US Companies, Are You Serious about Climate? Here’s How You Prove It
Today, the Union of Concerned Scientists (UCS) and ten other organizations that engage with businesses on environmental issues are setting new standards for corporate leadership on science-based climate policy.
Published as an open letter in The New York Times, the framework includes three essential actions that businesses serious on climate action must take:
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Open letter in New York Times to the CEOs of corporate America on climate lobbying
Advocate for policies at the national, subnational and/or sectoral level that are consistent with achieving net-zero emissions by 2050;
- Align their trade associations’ climate policy advocacy to be consistent with the goal of net-zero emissions by 2050; and
- Allocate advocacy spending to advance climate policies, not obstruct them.
The framework will be a vital tool in UCS’s campaign to hold major fossil fuel producers such as ExxonMobil and Chevron accountable for their outsize role in climate change. Here’s how.
1) Advocate
Under mounting pressure from the public, policymakers, and investors, major fossil fuel companies have begun to express support for climate policies such as a carbon tax or federal methane regulations. Too often, however, this support is abstract, theoretical, or has strings attached. Take, for example, BP’s hypocritical opposition to a proposed carbon fee initiative last year in Washington state—or pledges of financial support by BP, ConocoPhillips, ExxonMobil, and Shell to lobby for a carbon tax proposal that until recently included fossil fuel industry immunity from liability for climate damages.
2) Align
This call to action by nongovernmental organizations complements a recent statement by 200 institutional investors with a combined total of more than $6.5 trillion in assets under management urging publicly-traded corporations to align their climate lobbying with the goals of the Paris climate agreement.
Together, these moves build on similar expectations on corporate climate lobbying issued by European investors last year. About a dozen companies have committed to reviewing the climate policy positions taken by trade associations and other business groups they support. Several have completed such a review and acted on the results (with some limitations, as I explained in my blog about Shell’s review).
Inconsistencies between fossil fuel company statements and actions on climate change are a corporate governance issue, an investment risk, and even a potential legal liability. ExxonMobil is a case in point. The company told investors that it applied a price on carbon in its internal accounting as a proxy representing increasing regulatory costs related to stronger climate policies in the future. Last year, the New York Attorney General filed a lawsuit alleging that ExxonMobil engaged in a “longstanding fraudulent scheme” to deceive investors about how it was managing climate risks to its business. That case goes to trial next week—stay tuned.
3) Allocate
The framework also calls on companies to put their advocacy money where their mouths are. As The Guardian’s series on The Polluters has revealed, the fossil fuel and auto industries are still bankrolling efforts to block climate policies despite their professed support for climate action. UCS continues to document ExxonMobil’s funding of think tanks and lobby groups that reject established climate science and openly oppose the company’s stated positions—to the tune of $1.5 million in 2017 and more than $36 million over the period 1998-2017.
No company that says one thing and pays for others to shout the opposite can be considered a climate leader.
Setting Clear Expectations
“Scientists have made it clear we need to reach net-zero by midcentury to avoid devastating climate impacts—and we won’t get there unless we slash emissions quickly. Growing corporate climate commitments are a necessary start, but they are no substitute for moving the federal government to address this problem. Today we are setting a clear expectation that good corporate citizenship means strong advocacy for climate solutions.”
—Kenneth Kimmell, UCS President
Of course, major fossil fuel companies must dramatically reduce emissions from their operations and the use of their products if we are to avoid the worst effects of climate change. Their own shareholders are increasingly demanding that they adapt their business models for the transition to a zero-carbon energy system. But strong public policies informed by the best available science are essential to level the playing field, adjust the incentives, and prevent backsliding—and consistent, transparent advocacy from corporations across all sectors of the economy is needed now to accelerate the adoption of such policies.
UCS and our allies are raising the bar for corporate climate leadership—and we stand ready to hold U.S. corporations accountable to our shared expectations. As leading companies respond by stepping up their advocacy for science-based climate policy, any company whose actions and advocacy don’t match its climate statements will face the glare of public scrutiny, rising concern from investors, and intensifying pressure from organized activists.
Read the open letter from UCS’s Ken Kimmell and the heads of BSR, C2ES, CDP, Ceres, Conservation International, Environmental Defense Fund, The Climate Group, The Nature Conservancy, World Resources Institute, and World Wildlife Fund online here.
