A group of leading institutional investors has sent letters to the Chief Executive Officers and Chairs of Boards of Directors of the largest U.S.-based corporate greenhouse gas emitters, calling on the companies to disclose how their climate lobbying aligns with the most ambitious goals of the Paris Agreement and science-based climate policies.
The institutional investors are all signatories of Climate Action 100+, a group of more than 500 investors representing over $47 trillion in assets, that targets the world’s largest corporate greenhouse gas emitters to promote taking necessary action on climate change. The investors are also members of the Ceres Investor Network, which includes over 175 institutional investors, managing more than $29 trillion in assets, advancing leading investment practices, corporate engagement strategies, and key policy and regulatory solutions.
The 47 corporate emitters targeted by the new campaign are focus companies of Climate Action 100+, and span a range of sectors including oil and gas, electric power, transportation, and food and beverage. In the letters, the investors urged companies to ensure all lobbying activities — both direct lobbying by the companies and indirect lobbying through their trade associations — are Paris-aligned and to take action when there is misalignment. Additionally, the investors call on the companies to establish strong governance of their climate lobbying activities and provide full public transparency of those activities, advising them of best practices for corporate climate lobbying provided in resources, including the Ceres Blueprint for Responsible Policy Engagement on Climate Change.
The letters are being sent in advance of a public benchmark of these companies on their climate actions, set to be released early next year. Earlier this year, all 161 focus companies of the Climate Action 100+, including the 47 notified this month, were informed that they would be benchmarked on their climate progress against a set of key indicators that reflect the goals of the initiative.
Ceres CEO and President Mindy Lubber and member of the Climate Action 100+ global steering committee, said:
“The urgency of the climate crisis means that companies must not only take bold in-house actions to reduce emissions to net-zero and improve governance of climate risk, they must also look beyond their four walls and publicly advocate for federal and state policies to mitigate climate change. Investors are looking at those advocacy efforts and if corporate trade association lobbying matches what companies are publicly stating.”
Investor signatories of the letters include BNP Paribas Asset Management, Boston Trust Walden, California Public Employees Retirement System (CalPERS), the California State Teachers’ Retirement System (CalSTRS), Mercy Investment Services, New York City Comptroller’s Office, New York State Common Retirement Fund, and Wespath Benefits & Investments.
Timothy Smith, Director of ESG Shareowner Engagement at Boston Trust Walden, said:
“As investors, we are urging companies to scrutinize their own public policy advocacy and also that of their trade associations, which too often have been strong opponents of forward-looking policy on climate change. We believe that dues-paying member companies should hold their trade associations accountable and urge changes, as necessary, in their positions on climate policy at the state and federal level.”
Adam Kanzer, Head of Stewardship – Americas, BNP Paribas Asset Management, added:
“The private sector cannot address the full range of impacts from climate change without strong public policy designed to help stabilize the climate. Companies should establish the Paris Agreement’s goals as their North Star when meeting with regulators and legislators. Their lobbying activities should be consistent with the Paris Agreement and the best available science, well governed and transparent.”