Texas-based oil company ExxonMobil has sued two ESG investors in an attempt to prevent their climate proposal from going to a vote at its annual investor meeting.

Investor activist group, Follow This and registered investment adviser, Arjuna Capital have called on Exxon to step up the pace of its’s reductions in greenhouse emissions.

Exonn filed the lawsuit against the investors at a US district court in Texas on Sunday, saying that the proposal violates the Securities and Exchange Commission (SEC) investor petition rules.

The two investment companies want Exxon to set Scope 3 targets to reduce emissions produced by users of its oil and gas.

Exxon currently aims to reach net-zero by 2050 for Scope 1 and Scope 2 emissions, which is the pollution from its production processes and the energy it consumes. However, it is the only one of the five major Western oil companies which does not have Scope 3 targets, covering emissions arising from consumer use of its products.

ExxonMobil has argued that Follow This and Arjuna proposals break the US regulator’s rules that are designed to stop shareholders being able to manage business decisions through proposals.

Exxon has asked the court to make a decision by 19 March, before its annual meeting on the 29 May.

In recent years the SEC has eased its policies for shareholder proposals, a move that has led to an increase in investor petitions to US companies. However, the outcome of this case will set a precedent to other oil and gas companies, and climate groups.

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