ExxonMobil Faces Investor Backlash Over Climate Activist Lawsuit

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Exxon Mobil Corporation (NYSE:XOM) is encountering strong criticism from major investors following its recent legal actions against climate activist investors.

Norges Bank Investment Management (“NBIM”), a fund manager, has announced its decision to vote against the reappointment of ExxonMobil’s directors due to the company’s lawsuit against climate activist investors. This move is in response to ExxonMobil’s legal action against two small investor groups advocating for stronger measures to reduce greenhouse gas emissions.

The lawsuit has sparked concerns among activists, proxy advisers, and shareholders, who argue that it aims to stifle debate at public companies. Calpers, the largest public pension plan in the United States, has joined the opposition, stating that it will vote against the re-election of all ExxonMobil directors, citing the company’s aggressive legal actions.

NBIM, the sixth-largest shareholder in XOM with a 1.23% stake according to LSEG data, stressed the importance of protecting shareholder rights. It expressed concerns about the potential impacts of litigation against shareholders who submit proposals. NBIM has consistently opposed the election of Darren Woods to the board since 2017, advocating for the separation of the CEO and Chair roles.

Shareholder proxy advisor Glass Lewis has also recommended voting against the reappointment of certain directors, citing ExxonMobil’s aggressive tactics in pursuing the lawsuit against activist investors. However, ExxonMobil argues that securities regulators have allowed too many resolutions to proceed to a vote, imposing financial burdens on companies. The company hopes that its legal action will lead to reforms in this area.

As the Annual General Meeting (AGM) approaches, the growing opposition from influential investors like NBIM and Calpers highlights a growing demand for greater corporate accountability and proactive climate action within ExxonMobil’s leadership. The outcome of the vote will be closely watched as a potential turning point in the ongoing debate over shareholder rights and corporate responsibility in addressing climate change.

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