Since 1925, the headquarters of the U.S. Chamber of Commerce has sat squarely across from the White House, a formidable beaux arts edifice designed to reflect the power and unity of American business interests. From the outside, there is nothing to suggest what’s going on within: that the biggest business association in the world may be beginning, ever so slightly, to crumble.
In recent years, some of the group’s largest members – including Microsoft, Ford, Meta, even Shell – have publicly challenged the trade organization’s advocacy around climate change. Ever since the chamber successfully lobbied to torpedo the biggest piece of climate legislation to reach Congress – the Build Back Better Act – in 2022, more and more members have indicated that if the organization doesn’t change its tune, they’ll be cutting ties.
This isn’t just a U.S. phenomenon. Climate-forward corporations the world over are starting to raise their voices against trade groups that actively undermine climate policy. In 2022, Swedish car-maker Volvo dropped out of the European Automobile Manufacturers’ Association after the group refused to lobby for a more ambitious phase-out of fossil fuel cars than the European Union’s 2035 deadline. Last March, Unilever publicly announced that it was reviewing its membership in 27 trade associations whose climate lobbying appeared to be misaligned with its own. The consumer products giant said it would be exiting any associations unwilling to become “catalysts for positive policy change,” as chief sustainability officer Rebecca Marmot put it.
But according to a recent report by U.K.-based think tank InfluenceMap, corporate Canada is holding its tongue. Despite the outsized influence of the fossil fuel industry on Canada’s cross-sector trade associations, none of their members seem willing to speak up. Yet.
“The misalignment here is clear,” says Kendra Haven, director of projects at InfluenceMap, referring to the difference between the climate lobbying activities of trade associations like the Canadian Chamber of Commerce, the Business Council of Canada, and Canadian Manufacturers and Exporters and the positions of their members. “But so far, nobody has stepped forward.”
InfluenceMap’s work is premised on the belief that climate action will happen only in collaboration between business and government and that it’s critical to understand how the two interact – specifically, how the private sector influences public opinion and policy. To this end, the British think tank takes companies and trade associations under the lens to examine all facets of their “climate engagement”: the messaging conveyed in their social media and public relations campaigns, the research they sponsor, the contact they maintain with regulators and elected officials, and the campaigns and political parties they fund. Some of this activity is visible to the public eye, but much of it is not.
By shining a spotlight on corporate influence, InfluenceMap hopes to create awareness among investors and the broader public, and ultimately to push the private sector to align itself with climate science. Sunshine, it is said, is the best of disinfectants.
For its Canada platform, which launched in May, InfluenceMap looked at the climate engagement of 45 of the country’s highest-emitting companies as well as nine of its most influential trade associations. It found that none have policy engagement that is considered “science-aligned” – or consistent with the Paris Agreement goal of limiting global temperature rise to well below 2°C. Of the 45 companies, drawn from across Canada’s economy, 12 were found to be “partially aligned”; the rest were either completely misaligned or impossible to assess because of the opacity of their engagement activities. Just six companies – all in the oil and gas sector – were seen to be actively engaged in advocacy: all pushing for the expansion and ongoing subsidization of fossil fuels.
“Ninety percent of the world has set a net-zero target. We should see so much more lobbying towards that,” said former environment minister Catherine McKenna, now chair of the UN’s High-Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities, at the InfluenceMap launch, hosted by Corporate Knights.
It comes as no surprise that the most vehement lobbying bodies in Canada are the trade associations representing fossil fuels. In the cacophony of climate lobbying, the Canadian Fuels Association, the Pathways Alliance, the Canadian Gas Association and the Canadian Association of Petroleum Producers are yelling the loudest by far, railing against the three key climate policies on the federal government’s agenda: the proposed oil and gas emissions cap, the methane-reduction regulations for the oil and gas sector, and the emissions performance standard for electricity generation.
They’re also yelling in sync, drilling home the same message: that the world needs Canada’s “responsibly produced” energy; that Canada, as one of the “cleanest” producers of natural gas, should grow its market share; that liquefied natural gas (LNG) will displace coal in emerging countries; that Canadian oil and gas is vital to global energy security.
Ninety percent of the world has set a net-zero target. We should see so much more lobbying towards that.
-Catherine McKenna, former environment minister
What is more surprising is the extent to which oil and gas interests are colouring cross-sector trade associations. In recent years, the Canadian Chamber of Commerce, the Business Council of Canada, and Canadian Manufacturers and Exporters may have voiced support for Canada’s 2050 net-zero goal, but they’re also lobbying Ottawa to, variously, drop the oil and gas emissions cap, expand the country’s LNG infrastructure and increase Canadian exports of oil and fossil gas.
InfluenceMap, which slapped all three groups with Ds in its report, points out that the fossil-fuel-friendly positions of these associations misrepresent their memberships, which, on average, engage more positively on climate issues. “Trade associations tend to protect the members that have the most to lose,” Haven says. “It’s the lowest-common-denominator effect.”
Neither the Canadian Chamber of Commerce nor the Business Council of Canada provided comment on InfluenceMap’s findings.
Oil companies like Shell, Suncor, Cenovus and ConocoPhillips are all paying dues to the Business Council of Canada, which has repeatedly lobbied Ottawa to drop the oil and gas emissions cap and opposed the clean fuel regulations. Corporate leaders such as BCE (Bell Canada Enterprises), Rogers, Telus, Desjardins, Sun Life, HP Canada, Microsoft Canada – all of which have publicly committed to be net-zero by 2050 – are also members of the council. InfluenceMap is hoping more companies will use their membership clout to encourage their business associations to speak up more consistently in favour of progressive climate policies.
“More than ever, we’re seeing how entrenched oil and gas are in the trade associations,” McKenna said. But, she added, trade groups are “driven by their membership. Companies should see this is an opportunity for them to get what they need.”
Coro Strandberg, a B.C.-based corporate sustainability consultant and co-founder of the Canadian Purpose Economy Project, points out that divorcing trade associations is not the only way to effect change. Widening the aperture beyond the 45 companies that formed the basis of InfluenceMap’s analysis, Strandberg sees positive developments in the trade associations of several sectors of the Canadian economy, including steel, cement, forestry, dairy and chemicals. She doesn’t buy the notion that associations are beholden to the laggards. “The dynamic in trade associations is that they serve their members,” she says. “They wait for members to demand that they move forward on climate.”
The dynamic in trade associations is that they serve their members. They wait for members to demand that they move forward on climate.
–Coro Strandberg, co-founder Canadian Purpose Economy Project
This can happen remarkably quickly, as evidenced by a recent turnaround at the Cement Association of Canada (CAC). Cement, which is produced through the decarbonization of limestone, is responsible for some 8% of global greenhouse gas emissions. During the pandemic, the Canadian cement industry noticed a drop in its market performance as investors became more concerned about the potential impact of carbon pricing. “Everyone knew that cement had a huge CO2 footprint,” says David Redfern, CEO of Lafarge Canada’s Eastern Canada division. “But few were concerned until it started to impact our stock price.”
In response, the CAC shifted its focus. Bringing more sustainability and government relations experts on board, the organization began to proactively engage with government. In partnership with Innovation, Science and Economic Development Canada, the CAC developed a roadmap to net-zero for the cement industry. Redfern emphasizes that the roadmap, which was published in 2022, is not a fixed thing, but a dynamic process in which government, producers and end users will all play a role. “We want to change the rules so that the sustainable choice will also be the profitable choice,” he says.
As inspiring as the cement industry case is, it is also somewhat unique. The CAC has a relatively small and coherent membership; Redfern describes them as five like-minded multinationals. Most importantly, the cement industry knows it has a solid future. The same can’t be said of the fossil fuel industry. Its exorbitant public relations campaigns and manic lobbying efforts are seen by many as the desperate measures of a sector that’s fighting for its life. The problem is, they seem to be working.
“All of Canada’s climate policies have been heavily distorted by the oil and gas industry,” says Adam Scott, who directs Shift, an initiative that steers pension funds toward sustainable investments. Scott is watching in dismay as Ottawa considers yielding to the fossil fuel industry’s relentless pressure to adopt a “Made in Canada” taxonomy for sustainable investment – one that will likely be more forgiving of fossil gas such as LNG than its European counterpart – and to water down sustainable-finance reporting standards in this country.
“Oil and gas is backed into a corner,” Scott says. “It knows it can’t block climate policies forever, but it can slow them down. And it is.”
Kendra Haven expects that as more companies are added to InfluenceMap’s Canada platform, she will find some that are more positively engaged on the climate. She hopes that they – and Canadian companies across the board – will stop ceding the floor to oil and gas. As Dylan Tanner, the founder of InfluenceMap, puts it, climate change is ultimately a function of physics and chemistry. The sooner that the corporate world aligns itself with science, the sooner it can take advantage of the vast opportunities the green economy offers – and help mitigate climate disaster.
