The bait and switch that Environmental, Social, and Governance (ESG) activists have been peddling for too long is coming into focus.
Activist investors claim they submit ESG proposals at annual meetings to improve corporate profitability. All too often, these proposals are attempts to hijack the corporate governance process to implement policies that Congress refuses to pass. A proposal that ESG activist investors Arjuna Capital and Follow This are trying to resubmit on Exxon’s 2024 proxy statement exemplifies the scheme.
The proposal asks shareholders to impose 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). Shareholders have already voted down this proposal in previous meetings, and there are good reasons shareholders might be skeptical.