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Exxon Mobil sues two pro-ESG investors for trying to "diminish the company's existing business"

The Texas oil company went to court to prevent Arjuna Capital and Follow This, an activist investor group, from presenting a resolution at the next shareholders' meeting that would reduce emissions from its suppliers and consumers.

Imagen de archivo de una estación de servicio de Exxon por la noche.


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Exxon Mobil filed a suit against two investment firms this Sunday in Texas, accusing them of pursuing an "extreme agenda" that would harm the company.

According to excerpts of the lawsuit collected by Reuters, Exxon Mobil claims that Arjuna and Follow This, became its shareholders with the sole aim to "diminish the company's existing business."

With the lawsuit, the oil giant is trying to block the presentation of a proposal to adopt climate goals -known as ESG- at the annual shareholder meeting on May 29. Specifically, They would seek for Exxon to commit to reducing emissions from its suppliers and consumers.

The company would have avoided the US Securities and Exchange Commission (SEC) by reasoning that it became less likely to block these types of initiatives during the Biden Administration, according to The Wall Street Journal.

Exxon assures that its shareholders have voted and rejected similar proposals recently, among other arguments, to block the initiative.

The Trojan horse

Both Arjuna and Follow This recognize investing in companies to encourage them from within to adopt environmental commitments.

On its website , Follow This asks for donations to "pressure the oil industry." It also details that his strategy consists of "put climate targets resolutions on the agenda of oil majors."

In addition to Exxon, they call for collaborations to increase their influence in TotalEnergies, BP, Chevron and Shell. As for the latter, they are proud of "forcing Shell to set a climate ambition" in 2017, like the one they would also like to introduce at Exxon. "Follow This became Shell’s most influential shareholder and a prominent voice in the international media."

Follow This seeks to get companies to adopt the Paris Agreements through a resolution that it introduces at shareholder meetings. This resolution is, in their own words, a "Trojan horse":

As soon as a company aligns its targets with Paris, it will conclude that there is no room for further investments in exploring for more oil and gas. The company will therefore stop exploring for more oil and gas and start exploring for new business models.

Arjuna Capital - which presents itself as a firm of "engaged investors" commited to "sustainability"- stated in a report on its work in 2022 that it did not invest in Big Oil or gas, but that it did influence companies such as Exxon and Chevron through its client portfolios. In it, they maintain that they managed to get the Texas company to present a report with possible changes in its business model that would reduce dependence on oil.