Judge rules Exxon can sue activist shareholder over climate proposal

A federal judge in Texas has allowed Exxon Mobil to proceed with its lawsuit against activist investor Arjuna Capital regarding a climate change proposal, while dismissing the case against Follow This due to its Netherlands base. The lawsuit stems from a withdrawn shareholder resolution demanding faster CO2 emissions reductions, which Exxon argues could reappear in future meetings. The judge supported Exxon's stance, citing concerns over the investors' motives against the oil industry.

Exxon Mobil based its lawsuit to exclude the shareholder resolutions submitted by Arjuna Capital and Follow This on specific grounds under the Securities and Exchange Commission (SEC) rules126. The company argued that the resolutions should be excluded because they dealt with matters relating to the company's ordinary business operations. Additionally, Exxon contended that the proposals were substantially similar to previous proposals submitted in the past five years, which had already been considered and rejected by shareholders. These arguments are grounded in the SEC's rules that allow companies to exclude shareholder resolutions if they meet certain criteria, such as being related to ordinary business operations or being substantially similar to prior proposals1. This legal stance reflects Exxon's broader strategy to manage shareholder proposals that it views as potentially disruptive to its business operations1.