Exxon Mobil sued two investors to block a proposal that would force the company to further reduce carbon emissions

Exxon has pledged to make its internal operations carbon-free by 2050

Yet it has not established a “Scope 3” target, which refers to emissions produced by customers using its products, i.e., burning its fuel

That makes Exxon the only major Western oil company to not have Scope 3 targets

An “activist investor” is a fund that buys stakes in public companies to influence their decision-making process

In December, Arjuna Capital, a climate investor with a stake in Exxon, proposed a nonbinding resolution urging Exxon to establish Scope 3 targets

Follow This, another climate investor with a stake in Exxon, backed that proposal the next day

Both funds had previously submitted similar shareholder proposals, the most recent of which failed last year with just 10.5% of votes

On Sunday, in response to the newest proposal, Exxon sued the investors, accusing them of violating US Securities and Exchange Commission (SEC) rules

Those rules allow companies to exclude proposals that “[deal] with a matter relating to the company’s ordinary business” or are substantially similar to proposals from previous years

The lawsuit essentially asks a judge to confirm Exxon’s decision not to hold a vote on the proposal at the company’s upcoming shareholder meeting

Lawsuits of that nature are rare and reflect Exxon’s lack of trust in the SEC, which usually handles such disputes out of court

Exxon reportedly views the SEC – part of the Biden administration – as sympathetic toward stricter climate action and, as a result, less likely to rule in its favor to block the climate proposal

In the lawsuit, Exxon said that the activist investors’ proposal “does not seek to improve ExxonMobil’s economic performance or create shareholder value” and is “micromanaging”

In a statement, Follow This said Exxon “wants to prevent shareholders from using their rights”

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