Companies and financial institutions must align their lobbying dollars with their public policy positions on climate change. Strong climate policies are needed not only to mitigate the financial risks to firms, but to financial markets at large. Last year, Ceres produced an analysis on Responsible Policy Engagement on Climate Change that underscores the misalignment between the climate strategies of companies and their public statements and lobbying priorities. It makes clear recommendations on what companies can do to establish systems that address climate risk and integrate that risk into their direct and indirect lobbying practices. In October, Ceres will release a new iteration of this analysis.
The State Financial Officers Foundation (SFOF) and the American Legislative Exchange Council (ALEC) are two of the groups that are behind the ESG backlash. These organizations, among others, are encouraging state legislators to support harmful, anti-marketplace policies that take aim at firms considering sustainable investing and climate risk and other financial risks in decision-making. We are concerned about the companies and financial institutions that have taken climate action while supporting the efforts of these groups.
As Ceres CEO and President Mindy Lubber pointed out in Reuters, the ESG backlash is political and misleading. Climate risk is accepted as a material and financial risk by the mainstream investment and corporate community. Firms that invest in climate solutions and address climate risk as financial risk are doing so to remain sustainable, profitable and competitive over the long-term. We hope the companies supporting these groups move immediately to align their corporate lobbying practices with their climate action.