Although 92% of S&P 100 companies have committed to reducing their own emissions, and 57% agree there is a need for strong, science-based climate policy, only 40% are actively engaging lawmakers on the issue.
21% of assessed companies have lobbied against science-based climate policy, even though the vast majority of those organizations have set their own internal emissions targets.
Nearly three-quarters of assessed companies remain members of the U.S. Chamber of Commerce, with only a handful pushing back against the trade organization's long-time obstruction of climate policy.
Although U.S. companies are increasingly making ambitious pledges to reduce their own greenhouse gas pollution, most of the S&P 100 firms are failing to advocate and lobby for the climate policies that would help them meet their own goals, according to a new report from the sustainability nonprofit Ceres.
The report, Practicing Responsible Policy Engagement: How large U.S. companies lobby on climate change, examined the corporate lobbying activity of S&P 100 companies, and found that the vast majority (76%) acknowledge climate science, nearly all (92%) plan to clean up their own operations by setting emission reduction goals, and most (57%) say there is a need for science-based climate policy. Despite that, only four-in-ten have actively engaged lawmakers to enact these policies.
This is the first ever benchmark analysis of the largest publicly traded U.S. companies against the 2020 Ceres Blueprint for Responsible Policy Engagement on Climate Change, which laid out expectations for how companies should incorporate exposure to climate change risks into their decision-making on climate lobbying.
“The largest U.S. companies know that we need strong, science-based climate policies to prevent the worst effects of the climate crisis, and that inaction will result in vast economic harm. But more companies must step up to call for ambitious climate policy action in order to meet the urgency of the moment,” said Steven Rothstein, managing director of the Ceres Accelerator for Sustainable Capital Markets at Ceres. “Those companies that are not actively lobbying for science-based climate policies are effectively working against themselves, making it extremely challenging for them to achieve the bold targets they have set to clean up their own business operations, risking both their reputations and their financial performance.”
The report surveyed the practices of the companies comprising the S&P 100 in 2019. Due to mergers and other consolidations, it now reflects the activities of 96 organizations.
Among the key findings:
76% of assessed companies have publicly affirmed the science of climate change and 57% supported the need for science-based climate change policies, but only 40% engaged directly with lawmakers—indicating a failure to turn statements of support for climate policy into direct advocacy.
51% of the companies describe policies or legislation to address climate change as a short-term financial risk, even though 74% of the companies say climate change represents a material risk to their assets—a sign that large companies are still overly focused on the near-term impacts of policy and not on the systemic impact of climate change.
20 of the assessed companies have lobbied against science-based climate policies in the last five years—even though 17 of those companies have set emission reduction targets that science-based policies will make much more achievable.
Released shortly after a stunning string of successful shareholder resolutions intended to push companies to align their lobbying practices with climate science, the report is a valuable resource for investors seeking better insight into companies’ government relations strategies.
“Corporations have a significant impact on climate policy, directly and through their trade associations. This year’s string of majority shareholder votes is strong recognition by investors that these efforts must be fully aligned with the ‘well below 2 degrees’ goal of the Paris Agreement,” said Adam Kanzer, Head of Stewardship for the Americas at BNP Paribas Asset Management. “This report provides a clear roadmap for investors who are calling for businesses to adopt science-based lobbying.”
“The Ceres report puts hard numbers on what has been a real concern for employees, investors, and other corporate stakeholders: too often, companies fail to match their lobbying goals with their own operational ambitions,” said Bill Weihl, executive director of ClimateVoice and former corporate sustainability official. “It is past time for corporations that champion a clean-energy vision to incorporate the work into their government relations departments to press for the bold, equitable climate policies that our future demands.”
The analysis also found that 13% of the companies have lobbied both for and against science-based climate policies, demonstrating the complex and inconsistent positions of certain businesses and industries. Moreover, nearly three quarters of the companies assessed (73%) are members of the U.S. Chamber of Commerce, which has long resisted the policies the nation needs to make its economy more sustainable. Only a handful (7%) have disclosed that they have pushed the Chamber to change its position. And just one of the assessed companies has left the Chamber over its climate positions: Apple, in 2009.
In a letter to the Chamber president, Apple at the time wrote that the company “supports regulating greenhouse gas emissions, and it is frustrating to find the Chamber at odds with us in this effort.”
“Good corporate citizenship requires companies to work not just on their own, but within trade organizations to enact climate-smart policy at scale,” said Hugh Welsh, president of DSM North America, a member of the U.S. Chamber that pushes the association to improve their climate policy positions. “DSM believes in the many benefits of a clean-energy economy for businesses, consumers, and communities across the U.S., and will continue urging the U.S. Chamber to embrace this vision.”
The Ceres report includes a database rating the companies’ performance in different areas of climate policy engagement, including lobbying efforts, corporate governance, and trade association activity. It also cites several individual examples of strong corporate climate advocacy, including efforts from Adobe, Biogen, Exelon, Microsoft, PayPal, and PepsiCo, among others, in support of various state and federal clean electricity and transportation policies.
And it comes as dozens of businesses get ready to meet with federal lawmakers this week as part of the American Is All In Hill Day on Climate Action to express their support for an infrastructure bill with strong climate and environmental justice measures.
“The current debate in Congress over climate change and infrastructure presents a vital opportunity for companies committed to a clean energy future,” said Anne Kelly, vice president of government relations at Ceres. “Lawmakers need to hear the urgent call for climate policies that match the ambition of corporate emission reduction goals and renewable energy targets. Sitting on the sidelines is not an option. Thanks to the many companies that are speaking out this week with America is All In.”
Earlier this year, Ceres and its partner We Mean Business organized the largest ever call to action from the business community urging the U.S. to adopt an emissions reduction target that will place the country on a credible pathway to reach net-zero emissions by 2050.
About Ceres
Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future. For more information, visit ceres.org and follow @CeresNews.