The US Chamber of Commerce released its policy position on combatting climate change in 2019, stating that “inaction is not an option.” However, those words were overshadowed by the organization’s vigorous, years-long lobbying campaign to support pro–fossil fuel policies. Companies have also shown the same environmental disconnect between speech and action—also known as “climate lobbying.”
What Is Climate Lobbying?
As pressure mounts on companies to address climate change, more businesses have adopted positions that diverge between their public statements and private actions. This can include efforts to privately urge regulators to delay or even block environmental policies in spite of public advocacy for the opposite. In this way, climate lobbying is a form of greenwashing through which corporations hope to hide climate-unfriendly activities behind pro-environment sentiments.
Climate Lobbying in Action
Climate lobbying happens in plain sight, often by other groups on behalf of a parent company. For instance, the American Petroleum Institute represents oil and gas companies such as Exxon Mobil and Chevron. Although both companies have publicly supported climate action, the American Petroleum Institute has lobbied to curb regulations meant to lower greenhouse gas emissions. Trade associations are not obligated to disclose their membership or funding sources, effectively shielding information about corporate involvement with climate lobbying businesses.
Additionally, about 300 corporations and private foundations are members of the American Legislative Exchange Council (ALEC). Bolstered by corporate sponsorships from companies including Raytheon Technologies and Coca-Cola Bottling Co. Consolidated, ALEC crafts model state bills. This includes policies that challenge environmental legislation and regulatory attempts to shift to renewable sources of energy. By the group’s own reckoning, ALEC has about a 20% success rate in enacting bills into law.
An Engaged Investor Response
The prevalence of climate lobbying has moved concerned investors to consider the risks it poses to the economy, portfolios, and overall efforts to transition to renewable energy. Steps to curb this behavior often involve shareholder resolutions: Chevron issued its first climate lobbying report in January after shareholders voted 53% in favor of a climate lobbying resolution. Thirteen shareholder resolutions aimed at climate lobbying have been filed at energy and transportation companies and airlines in 2021 compared with four the year prior.
The Interfaith Center on Corporate Responsibility filed resolutions with seven companies for this proxy season, asking each corporation to evaluate its lobbying activities and plans to address risks posed by misalignment with the Paris Agreement. Thus far, the influential investor group has reached an agreement with five of the corporations.
In addition, investor and business advocacy group Ceres released its first benchmark in March evaluating the carbon-reducing actions of the world’s largest greenhouse gas emitters and other companies. In 2020, institutional investors contacted 47 of the biggest US-based corporate CO2 emitters to disclose how their lobbying is linked to the Paris Agreement and science-based climate policies.
Investor efforts to stop climate lobbying can promote transparency in companies’ priorities—and could ultimately contribute to eliminating the practice.