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Corporate hostility: Half of the world’s big companies block climate action

Up to 50% of the world’s largest companies are lobbying for little or no action on GHG emissions, says new report

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Traders stare at screens in Sao Paulo's stock exchange. Brazil is one of the countries where corporate lobbying has been most effective in slowing action to cut greenhouse gas emissions (Image by Rafael Matsunaga)

As nations prepare to negotiate a climate treaty in Paris in December, the role of corporations in the fight against climate change is coming under increased scrutiny.

While much has been made of calls by the private sector for more ambitious carbon cuts at a national level, a view echoed in the past few days at New York Climate Week, evidence is growing that some companies are hindering efforts to cut greenhouse gas pollution.

The influence of business on government has been a theme in political history for centuries. Money, and the control it wields, plays a major role in US elections. In response, lawmakers there have tried to implement of a system of disclosure and transparency around financial contributions to political causes, but with very patchy results. In the European Union the system of transparency is weaker. There is a voluntary ‘Transparency Register’ where lobbyists are asked to declare themselves, but a recent report estimated that more than half of all entries are inaccurate.

The particular focus on the influence of companies on climate change policy, though, is more recent.

A report this month from the London-based NGO InfluenceMap alleged that almost half of the world’s 100 largest companies, including Procter & Gamble, BMW and Boeing, are “obstructing climate change legislation.” The research evaluated companies’ public statements on the science of climate change and influence on legislation designed to mitigate carbon emissions.
 
InfluenceMap looked at companies’ direct influence on legislation, as well as the influence of trade groups they are members of. These trade associations represent particular industrial sectors or businesses with a particular country or region. Among groups judged to be the most insidious were the European Chemical Industry Council, the US Chamber of CommerceBusiness Council of Australia, and the all-powerful Japan Business Federation, which counts almost every major Japanese firm as a member. InfluenceMap says that these groups “have all strongly opposed most climate legislation for years”.
 
The findings chime with research that I carried out with colleagues at the University of Westminster earlier this year, which focused just on the EU. Our report Lobbying by Trade Associations on EU Climate Policy found that many major multinational companies with strong sustainability policies are at the same time members of trade associations that are lobbying against EU climate policy. These EU policies include attempts to strengthen the EU Emissions Trading Scheme through ‘backloading’, and targets on energy efficiency and renewable power.
 
Corporate hijacking of efforts to cut GHG emissions came into sharp focus at the previous milestone conference on climate change — the Copenhagen climate summit (COP15) in 2009. That summit was widely perceived to be a failure, and some blamed the obstructive lobbying of fossil fuel companies and energy-intensive industries.
 
In 2011, the head of the UN’s climate arm, Christiana Figueres, addressed the problem, drawing attention to economically and politically powerful resources companies that were pushing governments to maintain the fossil-fuel-dominated status quo.
 
The reasons to care about the influence of business on climate policy are obvious. Auden Schendler, vice president of sustainability at Aspen Skiing Company, and Mike Toffel, associate professor in the Technology and Operations Management unit of Harvard Business School, have voiced the opinion that “compared with companies’ efforts to green their operations, corporate political actions such as lobbying or campaign funding can have more influence on environmental protection, and arguably represent the greatest impact a company can have on protecting — or harming — the environment.”
 
Scrutiny of the influence of corporations and their trade groups has steadily increased in the last few years. The Union of Concerned Scientists has compiled a report assessing whether prominent American corporations accepted the science of climate change, and examining how they lobbied on climate policy.
 
“More and more, we’re seeing companies rely on their trade groups to do their dirty work of lobbying against comprehensive climate policies,” says to Gretchen Goldman of the Union of Concerned Scientists. “Companies get the delay in policy they want, while preventing nations from acting to fight climate change. It is unacceptable that companies can obstruct climate action in this way without any accountability.”
 
The pressure on the private sector has continued to mount. In 2014, three UN agencies and a group of NGOs released a Guide for Responsible Corporate Engagement in Climate Policy, and the last few weeks, US companies have faced scrutiny about their membership of the US Chamber of Commerce due to its opposition to President Obama’s Clean Power Plan. At the same time, in Europe there have been letters from investors and questions at shareholder meetings for FTSE 100 companies who are members of trade groups like the European Chemical Industry Council and BusinessEurope, who argue that EU action on climate change undermines industrial competitiveness.
 
Scrutiny to continue 
 
The coming climate change summit at COP21 in Paris may have particularly motivated policymakers and civil society organisations to scrutinise the activities of companies, but interest in the lobbying activities of multinational companies and their trade groups is unlikely to go away any time soon. InfluenceMap will now be continuously monitoring the activities of companies and their trade associations, and has plans to expand to include Chinese e-commerce company Alibaba in their next round of analysis.
 
This scrutiny puts the onus back onto companies (and investors) to ensure that their staff and the lobbyists that represent them are lobbying on climate policy in a way that is clearly aligned with the long-term interests of those companies, the economy and the climate.

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