The fossil fuel giant is suing investors to intimidate them from ever trying to influence corporate decisions.
by Freddy Brewster, The Lever
ExxonMobil has launched an extraordinary lawsuit against two investment firms for the alleged offense of filing climate-focused shareholder proposals. The fossil fuel giant’s underlying goal: killing a federal regulatory effort that would make it easier for all U.S. shareholders to voice environmental and social concerns about the companies they own.
Critics say the company is also trying to intimidate shareholders from ever proposing such resolutions again in the future — under threat of being tied up in expensive litigation and incurring punitive financial penalties.
If successful, the Exxon lawsuit could set a legal precedent wrestling control away from regulators and cracking down on activist investors working to enact more climate-friendly policies.
Exxon’s unprecedented lawsuit was filed in January in a Republican-dominated judicial circuit that has become the go-to court system for corporate victories. The suit aims to convince judges to supersede financial regulators who have long been responsible for deciding whether publicly traded companies are required to allow shareholder votes on resolutions.
Even though the shareholders have withdrawn their resolution, Exxon has continued to pursue the suit. According to the complaint, the company is also asking judges to punish the shareholders for filing the resolution by forcing them to pay the oil company’s attorney’s fees and “other and further relief as the Court may deem just and proper.”
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