American oil and gas company ExxonMobil fended off a major push to unseat all of its board directors after suing two activist investors who sought to put emission standards on the company.

The attack was headed by the California Public Employees’ Retirement System (CalPERS), which has a $1 billion stake in Exxon, in protest of a suit launched by the oil giant in January against activist investors from Arjuna Capital and Follow This. The two activist investors submitted a proposal for the 2024 proxy statement calling for Exxon to reduce its direct and indirect emissions, prompting the company to file a suit in January in an attempt to stop shareholders from continually resubmitting failed proposals. (RELATED: Oil Lobby Working With Republicans Behind The Scenes To Push ‘Gateway’ To Carbon Tax)

“CalPERS did not take this vote lightly, but the significance of what’s at stake can’t be understated,” CalPERS CEO Marcie Frost said in a statement Wednesday. “ExxonMobil’s lawsuit threatens to silence shareholders everywhere by stripping away their rights and role in improving a company’s bottom line.”

All of the board was elected with between 87% and 98% of the votes cast, compared to a range of 91% to 99% in 2023’s shareholder meeting, Exxon told the Daily Caller News Foundation.

“Today our investors sent a powerful message that rules and value-creation matter,” Exxon told the DCNF after the vote. “Their vote signals a belief that we are on the right track by overwhelmingly re-electing our directors and soundly defeating all four proposals that would have hampered our ability to create long-term value by providing the world with the energy and products it needs while investing billions to reduce carbon emissions in our own business and others. We expect the activist crowd will try and claim victory on today’s vote, but common sense should tell you otherwise in light of the large margin of the loss.”

CalPERS argues that the suit by Exxon sets a dangerous standard for future proposals since traditionally all shareholder issues are handled by the Securities and Exchange Commission. The public pension claims that its decision to vote against the board is not because of the subject of the activist investors’ proposal but because of the precedent that the lawsuit sets.

“Today’s annual meeting produced a major win for Exxon shareholders,” Matt Cole, CEO of Strive Asset Management, which was at the meeting, told the DCNF. “The approval rate for the Exxon board decreased only 1%, to 95% from 96% last year, despite CalPERS’ unprecedented PR campaign. To be clear, CalPERS, Follow This, and Arjuna Capital wished to shut down Exxon’s oil and gas business and investors rejected that overwhelmingly.”

BREAKING: ExxonMobil retains its board of directors, successfully fending off an attempt from pro-ESG activist investors to punish the company. Major win for @exxonmobil shareholders – corporate courage is how we get politics out of business and return to fiduciary duty.

— Isaac Willour (@IsaacWillour) May 29, 2024

A group of state treasurers and government fiscal officers from mostly blue states joined the push to vote against the board of directors, sending a letter last week to top asset managers, including JPMorgan Chase and BlackRock, asking them to vote against Exxon’s board and CEO.

“Exxon’s actions continue to display disregard for shareowners and their right to have a say in the direction of the company,” California State Treasurer Fiona Ma said in an announcement. “I’m proud to join with my colleagues from around the country to help protect this fundamental governance principle and hope these asset managers do the same.”

A federal judge in Fort Worth, Texas, ruled May 22 that Exxon can proceed with its lawsuit against Arjuna, even though the proposal had been rescinded months prior and would no longer be voted on at the shareholder meeting, according to Bloomberg.

CalPERS did not immediately respond to a request to comment from the DCNF.

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