The groundswell of companies committing to achieve net-zero emissions by 2050 or sooner, to align with climate science and the goals of the Paris Agreement, has been encouraging. Investors continue to play a significant role in garnering many of these climate commitments, including through engagement initiatives like the Climate Action 100+, where approximately half of the focus companies have committed to set net-zero goals. Still, while these commitments are essential, investors require assurance that companies are taking congruent actions to ensure their public policy activities – and those of their trade associations –also align with global climate goals.
Scrutiny of climate lobbying has become an increasing investor priority in the past few years. European investors have won scores of commitments, including assessments published by BP, Royal Dutch Shell, Equinor, and Unilever. With these assessments, companies have disclosed more about their policy positions and even put certain trade associations on “watch.” In a few instances, companies have cancelled memberships in trade groups that are not interested in prioritizing climate.
In the United States, investors have raised climate concerns within conventional lobbying engagements for over a decade. In 2019 and 2020, Boston Trust Walden co-led a Ceres initiative asking approximately 50 major U.S. companies on the Climate Action 100+ focus list to conduct and publish climate lobbying assessments. Last proxy season, Chevron shareholders voted 53 percent in favor of a climate lobbying resolution led by BNP Paribas Asset Management and Boston Trust Walden. In response, the company issued its first climate lobbying report in January. Similarly, after a series of investor dialogues, ConocoPhillips also published its first-ever climate lobbying assessment.
This year, numerous companies are facing shareholder resolutions on climate lobbying, with the coordinating assistance of Ceres, as well as through a new initiative being organized by the Interfaith Center on Corporate Responsibility (ICCR). A number of companies have already agreed to institute climate lobbying reviews, while others continue to stifle action. For example, ExxonMobil faced a proposal filed by BNP Paribas Asset Management, Boston Trust Walden, and other investors, but has challenged the proposal at the SEC.
As climate-related regulations and legislation expand this year and in the years ahead, companies must demonstrate how they and their trade associations support favorable policymaking. It is promising that companies are reporting more, and it’s encouraging to see groups like the Business Roundtable and the U.S. Chamber of Commerce rhetorically adjust their positions on climate. But the real work of establishing climate policies that scale and accelerate solutions has yet to unfold. Companies and investors alike must magnify their influence to advance smart climate policymaking and abandon the status quo. The urgency of the climate crisis demands it
Laura Devenney
Senior ESG Research Analyst, Boston Trust Walden
Tim Smith
Director of ESG Shareowner Engagement, Boston Trust Walden