Nearly all of the world’s largest 200 industrial companies have directly or indirectly opposed climate policy since the landmark Paris Agreement was signed three years ago, according to new research.
Analysis by InfluenceMap, a UK-based think tank, examined the lobbying activities of 200 of the world’s biggest companies and 75 of the most powerful trade groups and the links between them since December 2015.
It found that 30 percent of all companies analysed have directly lobbied against climate policy in the last three years and that 90 percent of them retain membership to trade associations which have actively opposed climate policy around the world.
While the findings have come as no surprise to campaigners calling out corporate lobbying on climate policy, the research highlights the key role trade associations continue to play in influencing policy-makers and watering down climate policy.
Edward Collins, project manager at InfluenceMap, told DeSmog UK that trade associations are doing the “dirty work” and lobby for much stronger positions than their members support in public.
“A lot of the worst lobbying activities are being increasingly outsourced to trade groups as companies are more weary to take it on themselves to directly lobby government and put their names to it,” he said.
Ranking Corporate Spin
InfluenceMap used a scoring system to rank companies and trade associations according to how well their actions align with the Paris Agreement target of limiting temperature rise “well below two degrees” above pre-industrial levels.
The analysis selected the top 200 companies of the 2018 Forbes Global 2000, a list of all publicly-traded companies from 60 countries which this year collectively accounted for a market value of $56.8 trillion.
Financial companies and state-owned enterprises listed on Forbes Global 2000 were yet excluded from InfluenceMap’s analysis.
The think tank ranked companies from A to F as an indicator of how ready they are for a global low-carbon policy — taking into account their membership to trade associations.
Among the 25 most influential companies of the list, Ikea, Apple, Unilever and SSE ranked the highest and scored A on their positive engagement with climate policy.
At the bottom of the table, the worst performing companies include a host of fossil fuel firms such as the Koch Industries, Chevron, Conoco Phillips, ExxonMobil and BP.
The Case of BP and Shell
In the UK, InfluenceMap found SSE and The National Grid to be leading the way in terms of positive engagement with climate policy. But Shell and BP ranked a D and an E+ respectively for obstructing climate policy through covert lobbying means while publicly supporting climate action.
The report argues that BP appears to have “a negative and conflicting approach to climate regulation.”
It says that while BP has shown evidence of support for action on reducing greenhouse gas emissions and the UN climate negotiation process, the company “ultimately does not appear to be aligned with a transition to a low-carbon future and has stressed concerns against the case for ambitious emission reductions.”
The report cites examples from 2015 when BP CEO Bob Dudley publicly supported a carbon tax and energy efficiency regulation and chairman Carl-Henric Svanberg used his opening speech to investors at the company’s AGM to talk about energy transition and BP’s support for renewable energy subsidies.
Yet, the same year, a Guardian investigation revealed that BP lobbied to undermine EU renewable energy targets and subsidies in favour of gas.
In 2016, another Guardian investigation found that the EU dropped policy to cut pollution and speed-up clean energy uptake after receiving a letter from a top BP executive warning of an industry “exodus” from Europe if the proposals went ahead.
BP is also a member of the Australian Petroleum Production & Exploration Association (APPEA), FuelsEurope and the National Association of Manufacturing, trade groups which have consistently opposed ambitious climate change policy in Australia, Europe, and the US.
BP did not respond to DeSmog UK’s request for comment in time for publication.
The report found that Shell had “mixed and sometimes conflicting engagement with climate change policy.”
It argued that while Shell accepts climate change science and has shown support for the Paris Agreement, public statements from the company’s leadership have “repetitively suggested that action on climate change should be balanced against the economic feasibility of emission reduction.”
The report also found that while Shell said it embraced a low-carbon transition, CEO Ben Van Beurden previously said gas will be an indefinite part of the energy mix and that the company repeatedly said that a large-scale dependence on fossil fuels will be necessary “for decades to come.”
Shell is also a member of a number of trade associations obstructing climate action including BusinessEurope, FuelsEurope, Western States Petroleum Association, the National Association of Manufacturers, The American Petroleum Institute, the Canadian Association of Petroleum Producers and APPEA.
Pascoe Sabido, from Corporate Europe Observatory, warned that fossil fuel companies’ “sleek PR” was a “dangerous distraction” from the level of climate action needed to achieve the Paris Agreement goals.
He added that narratives which put gas at the heart of a “clean energy strategy” would allow fossil fuel companies to continue business as usual and should not go unchallenged.
A Shell spokeswoman said climate change is “an immense societal challenge that Shell has long recognised and where we are committed to playing a constructive role, moving in step with society towards a lower carbon future.” She added that society faced a dual challenge of “meeting growing demand for energy, while at the same time transitioning to a lower carbon world.”
She said that Shell belonged to many trade organisations “for a variety of reasons” including “workforce issues, technology innovation or economic development” and that the company did not always agree with the views of these organisations on every issue. “Where this is the case, we look at the totality of the organisation not a single issue,” she said.
Trade Associations: Powerful Lobbying Vehicles
Since the election of Donald Trump in 2016, Collins, of Influence Map, said the roll back of Obama-era climate and environmental policies in the US did have an impact on the report’s findings but that lobbying continued to be rife in Europe.
“In Europe, lobbyists tend to be more focused on the small print and the technical details of legislation debated in the corridors of the European Commission. This is how a lot of legislation gets watered down without the public understanding what is happening,” he said.
Sabido, from Corporate Europe Observatory, described the work of these trade groups as “lobbying vehicles” engaged in a “race to the bottom.”
He said companies sometimes had to accept other members’ strong lobbying demands if they wanted the trade group to address their own concerns and issues.
“We have to be clear that trade associations are a convenient front for companies, which can pursue their own branding strategies while the trading associations do the dirty work,” he said.
Sabido added that the “symbiotic relationship” between fossil fuel companies and governments across Europe had to end in order for policy-makers to decide on ambition climate policy without interference from fossil fuel lobbyists.
Climate Risk and Shareholders’ Interest
In recent years, the financial sector has ramped up its warning that failing to tackle climate change could disrupt financial stability and the economy.
Earlier this year, Bank of England governor Mark Carney said climate change could have a “catastrophic impact” on the financial system and that companies had to acknowledge and disclose climate-related risks to their business.
Commenting on InfluenceMap’s findings, Tom Burke, chairman of the environment policy think tank E3G, told DeSmog UK that “it was not rare for businesses to speak out of both sides of their mouth” but warned that failing to positively engage with climate policy was not in the interest of these companies’ shareholders.
“If climate policy succeeds, it will be tough on the fossil fuel industry who will be out of business. But they represent about 10 percent of the market.
“If climate policy fails, the remaining 90 percent of the market will have its interest damaged. The fossil fuel industry is effectively eating the lunch of the rest of the financial sector,” he said.