ExxonMobil is digging its heels into a fight with activist investors who attempted to speed up the oil giant’s climate change commitments, and it turns out Exxon has sympathizers in some of the U.S.’s biggest business lobbying groups.
The U.S. Chamber of Commerce and the nonprofit Business Roundtable group filed an amicus brief Wednesday in support of Exxon, arguing that the Securities and Exchange Commission (SEC) is too permissive of shareholder speech. In other words: Just because an investor at the annual meeting wants to ask to the company to do something, they shouldn’t be able to really ask.
“By opening the door to shareholder proposals pushing social and political agendas, the SEC has allowed a subset of activists to commandeer corporate proxy statements for their own parochial ends,” the brief reads. It comes as Exxon doesn’t want to let activists quietly dismiss the resolution that started this all.
What were the activist investors arguing?
In December, the activist investors — Dutch-based collective Follow This and the U.S.-based Arjuna Capital — wanted Exxon to step up its 2050 net zero commitment to fighting not just its own emissions but those of its customers as well, and put the matter up for a proxy vote (Follow This made similar proposals in 2022 and 2023 that shareholders overwhelmingly voted down in both cases). In January, Exxon sued them to drop the matter, the first time in history a company had sued to block a shareholder resolution. Arjuna and Follow This begrudgingly obliged and dropped the resolution earlier this month.
When the groups dropped their proxy fight, Arjuna chief investment officer Natasha Lamb said in a statement that “not only is the company side-stepping a critical corporate accountability mechanism that has upheld shareholder freedoms for decades; this amounts to tactics of intimidation and bullying.”
But when the groups filed a motion to dismiss Exxon’s suit in a Texas federal court, Exxon asked the judge to deny the motion because Arjuna and Follow This were waging a “perennial campaign of promoting their social agenda through shareholder proposals to ExxonMobil that seek to micromanage its business and coordinating with others to do the same.”
Exxon wants the judge to tell the groups they can’t submit similar proxy statements ever again. Shut up forever, essentially. And now the collective voice of corporate America is joining in to say: Yeah, shut up.
“Those proposals are expensive and time-consuming to address, and they are rarely designed to promote overall shareholder value,” Exxon said in its complaint. “Instead, they are frequently at odds with the interests of investors who are seeking to obtain returns.”
