While climate change always seems to bring troubling news, few reports in the past year are more compelling than those from scientists saying our ability to reach the Paris Agreement’s goal of 1.5˚C above pre-industrial levels is pretty much out of reach. Those alarm bells have enormous implications for investors and, combined with new data on rising emissions in hotspots like the United States, mean that a hodge-podge of voluntary efforts no longer suffices. We have fewer than seven years to turn things around, and we must deploy multiple strategies to get us there.
One place to start is ending corporate lobbying and misinformation campaigns largely funded by the fossil fuel industry and its trade groups, which aim to thwart climate-forward legislation and regulation. As EDF President Fred Krupp has noted, companies should “unleash the most powerful tool they have to fight climate change: their political influence.”
Members of the Interfaith Center on Corporate Responsibility (ICCR) and other investors began engaging companies on their climate lobbying and funding of the Global Climate Coalition (GCC), whose mission was to kill the 1992 Kyoto Protocol. While the GCC ultimately succeeded in scuttling Kyoto, ICCR members succeeded in convincing GCC members like Ford Motor to quit the association, presaging its ultimate demise.
In recent years, ICCR members began meeting with and filing proposals on climate lobbying, asking companies to align their political activity with their stated net-zero emission goals. Shareholder concern about climate lobbying continues to increase and engagements have gone far beyond high-emitting companies to include banks, insurers, tech, logistics, advertising and other sectors.
In 2021, the shot over the bow of CEOs’ desks was several first-year resolutions that earned majority support, including at ExxonMobil and Norfolk Southern. As a result, in 2022, over three-fourths of the proposals filed were withdrawn after company commitments. In 2023, of the 20 proposals filed and tracked by both Ceres and ICCR members, fewer than half are going to a vote, and companies are still negotiating withdrawals.
The Global Standard on Responsible Climate Lobbying, backed by investors and networks representing $130 trillion in assets, provides reporting guidelines, particularly about evaluating and mitigating misalignment on climate policies.
Beyond engaging companies, investors are outlining their expectations to trade groups and helping companies to hold these groups accountable for any misalignments that would delay needed global climate policy. ICCR recently issued guidance that illustrates best practices in corporate climate lobbying to help us get to the 1.5°C goal. We hope companies understand that scrutiny of their political activity will only keep growing and those that continue to be work against productive climate policy will likely see legal action to hold them accountable for the damage they are causing.
The window to address the climate crisis may be closing; companies that choose to listen to their shareholders and unleash their power and influence to support true net-zero goals can make one of the most important contributions possible to address the climate crisis that negatively affects all their stakeholders.
Tracey C. Rembert
Associate Director, Climate Change and Environmental Justice, Interfaith Center on Corporate Responsibility