Public promises, private lobbying: Investors want clarity on corporate climate activity

ExxonMobil, Sempra Energy, Phillips 66, United Airlines and railroad giant Norfolk Southern have urged shareholders to vote against proposals that would oblige them to report how their political activity is or is not in line with the goals of the Paris Climate Agreement, particularly with their involvement in trade associations and other third groups.

Other companies, some of which are major polluters, have taken the opposite approach. At least six have published, or will do, additional information about their lobbying, including Duke Energy, Entergy, AIG, CSX, FirstEnergy and Valero.

Chevron released its first lobbying report in December after the majority of shareholders voted for a similar proposal last proxy season, as well as ConocoPhillips afterwards get in touch with investors.

Lobbying spending in general has been a cause for concern. Investors fear that a company’s political activity runs counter to its stated goals or poses a risk to its bottom line. While climate lobbying has taken center stage, dozens of companies have proposals for their wider lobbying and trade association memberships. For example, shareholders are asking Boeing about its influence on regulators following the breakdown of their 737 Max aircraft. Questions at Citigroup and Best Buy focus on racial justice.

Called Swedish Pension Fund AP7 Corporate lobby for the climate “A widespread global problem” hampering the progress of the Paris Agreement.

The surge in shareholder campaigns this year coincides with President Joe Biden’s pledge to put the US on a net-zero emissions path by 2050 and decarbonize the US energy sector by 2035.

At a global climate conference on Thursday, Biden is expected to announce ambitious targets to reduce US emissions. And his administration is working to inform Congress about an infrastructure and jobs package that would include investments in electric vehicles and renewable energy – a plan that has already sparked corporate lobbying.

“Public order must match the ambitions of the corporate climate,” said Laura Devenney, senior environmental, social and governance analyst at Boston Trust Walden, who co-submitted the Exxon shareholder proposal with BNB Paribas.

A mismatch could pose a reputational risk to a company. Worse still, it could undermine government efforts to combat climate change, which, if not controlled, could disrupt the global economy, Devenney said.

Oil, gas, and chemical companies are influential in Washington. The industry spent more than $ 101 million According to the Center for Responsive Politics, lobbying is among the highest spending industries in 2020 behind health, technology and insurance giants.

Companies fighting the lobbying proposals claim that they are already transparent about their political activities. That defense didn’t work for Exxon and Sempra, however, which failed to convince the Securities and Exchange Commission to block a vote on the proposals.

Exxon spokesman Casey Norton pointed out An oil major report released in February the listed trading groups to which they contributed $ 100,000 or more.

Exxon supports the goals of the Paris Agreement and follows a “rigorous internal review and oversight process” to ensure that its lobbying is in line with its political positions, the report said.

Sempra spokeswoman Christina Ramirez responded to questions also referred to an annual report This includes the company’s political donation and trade memberships.

Sempra, which owns the country’s largest natural gas utility, Southern California Gas Co., said its lobbying is in line with the Paris Agreement and California’s goal of becoming carbon neutral by 2045.

Unlike European competitors who are developing cleaner energy sources, Exxon and Sempra are largely sticking to business models that are heavily based on fossil fuels.

To compensate for this, Exxon plans to use the carbon capture technology and reduce methane emissions. SoCalGas announced in March that it will achieve net zero emissions by 2045 through the use of lower-emission natural gas and biomethane, a goal that climate advocates criticize as empty promises.

Regulators, investors and lawmakers want SoCalGas to give its endorsement after state regulators learned that the utility used customer payments to mine fossil fuels. The utility funded the Californians for Balanced Energy Solutions, a nonprofit front group that campaigned against electrification policies in 40 cities.

SoCalGas has described the results as “demonstrably incorrect” and has stated that it should not be discouraged from raising concerns about any proposal that could increase costs to customers.

As You Sow said, Sempra claims that its lobbying is in line with US climate goals “Wrong and misleading.“Exxon and Sempra do not publicly rate how their climate policies compare to the positions of trading groups they pay to join,” investors said.

“We’re not asking any company to leave a trade association, but we’d like more disclosure to understand where they stand on climate policy,” said Rhonda Brauer, associate program director for climate and environmental justice at the Interfaith Center on Corporate Responsibility.

ICCR members agreed to withdraw five climate lobbying proposals This year, after the companies agreed to look into how their lobbying supports or undermines the goals of the Paris Agreement.

“Companies will say that they do not always agree with every policy of their trade association, and we understand that,” said Brauer. “But we would like to know if and how they are in favor of a Paris-oriented climate policy – both publicly and within these associations.”

Exxon and Sempra are members of the American Petroleum Institute and the US Chamber of Commerce, both of which recently changed their stance on climate action after decades of speaking out against measures to curb greenhouse gas emissions.

API supports the Paris Agreement and Measures to regulate methane leaks and encourage innovationsaid spokeswoman Bethany Aronhalt. The trading group approved a price for carbon for the first time in March. The postponement drew reprimands from Democrats, Republicans and climate officials who said the position is meaningless because it does not support carbon prices in Congress.

French oil giant Total announced API earlier this year, citing a negligent commitment to reducing emissions and tackling climate change.

The chamber supports the Paris Agreement, said spokesman Matt Letourneau. The group Climate policy was changed this year to support market-based solutions such as carbon taxes or cap-and-trade systems.

Colby Bermel contributed to this report.

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