In a Feb. 1 court filing, Exxon told the court it was removing its request for an expedited hearing in the case, but in an emailed statement, the company said the lawsuit will continue.
"Because the proposal was withdrawn, it's no longer critical to expedite the hearing," the Exxon statement said. "However, we believe there are still important issues for the court to resolve. There is no change to our plans, the suit is continuing, and we're evaluating our options."
Follow This has a different point of view.
"Given Exxon's preference to fight a battle in court rather than allow shareholders the freedom of a vote at its annual meeting, we decided to withdraw the climate proposal," said Mark van Baal, founder of Follow This, in a statement. "Now that we have withdrawn and promised not to refile the proposal with Exxon, the company has no reason to continue the lawsuit."
Shareholders can file proposals before a company's annual meeting. If a company thinks a proposal is out of bounds or has already been addressed, it can file a no-action letter with the SEC, requesting permission not to include the proposal in its proxy statement.
In this instance, Exxon did not appeal to the SEC and went straight to court.
Amy Borrus, executive director of the Council of Institutional Investors, said in an email that companies always have a right to bypass the SEC no-action process and go to court. "But these straight-to-court challenges may be used to as a scare tactic to deter proponents — particularly smaller ones with limited resources — and they can generate ill will within in the proponent community," she said. "While we don't always agree with the SEC's no-action determinations, we view the SEC as a trusted, respected and generally fair referee."
In its original complaint, Exxon said "the 2024 proposal does not seek to improve Exxon Mobil's economic performance or create shareholder value. Like the previous proposals, it is designed instead to serve Arjuna's and Follow This' agenda to 'shrink' the very company in which they are investing."
A similar proposal last year gained just over 10% of shareholder support, down from 27% in 2022.