Shareholders Escalate Campaign Pressing Companies to 'Walk Their Talk' on Climate Lobbying

With the stakes posed by the climate crisis higher than ever and public policy solutions clearly needed, investors have filed a record 46 shareholder resolutions for 2022 corporate proxies seeking information about companies’ climate lobbying practices. And in a sign of the growing influence of resolutions after last year’s historically high number of majority votes on climate-related proxy items, companies have already negotiated agreements on a record 18 lobbying-focused resolutions, vowing to take the actions sought in exchange for shareholders withdrawing resolutions.

The lobbying resolutions filed so far this year—with two more expected—illustrate investors’ realization that effective policies aligned with the latest climate science are necessary if the world is to prevent global average temperature rise from exceeding 1.5 degrees Celsius and avert irreversible climate catastrophes. The resolutions also underscore a realization that corporate voices hold huge sway in Washington and state capitals. With the Intergovernmental Panel on Climate Change (IPCC) warning that governments and civil society must act now to slash greenhouse gas emissions, and with Congress poised to reconsider climate and clean energy investments, investors say companies cannot ignore the importance of climate-forward policy.

“Companies are quickly grasping this new dimension of responsible business – to become more transparent and demonstrate how they’re overseeing climate-related lobbying activities both by their government affairs teams and their trade associations. Investors expect this will lead companies to take more consequential action to support smart climate policymaking,” said Laura Devenney, senior ESG analyst.

Boston Trust Walden filed climate lobbying resolutions at Amgen, JPMorgan Chase & Co, Merck, Union Pacific, United Health and a general lobbying one at UPS. The firm subsequently withdrew all but the UPS resolution after negotiating agreements with the other five companies to provide the disclosure sought. For instance, JPMorgan agreed to provide a report on its own lobbying and that of its trade associations.

Investors consider climate-aligned lobbying practices so important that (today) a global group of 10 major investors and investor networks, including BNP Paribas Asset Management, and AP7, as well as Ceres and ICCR, are launching a Global Standard on Responsible Climate Lobbying. This Global Standard helps companies and investors to assess and ensure that all climate lobbying efforts are directed towards the attainment of the Paris Agreement goals. The 14 indicators within the Standard are the culmination of academic research, shareholder proponent learnings, and an extensive consultation, which attracted more than 220+ responses from 19 countries.

This international effort builds on existing calls for companies in the U.S. and elsewhere to disclose climate lobbying and practice transparent and accountable policy advocacy.

Last year, Ceres published its Practicing Responsible Policy Engagement benchmark of climate lobbying practices by the largest US corporations (S&P 100) and found that while nearly all the companies have goals to reduce greenhouse gas emissions, more than half lobby against those interests or support trade associations that fight climate regulation.

Climate Action 100+, the largest investor initiative on climate in the world involving 615 investors responsible for $65 trillion in assets, issued a Net Zero Company Benchmark that includes recommendations on how companies should establish a reporting mechanism to ensure that investors know that both the company and all its trade associations are lobbying consistent with the goals of the Paris Agreement.

This year’s 46 lobbying resolutions, filed across a broad array of industries from oil & gas, utilities, consumer goods and tech, include 21 that seek proof that a corporation’s climate lobbying is aligned with the Paris Agreement. Almost all seek transparency about both a corporation's own climate lobbying and that of the trade associations it supports. Four proposals call on companies to align their lobbying with their publicly stated values and include a focus on climate-related political spending.

Signatories to Climate Action 100+ filed nine climate lobbying resolutions at North American focus companies seeking Paris-aligned lobbying. On two, the filing investors and focus companies negotiated agreements and the filers withdrew the resolutions. Ceres is a co-founder of Climate Action 100+ and coordinates investor engagements with North American focus companies.

Members of The Interfaith Center on Corporate Responsibility (ICCR) filed many of the resolutions.

“The tenor of the engagements with U.S. companies this year has really been striking on this issue,” said Tracey Rembert, associate program director for climate at ICCR. “Companies seemed much more prone to asking what practices they should consider for aligning their policy influence with their stated climate commitments, as well as looking for feedback on the practices investors consider most critical and how shareholders are defining and assessing indirect lobbying activities—an issue becoming front and center regarding the roadblocks to passing many climate bills.”

While more companies are publicly committing to climate actions and setting net zero emissions goals, many also belong to and support organizations that lobby against policies for mitigating climate change, such as the U.S. Chamber of Commerce and the American Petroleum Institute.

According to a study by Climate Action 100+ and Influence Map, 81% of the 166 companies on Climate Action 100+ focus list belongs to one or more trade association that is lobbying against climate legislation. And only 10% of the focus companies engage in climate lobbying that aligns with the Paris Agreement goals.

“The influence of trade associations on policymaking cannot be underestimated and deserves thoughtful scrutiny and action by their company members. For example, the U.S Chamber of Commerce and Business Roundtable together have spent over $2 billion on lobbying since 1998,” said Timothy Smith, senior ESG advisor at Boston Trust Walden. “Unfortunately, some major trade associations are still trying to undercut and block much-needed climate policies – but companies can’t afford to have their climate goals undermined by the very trade associations they fund and support. At this crucial moment, companies and trade associations alike should be actively supporting strong climate policies.”

Lobbying by some companies and powerful trade associations against U.S. policy proposals designed to mitigate climate change has hampered the United States’ ability to meet its Paris Agreement commitment of cutting greenhouse gas emissions in half by 2030 and to net-zero by 2050. The U.S. Congress continues to consider $550 billion in climate mitigation and clean energy investments in legislative provisions that many have described as the most significant climate legislation in a decade – and possibly the last chance to pass such legislation in several years.

Some corporations and trade associations cloak their anti-climate lobbying in political spending. According to a report by the Center for Political Accountability, 75 large companies that have announced climate goals are members of organizations that financially support state attorneys general challenging climate regulations.

About Ceres

Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future. For more information, visit ceres.org and follow @CeresNews.

About the Interfaith Center on Corporate Responsibility (ICCR)

Celebrating its 51st year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $4 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn and Facebook.

Media Contact:
Barbara Grady
grady@ceres.org
510-334-2690