Engage
Engage trade associations to support science-based climate policies
Large trade associations play extraordinarily influential roles on public policy at all levels, including climate policy. Companies that are members of a given trade association are uniquely positioned to influence their climate positions and advocacy practices so that they correspond with the companies’ own best interests and reflect the risks that companies face from the climate crisis. Such influence is especially important at major trade groups, such as the U.S. Chamber of Commerce, which have played a pivotal and obstructionist role in recent decades on climate science and climate policies.
The Ceres Blueprint for Responsible Policy Engagement on Climate Change calls on companies to assess the extent to which their various trade groups engage on climate policy and whether that engagement aligns with climate science. Based on the results of such an assessment, companies should publicly engage with their trade groups to ensure their positions are aligned.
Why focus on the Chamber of Commerce?
The U.S. Chamber of Commerce is one of the largest and most influential trade associations in the world. It also has a long track record of playing a historically obstructionist role on science-based climate policies. Wide-ranging research by the InfluenceMap, Chamber of Commerce Watch, and other groups reveals how the Chamber has consistently worked to undermine ambitious U.S. climate policies over the past two decades.
Among the examples of the Chambers oppositional tactics:
- Debunked research criticizing the Paris climate accord
- Litigation to repeal the U.S. Clean Power Plan
- Opposition to GHG regulatory efforts through existing statutes
- Support for the Trump administration’s rollback of federal vehicle emissions standards
Numerous state chamber groups reflect a similar history. For instance, the California Chamber of Commerce has opposed cap-and-trade efforts and efforts to phase out gasoline-powered vehicles by 2035. In January 2021, the Minnesota Chamber of Commerce sent a letter to the House of Representatives opposing the state’s Energy Conservation and Optimization (ECO) Act. The act was proposed as part of the state’s plan to achieve 100% clean energy by 2040.
Over the past three years, amid growing pressure from its own corporate members, the Chamber has taken steps to evolve its policy position on climate change. For example, it formed a climate task force in 2019 to inform its approach on climate legislations, helped passed legislation in 2020 to reduce hydrofluorocarbon (HFC) pollution, a potent greenhouse gas used in refrigeration, and offered broad support in 2021 for a “market-based approach” to accelerate GHG reductions.
Yet, such steps forward have been followed by inconsistent actions that are more in line with the Chamber’s traditional positioning. For instance, citing research from the Change the Change Coalition, the Chamber in 2021 opposed the White House’s halt of the Keystone XL Pipeline. The Chamber also recently partnered with API (American Petroleum Institute) to oppose the federal government’s moratorium on new oil and gas leases on public lands.
Vigilance and engagement by U.S. corporations that are Chamber members are essential to ensure that the Chamber’s actions begin to more closely align with their new stated intentions. Given the Chamber’s enormous influence, the likelihood of passing ambitious climate change policy at the federal level will greatly increase with its full-fledged support. Members of the Chamber, particularly large U.S. companies, have a critical role to play in ensuring that the Chamber is acting in their best interests.
ENGAGE By the numbers
84% (81 of the 96 assessed companies) have disclosed their trade association memberships
While U.S. companies are not legally required to disclose this information, investors are intensely interested in corporate trade association memberships. Because trade associations themselves often do not disclose the names of their members, it is important for companies to provide comprehensive information to allow investors and other stakeholders to have a clear sense of the groups that companies are involved with, given the outsized influence that trade associations have on policies, including climate change policies.
A deeper examination of the data reveals some variations in the thresholds that companies use to disclose trade association memberships:
17% (16/96) do not provide clarity on the criteria that they use in disclosing trade association memberships
13% (13/96) disclose comprehensive trade association membership lists
21% (20/96) disclose memberships in organizations to whom they pay $25,000 or above on annual dues
33% (31/96) disclose trade associations memberships at a dues threshold of $50,000 or above
16% do not disclose any list of their trade association memberships
Only 4% (4 of the 96 assessed companies) provided an explicit assessment of their trade associations’ positions on climate change
The 4% number, while disappointing, is not surprising. Investors have amplified the need for “trade association audits” largely over the past few years. While some large U.S. companies provided broad statements that they review the positions of their trade associations on climate change, a very limited number, including Ford, Chevron, ConocoPhillips, and Duke Energy have publicly disclosed assessments of their trade associations’ climate lobbying. However, analysis by independent think tank, InfluenceMap, finds that these assessments do not fully meet investor expectations. Going forward, investors should not only engage companies on the need for conducting climate lobbying audits, but should also pay close attention to the results of the analysis and whether they present a complete and accurate picture of the associations in question.
LEADING PRACTICE
Royal Dutch Shell published industry association reviews in 2019 and 2021. Following the 2019 review, Shell published a report in 2020 detailing the actions it had taken to address differences in climate-related policy positions with the nine industry associations where misalignments had been found. In Shell’s 2021 review, the company discloses its climate-related policy positions and advocacy, including its recognition of the IPCC findings and support for the goals of the Paris Agreement, its methodology for assessing alignment with industry associations, the results of the review of 36 of its trade associations, and the steps it plans to take to address the misalignments it found.
LEADING PRACTICE
TotalEnergies reviews the climate stances of its most significant industry associations against six key criteria, including support for the Paris Agreement, carbon pricing, and the development of renewable energies. Following its 2019 analysis, Total withdrew its membership from the American Fuel & Petrochemical Manufacturers (AFPM) due to a “diverging commitment to the climate” and the company withdrew from the American Petroleum Institute in January 2021 over a number of API’s positions, including the trade group’s support for the rollback of U.S. regulation on methane emissions at the time, and its opposition to electric vehicle subsidies.
73% (70 of the 96 assessed companies) have affirmed that they are members of the Chamber of Commerce, underscoring the breadth of the Chamber’s representation.
73% of assessed companies have affirmed that they are members of the Chamber of Commerce
19% of the assessed companies' memberships are unclear (they did not provide sufficient information to determine whether they were members of the Chamber or not)
8% are confirmed to not be members
Given investor and other stakeholder interest in the Chamber, companies should clarify whether or not they are members. Additionally, companies should encourage the Chamber to disclose the names of its members to provide important transparency to stakeholders.
The vast majority of the assessed companies are not holding the U.S. Chamber of Commerce accountable for its climate change track record or disclosing how they are engaging with the Chamber.
The data demonstrates a serious liability on the part of large U.S. companies. It is critical for Chamber members, particularly large companies, to use their voice and power within the Chamber to ensure that the association lobbies in support of science-based climate change policies. Disclosure and engagement provide important accountability checks in this regard.
73% of assessed companies have affirmed that they are members of the U.S. Chamber of Commerce
9% have acknowledged the Chamber’s historic track record on climate change and the importance of science-based climate policies
7% have disclosed that they have engaged with the Chamber to evolve its climate change position to align with climate science
1% company has left the Chamber over its climate stance
Further, 36% (25 of the 70 companies that are members of the U.S. Chamber of Commerce) have directly engaged lawmakers on science-based policies, yet have not publicly distinguished themselves from the Chamber’s position on climate nor engaged to ensure that the Chamber reflects its science-based position. By not calling on their trade association to represent and reinforce their own science-based positions and advocacy on climate change, these companies are in effect working against themselves.
ENGAGE Companies in Action
Companies that have distinguished themselves from the Chamber and engaged the association are doing so in a variety of ways.
COMPANY IN ACTION
Citi’s disclosures include a strong assessment of the Chamber’s climate change lobbying record, noting that the association has: “historically either opposed a robust U.S. federal policy framework addressing climate change or has not taken opportunities to advocate for such a framework.” Citi also acknowledges the Chamber’s updated climate change statements, but notes that “their policy and litigation positions continue to be contrary in many respects to the ambitious climate action steps necessary to achieve the goals of the Paris Agreement."
POWER IN NUMBERS
In 2017, a handful of Chamber members, including DSM North America, Bank of America, Citi, UPS, and Pfizer, spearheaded the creation of the Climate Solutions Working Group with the goal of evolving the U.S. Chamber of Commerce’s position and lobbying on climate change. The group’s efforts contributed to the Chamber’s updated climate change position statement and the establishment of a task force on climate action to engage its broader membership on climate change.
COMPANY IN ACTION
In Oct 2020, The Coca-Cola Company sent a letter encouraging the Chamber to embrace the Business Roundtable’s Climate Change Principles and Policies (Coca-Cola is a member of both organizations.)
COMPANY IN ACTION
In 2009, Apple left the U.S. Chamber of Commerce, explicitly citing the association’s negative stance on climate change policy as its reason for resigning its membership.
Good corporate citizenship requires companies to work not just on their own, but within trade organizations to enact climate-smart policy at scale.
—HUGH WELSH, PRESIDENT, DSM North America
ENGAGE Indicator guidance
Indicators assess whether:
Provides insight into whether a company has publicly disclosed its trade association memberships, given investor interest in this issue.
Company receives credit if it has disclosed membership in large trade associations.
Provides insight into whether a company is systematically considering whether its trade associations are acting in a manner that is consistent with climate science and the company’s own climate risk exposure.
Company receives credit if it has done the following:
- Discloses the corporate climate policy positions and influencing activities:
- Identifies memberships in all large trade associations and specifies those that lobby on climate change;
- Evaluates each relevant trade associations’ positions and lobbying track record on climate change;
- Assesses the degree of alignment between the the trade associations’ lobbying efforts and the latest climate science and discloses its method
- Identifies the process for addressing any misalignments that are discovered; and
- Publicly discloses all of the above
Provides insight into whether the company is a member of a trade association that has engaged on climate change policy advocacy.
The assessment will note when there is any evidence that the company is a member of the U.S. Chamber of Membership, including through corporate disclosures or via U.S. Chamber of Commerce membership documents.
Note: Ceres does not intend to dictate what trade associations companies should or should not be a part of; therefore this is a neutral indicator.
Given the Chamber does not publicly share it’s membership list, where a company has not publicly clarified the status of its membership in the Chamber, Ceres solicited this information directly from companies. Where this remains unclear, Ceres has marked this as “No/ Unclear” in our assessment.
Provides insight into whether the company indicates awareness of the Chamber’s oppositional climate change track record on climate policies and is distinguishing themselves from those positions.
A company who is a member of the U.S. Chamber of Commerce receives credit if, in the past 5 years, it has disclosed its understanding that the Chamber has not lobbied in a way that is aligned with climate science by:
- Explaining where/ when the Chamber’s lobbying on specific policy proposals is inconsistent with climate science; and/or
- Publicly distancing themselves from the Chamber’s history of oppositional lobbying on specific science-based policies.
Provides insight into whether the company has engaged with the Chamber on its climate change positions and lobbying to bring them in alignment with climate science.
A company who is a member of the U.S. Chamber of Commerce receives credit if, in the past 5 years, it has publicly disclosed its engagements with the Chamber to align the association’s position and lobbying with science-based climate policy.
Examples of engagements include:
- Sending a letter to the Chamber urging the association to evolve its climate policy positioning;
- Communicating the company’s science-based position to the Chamber when it is lobbying in a way that is not aligned with science-based climate policy;
- Joining the Chamber’s Climate Solutions Working Group to work with like-minded companies engaging the Chamber on its climate policy positions
- Leaving the Chamber on account of its climate change positions
Meets Expectations
Does not meet expectations
Yes
Unclear
No
Not Applicable
| Company | Ticker | Sector Sort ascending | The company has disclosed a list of its trade association memberships | The company has conducted an audit of its trade associations for science-based climate policy alignment | The company is a member of the U.S. Chamber of Commerce | If a member, the company has disclosed its understanding that the Chamber has a record in misalignment with climate science | If a member of the Chamber, the company has disclosed its engagements to evolve the Chamber’s climate change positions, lobby |
|---|---|---|---|---|---|---|---|
| Verizon Communications | VZ | Telecommunications | |||||
| AT&T | T | Telecommunications | |||||
| Comcast | CMCSA | Telecommunications | |||||
| Netflix | NFLX | Consumer Discretionary | |||||
| Starbucks | SBUX | Consumer Discretionary | |||||
| Amazon.com | AMZN | Consumer Discretionary | |||||
| McDonald's | MCD | Consumer Discretionary | |||||
| Walt Disney | DIS | Consumer Discretionary | |||||
| Altria Group | MO | Consumer Staples | |||||
| Philip Morris International | PM | Consumer Staples |
