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The next front in the ESG wars is governance

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on Axios or enjoy below:

🗞️ Driving the news: ExxonMobil is suing investors Arjuna Capital and Follow This over a shareholder proposal to set more aggressive emission-cutting targets, arguing that it undermines shareholder value and abuses the proposal process
• This is part of a broader attempt to politicize climate change risks in business governance

🔭 The context: The shareholder proposal process, established under the Securities Exchange Act of 1934, allows proposals that meet certain requirements to be included on ballots
Companies can request the SEC to exclude proposals, but this has become harder since 2021

🌍 Why it matters for the planet: Opposing climate-focused shareholder proposals can delay corporate decarbonization efforts, critical for addressing global warming
• ExxonMobil's lawsuit reflects broader industry resistance to integrating environmental concerns into business strategies

⏭️ What's next: ExxonMobil's strong shareholder support for its board, despite opposition from major funds like CalPERS, highlights the contentious nature of ESG issues
• The outcome of this and similar cases could set precedents affecting future climate and governance proposals

💬 One quote: "Our investors sent a powerful message that rules and value-creation matter," ExxonMobil said in response to the shareholder meeting results

📈 One stat: Three years ago, ExxonMobil lost a proxy fight resulting in three climate-minded directors joining its board, showing the growing influence of climate activism in corporate governance

Click for more news covering the latest on ESG 

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