exxon’s legal action against its shareholders. Some investors are planning to vote against Darren Woods to remove him from the company’s board due to his management team’s stance on ESG issues. This situation has sparked a debate within the investment community about the role of shareholders in pushing for corporate action on environmental and social issues. The lawsuit filed by Exxon Mobil has only intensified this debate and raised questions about the company’s approach to shareholder engagement.

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