Activists Use Shareholder Rights To Undermine Shareholders’ Interests

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Led by CalPERS, the pension fund for California public workers, activist investors may oppose re-electing ExxonMobil ExxonMobil 0.0% chief executive Darren Woods to the company board. His sin: seeking greater clarification regarding proposals that shareholders have previously rejected multiple times.

The issue arises because Environmental, Social, and Governance (ESG) activist investors Arjuna Capital and Follow This tried to resubmit a proposal on Exxon’s 2024 proxy statement. The proposal would have asked shareholders to, once again, consider imposing stricter greenhouse gas (GHG) emission targets on the company that include Exxon’s direct emissions (Scope 1), Exxon’s indirect emissions (Scope 2), and emissions of customers (Scope 3). As I illustrated here, this proposal would have been unworkable and costly to the company.

Carbon accounting exercises provide inaccurate emissions information that does not improve investors’ understanding of the company’s operations. Nor is there any assurance that meeting the arbitrary targets would have resulted in actual global emission reductions.

Click to read the full article in Forbes. 

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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