Exxon CEO Warns Activists, Defends Legal Action on Climate Proposals

Darren Woods, CEO of Exxon Mobil, has issued a stern warning to activist shareholders considering climate-related proposals, defending the company's recent legal actions against investors. Speaking at a Council of Institutional Investors meeting in New York, Woods addressed the controversy surrounding Exxon's lawsuit against activist groups earlier this year.

In January 2024, Exxon sued activists Follow This and Arjuna Capital over a climate-related resolution for the company's May 2024 annual meeting. The lawsuit was dismissed in June 2024 after the defendants withdrew their resolution and agreed not to resubmit similar proposals.

Woods stated, "We hope we don't have to use that action in the future. But if we find people continue to abuse the process, we're going to hold them to the rules." He emphasized that Exxon is not opposed to shareholder proposals but insists on appropriate use of the process.

The CEO's comments come amid growing pressure on oil companies to address climate change concerns. Exxon Mobil, formed in 1999 through the merger of Exxon and Mobil, has faced criticism for its stance on climate change and alleged efforts to spread climate change denial. The company has operations in approximately 50 countries and is one of the largest refiners and marketers of petroleum products globally.

Woods addressed the need to balance emissions concerns with the energy needs of a growing global population. He argued that the focus should be on eliminating carbon emissions rather than oil and gas, suggesting that a carbon emissions accounting system could be beneficial.

"The idea the world needs to get rid of oil and gas misses the true problem, which is that the world needs to get rid of carbon emissions."

Despite facing skepticism from some fund managers, Woods and other Exxon directors were re-elected at the company's annual meeting in May 2024, with support from major investors like BlackRock and Vanguard.

The lawsuit has raised concerns about its potential impact on shareholder influence. Sanford Lewis, an attorney representing shareholder activists, noted that small shareholders might think twice before filing resolutions in future proxy seasons.

Exxon Mobil's approach to climate-related shareholder proposals reflects the ongoing tension between oil companies and activist investors. As a component of the Dow Jones Industrial Average and one of the world's largest publicly traded oil and gas companies, Exxon's actions are closely watched by the industry and environmental advocates alike.

The company has a complex history with environmental issues, including the infamous Exxon Valdez oil spill in 1989. In recent years, Exxon has invested in research on alternative energy sources, such as algae-based biofuels, and has made significant investments in natural gas production and liquefied natural gas (LNG) projects.

As the debate over climate change and corporate responsibility continues, Exxon's stance on shareholder proposals and its legal actions will likely remain under scrutiny from investors, environmental groups, and the public.