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Why ExxonMobil is taking climate activists to court

: [POST-BROADCAST CORRECTION: This story incorrectly refers to the Interfaith Center on Corporate Accountability. The group is called the Interfaith Center on Corporate Responsibility.]

STEVE INSKEEP, HOST:

A company that's constantly attacked for its effect on the climate is striking back. ExxonMobil is taking climate activists to court. NPR's Michael Copley reports.

MICHAEL COPLEY, BYLINE: Every year, shareholders in publicly traded companies like ExxonMobil get a say in how the corporations are run. A shareholder can file a proposal and then all the company's investors get to vote on it at annual meetings. Activists have been using that so-called proxy process to pressure companies to do more to deal with climate change, and that's irritating parts of corporate America.

CHARLES CRAIN: The main theme that companies have been watching for the last several years is the extent to which that activists have hijacked the proxy process and the extent to which the SEC has enabled them to do so.

COPLEY: Charles Crain is an executive at the National Association of Manufacturers. It represents industrial companies. Crain says regulators at the Securities and Exchange Commission aren't doing enough to weed out proposals from climate activists that he says are trying to score political points. Here he is again by phone after a problem with the internet.

CRAIN: They are not seeking to guide the company through X or Y or Z climate issues so as to increase the value of their investment, which is what the shareholder proposal process is supposed to be.

COPLEY: That's where Exxon comes in. It recently filed a lawsuit in Texas against investor groups that submitted a shareholder proposal. They want Exxon to slash the climate pollution from its own business and from customers that by its fuel and chemicals. Exxon told NPR in an email that it's trying to protect investors from activists that file similar proposals year after year in an attempt to micromanage its business. But Josh Zinner says Exxon's lawsuit threatens the rights of company shareholders. Zinner leads a coalition of investors called the Interfaith Center on Corporate Accountability (ph).

JOSH ZINNER: This is really about intimidating investors, shareholders of Exxon, from bringing these types of proposals in the future.

COPLEY: And Zinner says that because Exxon is so large, what happens there has consequences far beyond the company.

ZINNER: The direction that Exxon takes in the energy transition has a big impact on how we, collectively, can move forward to reducing greenhouse gas emissions.

COPLEY: Interest groups on both sides of the debate say Exxon's lawsuit could unleash a wave of similar cases against activist shareholders. It's happening at a time when global temperatures continue to rise, and analysts say most companies aren't on track to meet targets they set to cut their heat-trapping emissions.

Michael Copley, NPR News.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Corrected: March 3, 2024 at 11:00 PM CST
This story incorrectly refers to the Interfaith Center on Corporate Accountability. The group is called the Interfaith Center on Corporate Responsibility.
Michael Copley
Michael Copley is a correspondent on NPR's Climate Desk. He covers what corporations are and are not doing in response to climate change, and how they're being impacted by rising temperatures.