Advocate in favor of science-based climate policies
Once a company assesses its climate risks and uses that assessment to appropriately inform internal decision-making, the next step is to use its influence to publicly support science-based climate policies. Science-based climate policies will help drive the creation of a policy and regulatory environment that best positions the company for resilient growth. They are critical to helping companies successfully meet their science-based climate change targets or net zero goals. Public corporate support will be crucial to passing the legislation needed for the U.S. to meet its new and ambitious climate change target of cutting greenhouse gas emissions by 50 - 52% by 2030 and mitigate the most devastating impacts of climate change. When large companies publicly engage in science-based climate advocacy, it creates a “safe place” for other businesses to do the same.
The Ceres Blueprint Blueprint for Responsible Policy Engagement on Climate Change calls on companies to first publicly affirm climate science and the goals of the Paris Agreement. This affirmation is important given the unfortunate continued politicization of climate change as a “special interest” issue. Building on this, the Blueprint calls on companies to publicly and consistently advocate for relevant science-based policies across all of their engagement platforms.
Many around the world are already feeling the severe impacts from climate change, including record-shattering floods, wildfires, droughts, heatwaves, and hurricane seasons. And the latest climate science from the International Panel on Climate Change shows that we must limit global average temperature increase to 1.5° C above pre-industrial levels if we are to avoid the most extreme consequences of a changing climate. To achieve this goal, we must cut global emissions by nearly half by 2030 and reach net zero emissions by 2050, which requires immediate and rapid emissions reductions in every sector of the economy.
Science-based climate policies are those that are in line with decarbonization pathways to limit global temperature rise to 1.5°C.In June 2021, the AAA Framework, endorsed by leading NGOs including Ceres, released the top climate policy priorities for corporate advocacy in 2021, which include:
- Decarbonize electricity
- Decarbonize transportation
- Limit methane emissions
- Advance nature-based climate solutions
- Enact an economy-wide carbon price
- Mandate climate risk disclosure
Our collective understanding of the actions demanded by climate science is constantly evolving. Companies need to keep this in mind when considering policies to support. In May 2021, a new report from the International Energy Agency emphasized that to achieve net zero emissions by 2050, investment in new coal mines and oil and gas developments must stop immediately and, by 2035, there must be no sales of new internal combustion engine passenger cars.
ADVOCATE By the numbers
76% (73 of the 96 companies assessed) have publicly affirmed the science of climate change.
Such affirmation from large corporations, which are among the most trusted institutions in the country, is critical to countering the continued perpetuation of climate science denialism, as well as affirm the need for urgent action.
For instance, Biogen notes: “To prevent the worst impacts of climate change, we need to keep the global temperature rise below 1.5°C. Without immediate, significant and sustained action to reduce anthropogenic greenhouse gas (GHG) emissions, the global temperature rise will exceed the 1.5° target, which is likely to have severe consequences for human health and broader ecological well-being.”
In a similar vein, 57% (55 of the 96 companies assessed) have broadly supported the need for science-based climate change policies, once again reflecting the broader trend of companies evolving their public disclosures on climate change and related policies.
52% (50 of the 96 companies assessed) publicly support the Paris Climate Agreement.
We believe that this is a significant indicator as the period of our assessment (2016-2021) covered the years in which former President Trump announced his intention to withdraw the U.S. from the Paris Climate Agreement. Corporate voices supporting the Agreement were crucial during that period. For example, in May 2017 companies including The Walt Disney Company, JPMorgan Chase, and Morgan Stanley wrote to former President Trump to express their strong support for the U.S. remaining in the Paris Climate Agreement, outlining the benefits of a coordinated approach to reducing global GHG emissions.
Continued corporate support for the Paris Agreement, including from large U.S. companies, remains important, especially in light of current efforts to ramp up the ambition of the Agreement given the continued exacerbation of climate change impacts. In the lead up to the Biden administration’s Leaders Summit on Climate, over 400 businesses and investors, including Starbucks, Target, and Johnson & Johnson, called on the administration to adopt a highly ambitious 2030 emissions reduction target, or Nationally Determined Contribution (NDC) under the Paris Agreement, in pursuit of reaching net-zero emissions by 2050.
Our data reveals that only 40% (38 of the 96 companies assessed) are engaging lawmakers on the importance of science-based climate policies.
76% of assessed companies have publicly affirmed the science of climate change
40% have engaged directly with lawmakers on the importance of specific science-based policies to mitigate the impacts of a changing climate
Such advocacy leveraging the company’s influential brand is critical to persuade lawmakers to advance the needed policies and demonstrate that their broader statements on climate change are genuine. As noted elsewhere, ambitious climate policy engagement is also an important risk management tool for the companies in question.
Those companies that are engaging are doing so in a range of ways.
60% do not directly engage with policymakers to advocate specific science-based policies
Of the 40% that do:
8% of companies have advocated for science-based climate policies solely through individual efforts
14% have advocated solely as a part of corporate cohorts
18% have engaged both individually and as a group
Companies should publicly advocate for science-based climate policies using all tools at their disposal, including writing (or co-signing) statements directed at policymakers on policy options, meeting with policymakers and disclosing the details, and providing testimony on policy options at the federal and state level. While private meetings with legislators can be effective, there is no public record of what was said, making it difficult to understand the nuances of the corporate position and the response from the legislator.
Having direct, open, and transparent conversations with lawmakers (either through hearings, meetings virtually or in person) at the federal and state levels is a vital way for companies to signal their support for specific science-based climate change policy proposals. Since 2009, Ceres has organized countless opportunities for corporations to meet with lawmakers on both sides of the aisle to champion their support for science-based policy measures. Hundreds of businesses have collectively participated in such efforts in the last few years.
Given the absence of proposals at the federal level in the past four years, examples of corporate action are largely focused on state and regional policies. For instance, in February 2020, Nike testified at the Oregon Senate Committee on Environment and Natural Resources in support of Oregon's greenhouse gas emissions cap-and-trade bill.
Large companies have also supported policies by sending letters to lawmakers and of group advocacy. For example, American Express wrote to the Arizona Corporate Commission in 2019 to express its support of increasing Arizona’s renewable energy standards. In 2020, Etsy sent a letter to the California Air Resources Board in support of the proposed Advanced Clean Truck (ACT) regulations, which were adopted by the state, setting the world’s first zero-emission commercial truck requirements. In July 2020, companies, including Adobe, McDonald’s, and PepsiCo, sent a letter to congressional leaders, urging them to combat climate change as part of the COVID-19 stimulus package, and to “double down on clean energy infrastructure to put Americans back to work and come back stronger and cleaner.” AT&T, Exelon and other members of the Corporate Electric Vehicle Alliance, wrote to the EPA and the National Highway Traffic Safety Administration applauding the administration’s decision to revisit the rollback of the fuel economy and greenhouse gas (GHG) standards and urging them to adopt stronger replacement standards that are aligned with climate science and consistent with 100% zero emission vehicle (ZEV) sales in 2035. Adobe, Nike, and PayPal have called for expanding cap-and-invest programs along the Pacific Coast.
Companies have also contributed to litigation supporting science-based policies. In 2016, Google, Amazon, Apple, and Microsoft filed a joint amicus brief in support of the Clean Power Plan.
The AAA Framework for Climate Policy Leadership encourages companies to engage in science-based climate policy by:
- Talking to policymakers about why climate change is a business risk for the company, how they are reducing their own emissions, and which climate policies they support.
- Bringing up climate policy whenever they meet with elected officials, agencies and regulators–not just when environmental groups invite them.
- Testifying at hearings and filing written comments.
- Talking publicly about why climate policy is a bottom-line issue for their company.
- Addressing climate change and climate policy in every public forum they can and create new forums to talk about it.
- Mobilizing their networks–employees, suppliers, peers and customers–to advance climate policy, as they would for any other top advocacy priority.
21% (20 of the 96 companies assessed) have lobbied in opposition to science-based climate policies in the past five years. Yet, nearly all of them (17) have set or committed to set emissions reduction targets.
The climate lobbying practices of these 20 companies presents deeply contradictory behavior that directly contributes to the slow pace of progress on climate action both on Capitol Hill and in states across the country. Such practices also place the individual companies at risk of significant reputational damage, decreased investor confidence, and higher compliance costs down the road if action to address climate change is delayed now.
Investors are paying attention and are increasingly leaning on companies that exhibit such profound misalignment with a 1.5 degree future. This has come into sharp focus in the 2021 proxy season, particularly in the case of ExxonMobil. In addition to a 63.8% vote on a proposal asking the company to report on how its climate lobbying aligns with the goals of the Paris Agreement, ExxonMobil’s shareholders voted to replace three of the oil major’s board of directors with an alternative slate of candidates experienced in clean energy and energy transitions.
Corporations have a significant impact on climate policy, directly and through their trade associations. This string of majority votes is strong recognition by investors that these efforts must be fully aligned with the “well below 2 degrees” goal of the Paris Agreement.
—ADAM KANZER, HEAD OF STEWARDSHIP FOR THE AMERICAS, BNP PARIBAS ASSET MANAGEMENT
Over half (12) of the companies that lobbied in opposition to science-based climate policies in the past five years also lobbied for science-based climate policies.
The mixed climate lobbying records of these companies presents a complex narrative. A sector specific lens is important in this regard, particularly in evaluating any progress going forward.
Breakdown of corporate advocacy on climate change
For example, while some oil and gas companies receive credit under our assessment for coming out in support of a price on carbon, the intensity of their oppositional engagements on climate policies still far outweighs any apparent support for certain climate policies. For instance, many have also advocated for the repeal or weakening of low-carbon and renewable fuel standards, lobbied policymakers to expand oil and gas exploration and production on U.S. federal lands, including Alaska, and, up until 2021, lobbied for the rollback of methane regulations—lobbying that runs counter to a science-based policy agenda. As a result, the validity of their alleged support for carbon pricing has come under scrutiny. In fact, just recently a senior lobbyist from ExxonMobil was quoted saying that the company’s support of a carbon pricing policy is a "good talking point," though he does not believe the policy has any real chance to actually become law.
On the other hand, Ford Motor Company presents an interesting case study in the context of a company that has lobbied both against and for science-based climate policies in the past five years. After Trump was elected, the company’s then-CEO called for the weakening of the Obama-era Corporate Average Fuel Economy (CAFE) standards. However, the company subsequently rejected the weak Trump standards. In July 2019, Ford moved away from the positioning of its trade association and other automakers, and reached an agreement with the state of California to comply with greenhouse gas standards for light-duty vehicles that were more stringent than the Trump administration's final rule.
We committed to the California framework because it was the right thing to do – for people, for the planet and for our business. Our leadership on environmental issues is critical to address the urgency of climate change, and to ensure we’re fulfilling our purpose to build a better world, both now and for the future.
—BOB HOLYCROSS, VICE PRESIDENT OF SUSTAINABILITY ENVIRONMENT, AND SAFETY ENGINEERING, FORD
ADVOCATE Indicator guidance
Indicators assess whether:
Provides insight into whether the company recognizes the science of climate change in order to counterbalance the outdated narrative of climate science denialism in the U.S.
Company receives credit if it has provided disclosure on the science of climate change in public disclosures over the past 5 years by:
- acknowledging that greenhouse gases leads to global warming and exacerbating extreme weather phenomena; AND/OR
- affirming the findings of the IPCC.
Provides insight into whether the company has signaled its broad support for the need and value of climate change legislation and regulation that is aligned with climate science.
Company receives credit if, in the past 5 years, it has made public statements and/or endorsed public statements recognizing the need for ambitious climate policies in the U.S.
Provides insight into whether the company recognizes the need for science to inform policy making and the importance of U.S. participation in a coordinated global approach.
Company receives credit if, in the past 5 years, it has disclosed that it supports the Paris Agreement.
Provides insight into whether the company is engaging with policymakers to advocate for the promulgation of specific rules or passage of legislation in alignment with climate science as a part of a corporate cohort, demonstrating broad corporate support for the importance of science-based climate policies.
Company receives credit if, in the past 5 years, it has:
- engaged policymakers or regulators at federal or state level in the U.S.; AND
- supported specific science based policy measures (We are not necessarily looking for companies to advocate for a policy measure that is on the docket - however we are looking for some specificity in what is being called for); AND
- publicly disclosed such engagement AND
- done so as a part of a group of companies.
Examples of engagement include joint statements directed at policymakers; joint meetings with policy makers that are disclosed; joint letters to policymakers.
Examples of specific science-based policy include: support for carbon pricing, energy efficiency standards, renewable energy legislation and GHG emission standards.
Provides insight into whether the company is engaging with policymakers to advocate for the issuance of specific rules and legislation in alignment with climate science.
Company receives credit if, in the past 5 years, it has:
- engaged policymakers or regulators at federal or state level in the U.S.; AND
- supported specific science-based policy measures (We are not necessarily looking for companies to advocate for a legislative measure that is on the docket - however we are looking for some specificity in what is being advocated for.); AND
- publicly disclosed such engagement; AND
- done so by itself and under its own brand.
Examples of engagement include: statements directed at policymakers; meetings with policy makers that are disclosed; letters to policymakers and testimony to policymakers.
Examples of science based policy measures include support for carbon pricing, energy efficiency.
Provides insight into whether the company has engaged in a constructive manner on climate policies across the enterprise’s positions and over time.
Company receives credit if there is no evidence that it has lobbied in opposition to science-based climate policies in the past 5 years.
A no indicates that the company has, in the past 5 years:
- opposed science-based climate policies; OR
- attempted to promote policies and standards that are evidently weaker than what is needed to meet climate goals; OR
- Made statements that oppose IPCC guidance on potential pathways and systematic transition options to transform the global energy system in line with a goal of limiting warming to 1.5 degrees
Meets Expectations
Does not meet expectations
Yes
Unclear
No
Not Applicable
| Company | Ticker | Sector Sort ascending | The company has publicly affirmed the science of climate change | The company has made statements supporting the need for ambitious climate policies | The company has publicly supported the Paris Climate Agreement | The company has publicly joined a group of companies to advocate for specific science-based climate policies | The company has publicly and individually advocated for specific science-based climate policies | The company has not engaged in opposition to science-based climate policies |
|---|---|---|---|---|---|---|---|---|
| Colgate-Palmolive | CL | Consumer Staples | ||||||
| Procter & Gamble | PG | Consumer Staples | ||||||
| Allstate | ALL | Insurance | ||||||
| American International Group | AIG | Insurance | ||||||
| Metlife | MET | Insurance | ||||||
| Berkshire Hathaway | BRK | Insurance | ||||||
| Accenture | ACN | Technology | ||||||
| IBM | IBM | Technology | ||||||
| Adobe | ADBE | Technology | ||||||
| Booking Holdings | BKNG | Technology |
