On Wednesday, ExxonMobil, the largest energy company in the U.S., will face yet another challenge to its leadership. The California Public Employees Retirement System (CalPERS), the largest state public pension fund in the U.S., is leading a group of pension funds to vote against all of Exxon’s directors. Glass Lewis, one of the largest proxy advisory firms in the world, is recommending voting against Exxon’s lead independent director.

The reason for the latest uproar is Exxon’s recent lawsuit against two activist investors, Arjuna Capital and Follow This, for continuing to push shareholder resolutions that require Exxon to reduce greenhouse gas emissions and, over time, stop producing oil and gas, no matter the cost to the firm and its shareholders.

Exxon argues that its lawsuit is necessary because the Securities and Exchange Commission, which by law is supposed to act as a neutral arbiter in determining whether shareholder resolutions can be dismissed or must put to a vote, changed its policy to allow resolutions unrelated to the company’s ordinary business purposes but that had “broad societal impact.” Without the SEC as a gatekeeper, Exxon will have to spend millions every year to defeat activist proposals that would destroy billions of dollars of shareholder value if implemented.

A remarkable development is the public support that the U.S. Chamber of Commerce and the Business Roundtable, which have retained the law firm of Lehotsky Keller¾known for its efforts (so far successful) to stop the SEC’s climate disclosure rule¾to write a brief of amicus curiae supporting ExxonMobil’s lawsuit.

The brief contains some pointed rebukes of environmental, social and governance (ESG) activism, concluding that until the courts weigh in, activist investors have free rein to “push an ideological agenda divorced from the success of the corporation—or worse, as in this case, directly antagonistic to it.” As the brief makes clear, “success” refers to financial success and sustainability, not to success in achieving environmental or social goals.

What’s remarkable is not the brief itself, but how far it departs from the recent positions the Chamber and the Roundtable have taken on this issue. In August 2019, the Roundtable issued the first update since 1997 to its policy statement on the purpose of a corporation. Signed by about 200 CEOs of America’s largest companies, it concluded that “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

The new statement represented a marked shift in the Roundtable’s stance, which previously focused solely on delivering value to the company’s shareholders. Two years later, in May 2021, one of the signers of that document, Darren Woods of ExxonMobil, had three of his board members replaced because of a dispute over the company’s stance on climate change and its reluctance to invest in low carbon businesses. It seemed that “stakeholder capitalism” was becoming de rigueur for corporate America. Those companies not on board with it could expect a challenge to their leadership from activist shareholders and a growing set of powerful institutional investors.

But now the tables have turned. Exxon, fresh off a couple of the most profitable years in its history, is taking the fight to the ESG activists. The SEC is in retreat, having pulled its climate disclosure rule until the lawsuit over that rule is resolved. The Business Roundtable and the U.S. Chamber, which appeared to be in a headlong rush to support stakeholder capitalism, are now speaking out against ideological agendas that are “divorced from the success of the corporation.”

At Exxon’s annual meeting on May 29, the ball will be in the court of the big institutional investors, especially the Big Three asset managers¾BlackRock, Vanguard, and State Street¾who hold a large portion of Exxon’s stock. A vote against Exxon’s leadership will show a continuation of their past support for climate change activists pushing to force oil and gas companies to change their business models. A vote in favor of Exxon’s leadership would signal that Wall Street is reaching a limit in its embrace of ESG principles and its willingness to capitulate to political activists.

If the statements in the Business Roundtable’s amicus brief are an indication of changing attitudes within corporate America toward ESG activists and their public pension allies, it is likely that Exxon’s leadership will come out on the winning side of this battle. The biggest winners will be millions of Exxon shareholders, who want the company to generate the best financial returns for them, and the vast majority of Americans, who want corporations to leave politics to the politicians and to focus on creating products and services that improve lives and increase prosperity.