World’s Top Sovereign Fund Slams Exxon’s Lawsuit Over Climate Proposals

Exxon’s lawsuit against two activist investor groups over climate resolutions is “very aggressive,” according to the world’s biggest sovereign wealth fund, which is a top ten shareholder in the U.S. supermajor.  

Last month, ExxonMobil sued two activist investor groups in a Texas district court, aiming to block their climate proposals from going to a vote at the annual shareholder meeting later this year in the first such direct complaint to court instead of to the SEC.

Exxon sued U.S. activist investor Arjuna Capital and shareholder activist group Follow This. Those two investors had filed a proposal for Exxon’s shareholders to vote to have Exxon commit to further emissions reductions, including Scope 3 – emissions from the product it sells.

Even after the two investors withdrew the proposal, Exxon said last week it would pursue the lawsuit.

Commenting on this development, Nicolai Tangen, chief executive of Government Pension Fund Global, as Norway’s $1.5-trillion wealth fund is officially known, told the Financial Times,

“We think it’s very aggressive and we are concerned about the implications for shareholders rights.”  

The fund, which is commonly referred to as ‘Norway’s oil fund’ because it was created with oil and gas revenues, is a shareholder in many large companies in the world and has the power to influence other investors with its investment decisions.

In Exxon, the fund had a 1.35% stake valued at $5.4 billion as of the end of 2023 and is one of the top ten shareholders.

At last year’s annual general meetings, the Norwegian fund – contrary to Exxon’s management recommendation – voted in favor of climate resolutions to introduce Scope 3 emission targets. The fund sided with the climate proposals from Follow This, asking Exxon to adopt a medium-term Scope 3 emission reduction target, as “The board should account for material sustainability risks facing the company, and the broader environmental and social consequences of its operations and products,” the fund said at the time.

None of the climate resolutions gained enough shareholder support at Exxon’s AGM last year.

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