In a significant victory for climate activists, a federal court in Texas has dismissed a lawsuit filed by ExxonMobil against activist shareholders. The lawsuit, aimed at Arjuna Capital, centered around the shareholders' push for the oil giant to reduce greenhouse gas emissions and address its contribution to anthropogenic climate change.

The dismissal came after a lawyer representing the activist investor group agreed not to pursue their efforts to raise climate science as an agenda item at ExxonMobil's annual meetings. The dispute revolved around whether climate risk should be considered a legitimate business concern and represented a corporate pushback against shareholder proposals.

ExxonMobil's lawsuit had raised concerns among investors, as bypassing regulatory channels could potentially restrict shareholders' ability to bring up concerns with public companies. However, US district court judge Mark Pittman ruled that ExxonMobil's claim was no longer valid following Arjuna's decision to unconditionally and irrevocably agree not to submit future proposals regarding the company's greenhouse gas emissions.

ExxonMobil responded to the ruling, stating, "Our lawsuit put a spotlight on the abuse of the shareholder-access system. The court has made it absolutely clear that Arjuna cannot continue abusing the process. Shareholder democracy is only as strong as the rules that govern it, which must be fairly and consistently applied."

The Netherlands-based climate group Follow This, which was involved in the lawsuit along with Arjuna, hailed the dismissal as a victory for climate activists. Follow This founder Mark van Baal stated, "The dismissal of Exxon's lawsuit against shareholders is a victory for all investors who want to safeguard the long-term future of US oil and gas companies and the global economy in view of the climate crisis."

Van Baal also emphasized that this dismissal had not compromised shareholders' right to file proposals and that no precedent regarding the application of SEC rules and the use of shareholder rights had been established. The withdrawal of the lawsuit was described as a tough decision, but ultimately a necessary one for the greater cause of responsible investing.

ExxonMobil had initially sued both Follow This and Arjuna in January and had refused to drop the case even after the shareholder petition was no longer pursued. The company cited concerns over the likelihood that similar resolutions could be filed in the future. ExxonMobil's stance was supported by the US Chamber of Commerce and the Business Roundtable trade groups, who expressed concerns about government regulators allowing shareholder proposals that push social and political agendas.

The dismissal of the lawsuit represents a significant development in the ongoing battle between activists and major energy companies to address climate change and reduce greenhouse gas emissions. With the court ruling in favor of shareholders, it highlights the importance of shareholder participation in shaping corporate strategies to combat the growing climate crisis.