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Least Paris-aligned Firms are Most Engaged on US Climate Policy

US energy and utilities sectors spending more time and effort on climate lobbying than more supportive industries.  

Climate policy engagement in the US has grown, but firms with the highest engagement intensity are from higher polluting industries, data from InfluenceMap suggests. The think tank has launched a new platform which ranks and profiles over 130 of the “largest and most climate-relevant” US companies.  

The platform issues performance band grades of A+ to F to measure a company’s climate policy engagement, which combines scores assessing its direct engagement (organisation score) and that of industry associations (relationship score). It additionally provides a summary of its scoring, including a climate lobbying overview of individual firms.   

InfluenceMap’s data also shows that companies with worse grades and greatest misalignment with the objectives of the Paris Agreement have higher levels of engagement intensity. The platform categorises engagement intensity of 12% and below as representing minimal engagement, 13%-24% as active engagement and 25% and above as strategic engagement.   

Trends in engagement intensity  

Utilities firm Pacific Gas & Electric Company (PG&E) lead in engagement intensity on InfluenceMap’s platform at 58%, with it and fellow utilities firm Exelon (56%), being the only companies scoring over 50%. Both of these companies have a C+ performance band scores, which indicates mixed alignment with the Paris Agreement.  

InfluenceMap said while PG&E “demonstrates positive and active engagement with climate change policy”, it highlights the misalignment of the firm’s positive positions with its board-level membership in the American Gas Association and California Chamber of Commerce, which both actively lobby against state and federal climate policies. The company has recently come under fire due to its response to storms causing numerous power outages in California. Exelon has mostly positive positions on climate policies, with its performance band score being held back by its relationship score at 39%.   

Energy and utilities sectors had the highest intensity engagement by industry type. No energy sector firm received a grade higher than a D+, with the vast majority being judged by InfluenceMap as misaligned with the Paris Agreement. Chevron, the company with the joint-third highest engagement intensity, has not supported a number of climate regulations, as well as actively lobbying to maintain the role of gas in the future of energy and retaining memberships to several industry associations engaged in obstructive climate lobbying.   

The engagement intensity of firms with higher performance band scores tended to be lower, with only two of the seven companies with a B score or higher having an engagement intensity above 17%.  

Kendra Haven, InfluenceMap’s US Program Manager, said the intensive engagement of US utilities and energy firms illustrated a “trend that we see globally”, with the “most negatively-engaging corporate actors tend to be the most active, leaving a deficit in active, positive advocacy on climate policy by huge portions of the corporate sector”.   

Companies in the energy and utilities sectors have a vested interest in lobbying against climate-positive legislation, and despite many of them stating public support climate action in practice they are either directly lobbying against it or being associated with parties involved in obstructive climate lobbying.   

“The implications are a clear obstruction of climate policy both federally and in the states. Utilities in particular wield significant power in their state capitol, with a single utility sometimes providing power to over half the population, and can really steer the direction of climate policy in that state”, said Haven.   

Actions on lobbying  

Climate lobbying in Europe previously caused significant delays to finalising the climate-related components of the EU’s green taxonomy, and eventually saw nuclear and gas being included as environmentally sustainable economic activities. Engagement intensity continuing to be dominated by environmentally-unfriendly lobbyists could see similar issues occur in the US.  

US investors have long sought greater transparency over the lobbying and corporate funding activities of investee firms. In the two years covered by the latest US SIF Foundation Report on Sustainable Investing Trends, 288 proposals were filed on proposals on political spending and lobbying. “Continuing a trend of several years, many of the targets were companies that have supported trade associations that oppose regulations to curb greenhouse gas emissions”, the report said.   

Non-profit Ceres’ Responsible Policy Engagement Analysis 2022 report found that there was significant progress in the number S&P 100 companies advocating for climate action compared to 2021, with 50% of companies having lobbied for Paris-aligned policies. Yet, just under three-in-ten (29%) of these companies lobbied against certain Paris-aligned policies, even if they had publicly lobbied in support of other climate-positive policies.  

US State Comptroller Thomas DiNapoli recently looked to curb political lobbying through shareholder proposals calling on seven corporations in the New York State Common Retirement Fund’s portfolio to disclose their direct and indirect political spending. Should the proposals win wider support, companies could face greater accountability through their active or passive roles in anti-climate lobbying.   

Haven said that to “really shift this trend, we would need to see new corporate players from various sectors – consumer staples, information technology – stepping up to support climate policy strategically”.  This shift would also include firms “holding their industry associations accountable, since many of these groups engage in powerful, anti-climate advocacy in the name of their members”.  

InfluenceMap plans to further expand the platform to state level, starting with California, Texas, New York, Florida, and Illinois, providing an overview of corporate lobbying on live climate policy debates and noting critical trends in climate lobbying in that state. With “many states [being] likely to introduce new, more ambitious climate policies in 2023” according to Haven, this expansion will provide further tracking on lobbying activities.    

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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