NY Attorney General Asks Group Of Activists To Testify Against ExxonMobil

The Office of the Attorney General (OAG) in New York has called numerous activist shareholders with long histories of aggressive climate shareholder activism, and who have been particularly vocal about their disdain for ExxonMobil, to testify in its case against the company.

Although these shareholders will likely be presented as normal investors, the witnesses are actually activist shareholders who can be expected to bring their political agendas to the witness stand, which is precisely why the NY OAG has called on them to testify.

New York Supreme Court Justice Barry Ostrager, who is presiding over the trial, will ultimately have to decide whether ExxonMobil misled its investors on how it accounts for the potential future costs of climate policies.

The NY OAG has stacked the deck, as these witnesses are guaranteed to claim that they feel misled

Witness duo harasses energy companies “every year”

Two of the activist shareholders being called to testify are Natasha Lamb, Co-Founder of Arjuna Capital LLC and Danielle Fugere, President of As You Sow, a non-profit that specializes in shareholder activism.

The two organizations have attempted to hijack the shareholder proposal process with unrealistic proposals that have little to do with running a company and a lot to do with pressuring companies to accept their radical anti-energy agenda.

In fact, As You Sow’s misuse of shareholder proposals was recently called out by Rupert Darwall in an op-ed:

“Describing itself as the nation’s nonprofit leader in shareholder advocacy, As You Sow aims to bring about ‘lasting change that benefits people, planet, and profit.’ It has run campaigns against fracking and in favor of wind and solar (‘clean tech is at the heart of a responsible, sustainable energy future’) and workplace equity disclosure statements (’investors need access to meaningful policies and practices on workforce composition, recruitment, retention, pay, promotion practices as well as workforce safety, sexual harassment, social mobility, and justice’). This kind of conduct is an abuse of corporate governance.”

Lamb and Fugere have paired up numerous times to push their agenda onto energy companies.

In 2014, ExxonMobil released a report called “Energy and Carbon – Managing the Risks,” which was born out of an agreement between the company and the two activist organizations.

ExxonMobil was originally commended by Lamb for being “the first energy company to respond to investor concerns and, in exchange for withdrawal of the proposal, commit to publishing a report on how it assesses carbon asset risk.”

However, the very next year Arjuna criticized the report because “Exxon ignored major risk factors projected by the International Energy Agency and Wall Street energy analysts regarding stranded assets.”

As You Sow also put out an op-ed alleging that ExxonMobil was misleading investors, with As You Sow’s CEO parroting talking points from the “Exxon Knew” campaign.

In 2018 their organizations asked ExxonMobil to detail “how it would change its asset mix in a world emitting less and less carbon dioxide.”

The SEC quashed their “micromanaging” activist proposal because the company had already answered their question, responding that hydrocarbons would continue to power the world for the foreseeable future and therefore there was a minimal risk that it would be impacted by reduced demand.

Arjuna and As You Sow had simply rejected ExxonMobil’s answer and were now harassing the company to try to get it to say what they wanted it to say.

That same year, Chevron’s shareholders rejected an As You Sow methane resolution that ignored the company’s pledge to reduce methane emissions from natural gas production.

In 2019, the organizations paired up again to pressure the companies into creating a new climate change board within their organizations.

The resolution failed to garner even 10 percent of the votes at ExxonMobil’s annual shareholder meeting.

Faith by Day, Activist by Night

Two witnesses from the religious community have also been called to testify. While at a glance, their inclusion may seem odd, both have an extensive history of pressuring ExxonMobil.

In 2019, the SEC allowed ExxonMobil to block a shareholder proposal from New York State’s Pension Fund and the Church of England to force the company to set emission targets, ruling it would “micromanage the company by seeking to impose specific methods for implementing complex policies in place of the ongoing judgment of management as overseen by its board of directors.”

The SEC’s ruling is evidence that the proposal constituted a misuse of the shareholder proposal process.

In response, the Presbyterian Church joined a retaliatory effort against the company to withhold support for the re-election of its directors.

OAG witness Robert Fohr, Director of Faith-Based Investing and Corporate Engagement for the Presbyterian Church, was quick to voice his support:

“Voting against the reelection of all directors is a necessary escalation in the engagement with Exxon Mobil.”

Witness Sister Patricia Daly began pressing companies about greenhouse gases as early as 1988 and has attended almost every annual general meeting for ExxonMobil since the 1990s.

She led a group of “activist shareholders” to pressure the company to phase out fossil fuels in 2015 and even received a New York Times feature on her activism within the company.

Despite owning a few shares within the company, she continues to attempt to hijack the shareholder resolution process:

“Daly’s order owns about 300 of the 5.5 billion ExxonMobil shares outstanding, but she has used those few shares to keep the company talking about an issue that it would just as soon ignore.”

OAG Calls on Fellow Activist Public Officials

The OAG is also calling a representative from New York’s Office of the Comptroller to the stand.

Michael Garland serves as the Assistant Comptroller to Scott Stringer, a vocal proponent of litigation against the company, divestment from fossil fuels, and frequent attendee of climate rallies.

In 2018, Stringer announced his decision to divest city pension funds from fossil fuel companies alongside 350.org’s Bill McKibben and Naomi Klein, prominent “Exxon Knew” activists who are actively supporting New York’s lawsuit.

Stringer has been harshly criticized for prioritizing these political moves over simply generating sufficient returns to meet the state’s pension liabilities.

The New York Post editorial board accused Stringer of being “so busy playing politics that his office can’t even get its numbers right.”

The former vice-chairman of the New York City Fire Pension Fund criticized Stringer’s management of the city’s pensions, noting that “Stringer has shown repeatedly that his interests are to further his political agenda, not to maximize our pension funds transparently and responsibly.”

Conclusion

The OAG’s list of witnesses is teeming with individuals who are biased against ExxonMobil, and who continue to pressure energy companies to adhere to their radical anti-energy agendas, despite how those agendas may harm companies’ operations.

Every time the company releases a report disclosing more information to address activists’ concerns it is rejected by the activists, who then move the goalposts year after year. Their participation in this trial is just the latest escalation of their tactics.

Read more at EID Climate