A U.S. federal court in Texas has dismissed ExxonMobil’s lawsuit against activist shareholders, marking a significant development in the battle over climate change risk disclosures and shareholder activism. The court ruling sets a precedent in corporate governance and highlights ongoing challenges faced by the oil and gas industry in the realm of climate change.
A U.S. federal court in Texas has dismissed ExxonMobil’s lawsuit against activist shareholders from Arjuna Capital and Follow This. The lawsuit, dismissed on June 18, 2024, followed a six-month legal battle centering on climate change risk disclosures. Texas District Judge Mark Pittman ruled the case moot after Arjuna agreed not to refile its climate-related shareholder petitions. ExxonMobil had alleged that these petitions violated U.S. securities rules, claiming excessive leniency by the Securities and Exchange Commission.
The lawsuit’s dismissal sheds light on ExxonMobil’s legal approach to managing shareholder activism on climate change, involving major investors like Calpers and Norway’s sovereign wealth fund. Despite Exxon’s success in defeating a campaign to block board member re-elections, the company continued its legal fight, emphasizing shareholder system integrity.
Exxon CEO Darren Woods noted the court’s acknowledgment of Arjuna’s commitment not to resubmit similar proposals. Arjuna CIO Natasha Lamb welcomed the dismissal, highlighting ongoing climate challenges for the oil and gas industry. Follow This leader Mark van Baal pointed out that halting the lawsuit preserved shareholders’ rights to propose climate-related actions.
This outcome resolves a significant confrontation between ExxonMobil and climate-focused shareholders, setting a precedent in corporate governance and shareholder rights amidst growing environmental concerns.
