California Treasurer Joins Fracas Over Exxon’s Shareholder Climate Lawsuit

A coalition of asset managers and state treasurers, including California’s Fiona Ma, called for a vote against Exxon’s top directors, pushing back on the oil giant for suing a group of its climate-oriented investors.

Back in January, Exxon filed a complaint in a Texas court, pressing a judge to block a climate proposal from activist investors Arjuna Capital and Follow This from receiving a vote at its annual board meeting on May 29.

The typical process for Exxon to adjudicate a dispute over a shareholder proposal lies with the U.S. Securities and Exchange Commission, but the company skipped that step and moved to litigate instead, which Ma’s group called an “unprecedented attack on its own investors.”

In response, the group called Tuesday for big banks and global asset managers, including JPMorgan Chase and BlackRock, to vote against Exxon CEO Darren Wood and Lead Independent Director Joseph Hooley next week. A day earlier, CalPERS, the state’s pension fund for its employees, said it would vote against Exxon’s entire board of directors.

The coalition said it takes “no position on the merits” of the proposal from Arjuna Capital and Follow This, which asked Exxon to reduce emissions from users of its products and set supply chain climate targets, but its members “are deeply concerned that ExxonMobil’s actions are aimed at curtailing an important shareholder right.”

In a statement, Ma said that Exxon’s actions “continue to display disregard for shareowners and their right to have a say in the direction of the company.”

Exxon did not immediately respond to a KQED request to comment, but the company told Reuters that Arjuna Capital and Follow This are “driven by an extreme agenda” and that their proposals do not serve investors’ interests or promote long-term shareholder value.

In theory, the shareholders could push to remove the leaders of Exxon’s board at the meeting next week, but there is no alternative slate of candidates, so pressure on the vote is largely meant to send a message.

If Exxon’s lawsuit against its activist investors is successful, the repercussions could be “devastating,” CalPERS said in a statement.

“Shareholder rights are a cornerstone of CalPERS’ approach to corporate governance and an essential component of our investing principles,” the statement said.