ExxonMobil takes controversial step to thwart opposition: '[It] clearly wants to prevent shareholders using their rights'

U.S.-based oil giant ExxonMobil recently filed a lawsuit to block a vote on a climate resolution brought by green activist investor group Follow This.

What happened?

Dutch green activist group Follow This put forward a motion to ExxonMobil shareholders that called for the oil company to accelerate attempts to cut greenhouse gas emissions.

In response, ExxonMobil filed a lawsuit, saying that the proposal violates Securities and Exchange Commission (SEC) investor petition rules. The company argued that the motion breaks SEC rules designed to prevent shareholders from micromanaging business decisions through proposals, according to the Guardian.

"With this remarkable step, ExxonMobil clearly wants to prevent shareholders using their rights," Mark van Baal of Follow This said, per the Guardian. "Apparently, the board fears shareholders will vote in favor of emissions reductions targets. We don't know why ExxonMobil took this remarkable step."

Why is this lawsuit important?

Coal, oil, and gas account for 75% of planet-warming gases, per the United Nations. According to Follow This, big oil companies can "make or break" the Paris Climate Agreement.

This 2015 agreement set a 1.5 degree Celcius (2.7 degrees Fahrenheit) benchmark for warming — if we pass that, scientists predict disastrous consequences like the melting of Antarctic ice sheets, which will contribute to sea level rise, cause the ocean to become more acidic, and negatively impact crops in some parts of the world.

And while big companies like ExxonMobil say they're cleaning up operations — in 2022, Exxon announced plans to reach net zero in its operations by 2050 — one analysis by nonprofit InfluenceMap found that many of these companies don't have practical plans to achieve their goals. 

A number of them are also lobbying against policies that align with their green ambitions, according to the report. In fact, the group calls out ExxonMobil as a significant risk of "net zero greenwash" because of its policy engagement.

What's being done to keep oil companies accountable?

This is not the first time Follow This has put forth similar resolutions before an oil company's shareholders. The green group introduced a climate resolution before Shell investors at their 2023 annual shareholder meeting. Ultimately, Shell's shareholders rejected the resolution with only 20.2% in support, but now the oil company is facing a shareholder rebellion spurred by the resolution.

You too can become a green shareholder for ExxonMobil, Shell, BP, Chevron, or Total Energies through Follow This. According to the organization's website, "When you buy a share through Follow This, you not only get to vote in favor of our climate resolutions, but you also enable us to be listened to by the press and, more importantly, by big institutional investors with millions of votes at their disposal." 

You can also do your part by getting involved in climate issues. One way to do this is voting for pro-climate candidates. You can also help enact change by talking to your friends and family about climate issues and participating in local climate action.

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