Big Oil’s Winning Streak Forces Activist Investors to Regroup

Big Oil’s big climate showdown

Months of tensions between oil majors and activist investors could reach a boiling point at the annual meetings of Exxon Mobil and Chevron Wednesday, as the U.S. giants pump record levels of crude and sit on bumper profits.

Facing another defeat, the climate groups that bought shares to try to influence corporate behavior are now rethinking their strategies, Vivienne Walt reports for DealBook.

Activists’ efforts to pressure Big Oil to clean up its polluting ways are faltering. Last week, climate change protests rocked Shell’s annual meeting in London. But the company easily saw off a measure filed by Follow This, a Dutch shareholder activist group, and other investors, demanding that the oil giant drastically strengthen its climate targets.

Exxon could face an even fiercer battle this week — not only with the activist investors it is suing, but from powerful institutional investors as well. They include Norway’s huge sovereign wealth fund, and CalPERS, the California pension fund, both of which strongly oppose Exxon’s attempt to quiet some of its most vocal climate critics.

A recap: In January, Exxon sued two activist investor groups, Arjuna Capital and Follow This, in a Texas court, saying that their resolution to include so-called Scope 3 emissions targets reflected “an extreme agenda” that was detrimental to shareholders.

The groups withdrew their resolution, fearing that an Exxon legal win could essentially silence all activists and shareholder debates. Last week, a Texas judge ruled that Exxon’s lawsuit could proceed against Arjuna, which is based in Massachusetts, but said that the court had no jurisdiction over Follow This, which is based in Amsterdam. Exxon is still suing.