FOR IMMEDIATE RELEASE

MEDIA CONTACT: Sophia Wilson, swilson@asyousow.org, (341) 600-1832

BERKELEY, CALIFORNIA—JUNE 18, 2024—Late Monday, the United States District Court for the Northern District of Texas dismissed ExxonMobil Corporation’s lawsuit against Arjuna Capital. The dismissal marks what should be the end of an inglorious saga for Exxon, which filed the lawsuit in response to the submission of a shareholder proposal by Arjuna rather than seeking exclusion through the normal Securities and Exchange Commission process. Exxon’s decision to file the lawsuit — and to continue pursuing the lawsuit even after the proposal was withdrawn — was roundly criticized throughout the investment community. It also spurred significant investor pushback that resulted in lead independent director Joseph Hooley receiving an extraordinary 12.9% “no” vote at Exxon’s recent AGM.

“As an attempt to degrade shareholder democracy and to silence investors concerned about climate risk, Exxon’s lawsuit failed twice over,” said Andrew Behar, CEO of As You Sow. “While Exxon managed to extract a promise from one organization not to submit climate-related proposals in the future, nothing that happened in this lawsuit prevents other investors from independently raising this important issue with the company going forward. Climate proposals at Exxon routinely receive significant votes, reflecting investor concern about this critical issue. One thing is clear: Exxon is not going to be able to sue its way out of shareholder concern about climate risk and the company’s transition readiness.”

From the beginning, it was clear that Exxon’s lawsuit was about much more than merely excluding a single shareholder proposal. Exxon’s complaint contained numerous assertions about the SEC no-action process based on faulty statistics, and its public statements confirmed the lawsuit was about its belief that “the current process to get proxy proposals excluded is flawed.” As Judge Mark Pittman’s order recognized, “Exxon’s insistence on litigating abstract future potentialities lends credence” to the argument that Exxon was attempting to use the case as a vehicle to attack the Securities and Exchange Commission (SEC) or the shareholder proposal process. As You Sow argued in an exempt solicitation ahead of Exxon’s AGM that the lawsuit was a direct attack on shareholder democracy itself. The suit’s dismissal is a victory for anyone interested in preserving the stability of American corporate governance.

Moreover, the dismissal throws a wrench in Exxon’s efforts to silence investors concerned about climate risk. Exxon repeatedly tried to convince the court that the case should go forward so that it could litigate against the possibility of potential third parties — like As You Sow mentioned numerous times in Exxon’s complaint and briefing — who might submit climate-related proposals in the future. But, as the court’s order implicitly recognizes, Exxon cannot not use litigation against Arjuna to silence all of its investors. At the same time, proponents and courts should be on notice based on Exxon’s conduct — including its extraordinary request for jurisdictional discovery into Arjuna’s communications with third parties — that the company may use Arjuna’s agreement not to coordinate with third parties on climate proposals as the basis for a fishing expedition in the future.

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As You Sow is the nation’s leading shareholder representative, with a 30-year track record promoting environmental and social corporate responsibility and advancing values-aligned investing. Its issue areas include climate change, ocean plastics, toxins in the food system, biodiversity, racial justice, and workplace diversity. Click here to view As You Sow’s shareholder resolution tracker.