By Emmanuel Nduka
ExxonMobil’s lawsuit against climate-focused investors has become a wider showdown over activist shareholders, and their ability to seek big corporate strategy changes.
California Public Employees’ Retirement System (CalPERS) on Monday said it will oppose all Exxon board members and CEO Darren Woods at the company’s annual meeting next week.
The announcement made by America’s biggest public pension fund is a high-profile response to Exxon’s ongoing case against Arjuna Capital and Follow This over a climate resolution they have since withdrawn.
CalPERS said the lawsuit’s repercussions could be “devastating.”
“If ExxonMobil succeeds in silencing voices and upending the rules of shareholder democracy, what other subjects will the leaders of any company make off limits? Worker safety? Excessive executive compensation?” the pension fund wrote.
Heritage Times HT recalls that ExxonMobil filed a suit in January this year over the resolution that sought far more expansive climate targets. The suit alleges an “extreme agenda” that would force it to “change the nature of its ordinary business or to go out of business”.
Exxon has said it is pressing the case because the current SEC process fails to exclude resolutions that would hurt companies, instead of boosting shareholder value.
“Far from having a chilling effect on shareholder proposals, our efforts are intended to get clarity on the rules to foster an environment for open and meaningful shareholder dialogue,” Exxon said following CalPERS’ move.
Powerful business groups — including the US Chamber of Commerce and the Business Roundtable — joined the lawsuit on Exxon’s side in February.
While CalPERS move is highly unlikely to upend Exxon’s ranks, the vote tally will help gauge shareholders’ views of the case.
