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Exxon Mobil Corporation (XOM - Free Report) has filed a complaint in a Texas court to block a climate proposal by activist investors from going to a vote at the company’s shareholder meeting in May.
This marks the first time that ExxonMobil has sought to exclude a shareholder proposal by resorting to legal action, signaling a potential shift in how corporations respond to investor-driven environmental initiatives.
The complaint targets investors led by Arjuna Capital — a U.S. activist investment firm, and Follow This — a shareholder activist group based in Amsterdam. The activists are urging ExxonMobil and other major oil companies to adopt more stringent climate targets, specifically calling for the implementation of Scope 3 targets to reduce emissions. ExxonMobil is the only one among the five Western oil majors without such targets.
The activists propose that ExxonMobil should go beyond its current plans, setting specific targets and timetables for emissions reduction. ExxonMobil argues that the proposal violates SEC rules for investor petitions, claiming that it does not meet the required threshold for resubmission and infringes on rules against attempting to micromanage business decisions.
This lawsuit is likely to draw significant attention from the corporate world, as ExxonMobil’s success in court could set a precedent affecting shareholder petitions across various industries. Large technology companies and Wall Street banks have occasionally faced numerous shareholder proposals at annual meetings, and if Exxon prevails, it might discourage similar initiatives in the future.
While ExxonMobil has set a goal to achieve net-zero emissions from its operations by 2050, it has resisted adopting targets for emissions associated with consumer use of its products. This stance contrasts with some European rivals who have embraced such targets, potentially requiring them to produce less oil and gas.
ExxonMobil’s legal challenge against climate activist shareholders represents a notable development in the ongoing debate over corporate responsibility and environmental initiatives. The outcome of this case could influence how companies respond to shareholder proposals in the future, particularly those related to climate change.
Zacks Rank & Stocks to Consider
Currently, ExxonMobil carries a Zack Rank #3 (Hold).
Oceaneering International, Inc. (OII - Free Report) is one of the leading suppliers of offshore equipment and technology solutions to the energy industry.
The Zacks Consensus Estimate for OII’s 2024 EPS is pegged at $1.52. OII has a Zacks Style Score of A for Growth and B for Value. OII’searnings for 2024 are expected to surge 76.4% year over year.
Enbridge Inc. (ENB - Free Report) is a leading energy infrastructure company. It plans to introduce more than C$19 billion in growth projects, contributing to significant EBITDA growth in the near future.
The Zacks Consensus Estimate for ENB’s 2023 and 2024 EPS is pegged at $2.11. ENB has witnessed upward earnings estimate revisions for 2024 in the past 30 days.
Sunoco LP (SUN - Free Report) is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. Sunoco has a core competency in terms of its history of disciplined expense management.
The Zacks Consensus Estimate for SUN’s 2024 EPS is pegged at $3.83. SUN has a Zacks Style Score of B for Value and Growth.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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ExxonMobil (XOM) Sues Activists, Blocks Climate Petition
Exxon Mobil Corporation (XOM - Free Report) has filed a complaint in a Texas court to block a climate proposal by activist investors from going to a vote at the company’s shareholder meeting in May.
This marks the first time that ExxonMobil has sought to exclude a shareholder proposal by resorting to legal action, signaling a potential shift in how corporations respond to investor-driven environmental initiatives.
The complaint targets investors led by Arjuna Capital — a U.S. activist investment firm, and Follow This — a shareholder activist group based in Amsterdam. The activists are urging ExxonMobil and other major oil companies to adopt more stringent climate targets, specifically calling for the implementation of Scope 3 targets to reduce emissions. ExxonMobil is the only one among the five Western oil majors without such targets.
The activists propose that ExxonMobil should go beyond its current plans, setting specific targets and timetables for emissions reduction. ExxonMobil argues that the proposal violates SEC rules for investor petitions, claiming that it does not meet the required threshold for resubmission and infringes on rules against attempting to micromanage business decisions.
This lawsuit is likely to draw significant attention from the corporate world, as ExxonMobil’s success in court could set a precedent affecting shareholder petitions across various industries. Large technology companies and Wall Street banks have occasionally faced numerous shareholder proposals at annual meetings, and if Exxon prevails, it might discourage similar initiatives in the future.
While ExxonMobil has set a goal to achieve net-zero emissions from its operations by 2050, it has resisted adopting targets for emissions associated with consumer use of its products. This stance contrasts with some European rivals who have embraced such targets, potentially requiring them to produce less oil and gas.
ExxonMobil’s legal challenge against climate activist shareholders represents a notable development in the ongoing debate over corporate responsibility and environmental initiatives. The outcome of this case could influence how companies respond to shareholder proposals in the future, particularly those related to climate change.
Zacks Rank & Stocks to Consider
Currently, ExxonMobil carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Oceaneering International, Inc. (OII - Free Report) is one of the leading suppliers of offshore equipment and technology solutions to the energy industry.
The Zacks Consensus Estimate for OII’s 2024 EPS is pegged at $1.52. OII has a Zacks Style Score of A for Growth and B for Value. OII’searnings for 2024 are expected to surge 76.4% year over year.
Enbridge Inc. (ENB - Free Report) is a leading energy infrastructure company. It plans to introduce more than C$19 billion in growth projects, contributing to significant EBITDA growth in the near future.
The Zacks Consensus Estimate for ENB’s 2023 and 2024 EPS is pegged at $2.11. ENB has witnessed upward earnings estimate revisions for 2024 in the past 30 days.
Sunoco LP (SUN - Free Report) is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. Sunoco has a core competency in terms of its history of disciplined expense management.
The Zacks Consensus Estimate for SUN’s 2024 EPS is pegged at $3.83. SUN has a Zacks Style Score of B for Value and Growth.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.