Exxon Wins Round One in Lawsuit Against Climate Activist Investor: Report
A U.S. judge reportedly allowed a lawsuit from Exxon Mobil Corporation (NYSE:XOM) against an activist shareholder group that is seeking to bar their climate resolution.
The lawsuit raised alarm among activists and proxy advisers who argued it would muzzle debate among shareholders and public companies, Reuters reported.
Notably, in January, Exxon sued climate activist groups Arjuna Capital and shareholder activist group Follow This, stating that it would not drop the matter after they agreed to withdraw their petition, citing "the likelihood" the pair could file similar resolutions in the future.
On Wednesday, U.S. District Judge Mark Pittman ruled that Exxon could continue its case against Arjuna Capital, citing jurisdiction to hear the case over a U.S.-based firm.
However, he said it could not pursue its claim against Follow This as it is Netherlands-based and outside the court's jurisdiction.
The judge also denied Exxon's request to obtain evidence to determine whether the court has the authority to hear the case and proposed transferring it to a Texas state court.
As per the report, the activist groups argued that Exxon's legal strategy would allow the company to "haul its shareholders into any court in the United States."
Exxon's legal battle with its investors also reflects the broader struggle within the energy sector to balance shareholder interests with environmental concerns.
This tension was evident at the COP28 climate summit, where a historic agreement was reached to shift away from fossil fuels and increase commitments to renewable energy sources.
Also Read: Exxon's Texas LNG Project Faces Major Setback As Lead Contractor Files For Bankruptcy
Investors can gain exposure to the XOM stock via Energy Select Sector SPDR Fund (NYSE:XLE) and IShares U.S. Energy ETF (NYSE:IYE).
Price Action: XOM shares are up 0.27% to $115.79 premarket at the last check Thursday.
Photo via Wikimedia Commons
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