On January 21, ExxonMobil filed a case in the Fifth Circuit Court in Dallas, Texas suing two shareholders, Arjuna Capital and Netherlands-based FollowThis, who had dared to file a proposal requesting that the company do more to reduce its greenhouse gas (GHG) emissions to help counter the growing climate crisis. The lawsuit set in motion months of investor opposition including a widely-supported investor campaign against Lead Director Joseph Hooley and CEO/Director Darren Woods. The response to the lawsuit was global in scope and included a number of sizeable institutional investors who viewed the unprecedented invocation of the courts to block a shareholder proposal as unnecessarily punitive and akin to a “SLAPP” suit meant to silence shareholder dissent on climate risk and ward off future shareholder filings. Most concerning to investors was the company’s flagrant “end run” around the Securities and Exchange Commission (SEC), the federal regulator charged with protecting investor interests and adjudicating proxy disputes. The lawsuit quickly became a lightning rod for the attack on shareholder rights, raising the specter of future lawsuits against shareholder proponents seeking more information and improved corporate policies to better manage climate risk.
The post ExxonMobil’s Lawsuit Against its Shareholders: A Cautionary Tale first appeared on Interfaith Center on Corporate Responsibility.