Exxon Has a Tough Green Activist

It’s only a slight overstatement to say that, every year, every publicly traded oil company asks its shareholders to vote on a proposal like this:

Oil companies are at the center of debates over climate change. Many investors care a lot about climate change. Shareholders of public companies are, in some loose sense, the owners of those companies; they elect the directors of the companies and have some authority to tell those directors what to do. In particular, a shareholder of a U.S. public company can submit proposals for other shareholders to vote on in the company’s annual proxy statement. Companies have to include the proposals in their proxy statements — that is, put them to a vote of shareholders — unless they can find some reason to omit them. The rule (Rule 14a-8) gives companies lots of reasons to omit proposals, and there is a certain amount of technical lawyering involved in getting a proposal into a proxy statement. In particular, companies can omit a proposal that “deals with a matter relating to the company’s ordinary business operations,” which means that shareholders can’t really submit proposals like “you should stop drilling for oil so much.” “You should write a report about oil drilling” is usually fine.