Not enough investors are aware of lobbying, misinformation via social media and paid search, says InfluenceMap.
Investors need to engage with big tech and fossil fuel companies over the growth of online anti-climate lobbying and greenwashing, according to Edward Collins, Director of Lobbying and Corporate Influence at think tank InfluenceMap. This follows the publication of a series of recent reports identifying rising levels of climate lobbying and misinformation online.
Fossil fuel companies are increasingly using social media, paid search and third-party media outlets to promote climate denial content or to make unsubstantiated or exaggerated claims about their efforts to reach net zero greenhouse gas (GHG) emissions by 2050. And the tech firms in control of these platforms are allowing this to happen, Collins said.
The reports highlighted that fossil fuel companies are using social media platforms to market themselves as green by over-stating their climate-related progress. They are also paying to implement search engine advertisements that appear as organic search results whenever an end-user is researching climate-related key words, such as ‘net zero’ or ‘global warming’. Further, fossil fuel companies are indirectly using their connections to media outlets to promote climate denial content.
“While investors are aware of the risks posed by traditional corporate lobbying, they haven’t fully connected the dots as to the risks posed by climate change denial content posted online,” Collins told ESG Investor. “A minority of sustainability-focused investors are beginning to use a definition of climate lobbying that encompasses the use of online tools like social media – but not enough.”
Investors need to ask fossil fuel companies how they are using the likes of Facebook or Google business ads to promote climate change and their net zero progress, Collins noted. “Does their online messaging align with science-based information on climate change? Does it align with the decarbonisation pledges and progress they have actually made? It needs to be audited before it is posted.”
If messaging by corporates isn’t aligned with climate science, it may constitute misinformation and investors should factor this into future engagement efforts and investment decisions, he warned.
Targeting anti-climate lobbying
Investors have become increasingly aware of traditional corporate lobbying via trade associations and industry bodies to put pressure on policymakers to slow, stop or change legislation. This has recently been seen in the EU, with bodies lobbying for the inclusion of gas and nuclear energy generation in the environmental taxonomy.
Nonetheless, investors are increasingly focused on monitoring climate lobbying. Almost two thirds (65%) of investors noted that aligning lobbying with the goals of the Paris Agreement is a minimum expectation of firms which strongly contribute to climate change, with 60% warning that anti-climate lobbying would be a dealbreaker, according to a 2021 global climate survey published by Institutional Shareholder Services.
Engagement initiatives such as Climate Action 100+ (CA100+) also recommend companies provide visibility of their climate lobbying activities. In February 2021, CA100+ investor signatories filed 37 shareholder proposals with US-based companies, calling for disclosure on climate-related risks and transparency around climate lobbying practices.
“We often talk about the importance of measuring Scope 1-3 emissions. But investors also need to be thinking about the future impact,” Collins said. “What percentage of emissions produced years from now will be due to companies’ climate lobbying efforts?”
InfluenceMap has labelled this the ‘Scope 4 impact’, in which the “systemic policy influencing by companies” needs to be considered by investors alongside the physical emissions produced.
Fossil fuel companies are some of the biggest spenders on ads that are designed to look like organic search results, according to research by InfluenceMap and The Guardian. Oil and gas giants ExxonMobil and Shell were among the top 20 paying for climate-related ads, in what The Guardian noted has been labelled as “endemic greenwashing”.
Eighty-six percent of Shell’s 153 climate-labelled Google ads appeared in searches for ‘net zero’, promoting its pledge to reach net zero by 2050 and align with 1.5°C of warming, the research noted. However, Shell’s energy transition strategy has actually been subject to criticism, as shareholders and NGOs argued it does not clearly define a realistic path to net zero and doesn’t account for Scope 3 emissions.
Fossil fuel companies are largely able to advertise themselves as greener and produce climate denial content because tech firms allow them to do so, Collins said.
“Paid advertisement has to pass through an assessment process by tech firms, meaning they have an opportunity to question the validity of the information before approving it,” he pointed out. “Investors can encourage these companies to develop better means of handling climate misinformation.” Possible measures include policies refusing to advertise any content promoting misinformation on climate change.
Some fossil fuel companies also promote online climate denial content via connections to media outlets, according to a report by the Center for Countering Digital Hate (CCDH), an international NGO campaigning for big tech firms to stop promoting hate and misinformation.
Its research outlined how the ‘Toxic Ten’ media websites have amassed 186 million followers on mainstream social media platforms and account for up to 69% of Facebook interactions with climate denial content. This group includes Townhall Media and the Media Research Center, both of which have funding links to ExxonMobil, CCDH said.
The Washington Times, a daily newspaper, also published the ‘Energy and Environment 2021’ special report last year, which featured sponsored content from oil and gas industry executives, CCDH noted. This included an article, ‘There is no climate emergency’, written by the Director of the CO2 Coalition, which supported former President Donald Trump’s decision to withdraw the US from the Paris Agreement.
“The Toxic Ten’s websites received nearly 1.1 billion visits in the six months prior to COP26, earning those that are part of Google’s AdSense platform an estimated US$3.6 million in revenue,” the report noted.
Another recent report published by US-based global activist organisation Avaaz highlighted that Facebook is not keeping up with the “evolving tactics of today’s climate misinformers”, allowing various organisations to rack up over 61 million views on climate misinformation posts from April to November last year. This is despite the fact Facebook pledged to include a link on climate denial posts to its own scientifically informed information page on climate change.
Avaaz’s top five “emitters of climate misinformation on Facebook” include PragerU, a media company “dedicated to promoting pro-American values”, and American TV presenter John Frank Stossel.
“Climate lobbying on social media by oil and gas companies [and others] is undoubtedly a big problem for tech firms that investors need to be aware of,” Edwards said.
Regulators are increasingly looking to hold big tech firms accountable for misinformation on their platforms. Most notably, the CEOs of Facebook, Google and Twitter had to testify in front of US Congress in March 2021 over their role in the proliferation of misinformation online.