Earlier this year, ExxonMobil filed a lawsuit against two investors: Arjuna Capital, a socially responsible investment manager, and Follow This, a Dutch environmental member organization. The lawsuit came after the two shareholders filed a climate-related shareholder resolution at ExxonMobil on setting more ambitious medium-term emissions targets. The proposal requested: “…to go beyond current plans, further accelerating the pace of emission reductions in the medium-term for its greenhouse gas (GHG) emissions across Scope 1, 2, and 3, and to summarize new plans, targets, and timetables.”
Rather than adhering to the Securities and Exchange Commission (SEC) process for appealing a resolution – which companies use every year to dispute hundreds of resolutions – ExxonMobil instead filed the lawsuit in a Texas court. Despite Follow This and Arjuna Capital withdrawing the lawsuit, ExxonMobil has continued the litigation and, in doing so, has challenged all investors that use the shareholder proposal process as a means to foster change through their longstanding investments.
Given this aggressive action against fellow shareholders, Mercy Investment Services and Wespath – the pension and benefits ministry of the Methodist Church – filed an exempt solicitation with the SEC to encourage ExxonMobil shareholders to vote against ExxonMobil CEO and Chair Darren Woods and lead independent director and nominating committee chair Joseph Hooley. Since Wespath and Mercy Investments issued the call to other shareholders to “vote no” against the reelection of Mr. Woods and Mr. Hooley, several large investors and proxy advisory firms have in part or in whole agreed. While Mercy and other aligned investors concerned with Exxon’s board governance do not expect to unseat any directors with this campaign, we hope it will indicate to the company that the actions against its own shareholders do not respect the rights of investors to be participative in the companies in which we are partial owners. The vote will be held during the May 29 annual general meeting; official results will be available in early June.