The world’s largest oil company is mad as hell at its activist shareholders and isn’t going to take it any more by suing them in court.On Sunday, ExxonMobil Corp. took the somewhat unusual step of seeking to exclude a climate proposal from so-called ‘ethical investors’ from going to a vote at its annual meeting in May.In a Texas court filing it accused a pair of investor groups, Arjun Capital and Follow This, of a strategy to “become shareholders solely to campaign” for changes “calculated to diminish the company’s existing business.”.Exxon is accusing the activists of a strategy to “become shareholders solely to campaign” for changes “calculated to diminish the company’s existing business.”.It’s believed to be the first time an oil company has sued environmental activists for deliberately destroying shareholder value.That’s because environmentalists and activist investors typically buy token positions in target companies with the aim of embarrassing company executives with motions and resolutions that are almost always guaranteed to fail.In this case, the groups are looking to impose so-called ‘Scope 3’ targets that take into account the emissions generated from users of its products after they’ve been sold — from the tailpipes of cars, for instance — in calculation overall emissions.Scope 3 emissions account for about 95% of all greenhouse gas emissions generated by major oil companies, including Exxon.According to a Securities and Exchange Commission filing in 2020, Exxon’s Scope 3 emissions were about 650 million metric tonnes. By contrast, Canada’s combined emissions were about 672 million tonnes.Last week a group of 27 investors — including Follow This — which collectively own about 5% of Shell’s shares, co-filed a similar resolution to be brought to a vote at its own annual meeting later this spring.In 2022, a Dutch court ordered Shell to cut its carbon emissions 45% from 2019 levels to align with the 2015 Paris Accord in what was seen as a major victory for the activists by seeking to hold executives personally liable for failing to adopt and implement climate policies..“There is no viable method of quantifying emissions and the impact of reduction steps when the same emissions are counted repeatedly.“ExxonMobil.Shell has appealed.On its website, Exxon disputes how Scope 3 emissions are calculated, accusing the existing calculations of “double-counting.”“ExxonMobil’s Scope 2 emissions are the power company’s Scope 1; our Scope 3 emissions are the consumer’s Scope 1; our Scope 1 are a factory’s Scope 2; and so on,” it says. “There is no viable method of quantifying emissions and the impact of reduction steps when the same emissions are counted repeatedly. Making a company responsible for reductions, with targets outside of Scope 1 emissions, distorts accountability and undermines the incentive for each responsible party to act. When everybody is responsible, nobody is responsible.”
