Institutional Investors Demand Lobbying Transparency from US Majors

Corporate greenhouse gas emitters must disclose how climate lobbying aligns with climate science.

Almost fifty of the largest US-based corporations from high-emitting sectors are under increasing pressure to prove their climate lobbying supports the goals of the Paris Climate Agreement.

The group of investor signatories calling for transparency includes big names such as BNP Paribas Asset Management, Boston Trust Walden and the California Public Employees Retirement System.

“Companies should establish the Paris Agreement’s goals as their North Star when meeting with regulators and legislators,” said Adam Kanzer, Head of Stewardship, Americas at BNP Paribas Asset Management.

Letters were addressed to CEOs and chairs of boards at high-emitting companies from sectors such as oil and gas, electricity generation and transportation, stating that both direct and indirect lobbying through trade associations should be Paris-aligned, with leaders taking action if there is misalignment.

This comes just months ahead of the Climate Action 100+ Net-Zero Company Benchmark launch. With more than US$47 trillion in collective assets under management, Climate Action 100+ is the world’s largest investor-led initiative on climate change, with 161 focus companies (including the 47 notified by investors this month) to be benchmarked on their climate progress against a “key set of indicators that reflect the goals of the initiative”.

Pressure for greater transparency from investors has already yielded results on both sides of the Atlantic. In Europe, companies including BP, Equinor, Shell, and Total, have published analyses of their trade associations’ positions on climate change and their degree of alignment with their support for the Paris Agreement.

However, there remains some resistance. In a report from Transition Pathway Initiative report on the European oil, gas and coal industries, a number of firms were marked down for failing to disclose their involvement with organisations involved in climate lobbying, as previously reported by ESG Investor.

“The urgency of the climate crisis means that companies must not only take bold in-house actions to reduce emissions to net-zero and improve governance of climate risk, they must also look beyond their four walls and publicly advocate for federal and state policies to mitigate climate change. Investors are looking at those advocacy efforts and if corporate trade association lobbying matches what companies are publicly stating,” said Mindy Lubber, CEO and President of US nonprofit Ceres.

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