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.

The post The backroom battle for Canada’s climate future appeared first on Corporate Knights.

But far greater than the irony of Weihl’s voicelessness is the symbolism of his determination to be heard. Possessed of the urgency of the climate crisis, Weihl is using all the means at his disposal to continue to broadcast his message: that Big Tech needs to step out of the shadows, take a decisive stance on the climate crisis and put its full financial and political weight behind climate policy and action.

“Tech companies are viewed as forward looking,” Weihl types into the chat function of our Zoom conversation. “They have enormous influence. And they’re innovators. We need innovation at this point.”

Weihl knows the tech industry from the inside. He spent the first decade of his career as a professor of computer science at the Massachusetts Institute of Technology before shifting into the tech sector to land the position of “green energy czar” at Google in 2006 and later acting as director of sustainability for Facebook. He acknowledges the significant efforts these companies were making to mitigate climate change: buying billions of dollars of clean energy to power their operations, maintaining venture investment funds for cleantech start-ups, investing heavily in the research and development of decarbonization technologies. And yet, as the climate clock ticked on, Weihl could also see that the sector wasn’t doing enough.

“We were winning, but we weren’t winning fast enough, and with climate, winning slowly is the same as losing,” he said in a 2020 TED Talk. The same year, he founded ClimateVoice.

Inspiration for the project stemmed in part from what Weihl had observed in 2015/2016, as the American corporate world mobilized around LGBTQ2S+ rights. Companies like Apple, Walmart and the National Basketball Association threatened to pull out of states that were considering, or passing, regressive sexual- and gender-rights legislation. Weihl watched business affect social policy, and it got him thinking.

Most companies talk about how urgent climate is. And how committed they are to it. But when doing something on climate conflicts with or risks their core business, the profit concerns win.

He knew that the tech industry – with its forward-looking leaders, focus on innovation and massive influence on culture and politics – had a major role to play in climate action. But he also realized that despite the progress made – the innovations and cost reductions in renewable technologies and investments in green energy – the tech sector was failing to exploit its biggest lever: its potential to influence public policy.

Rather than stand up to the fossil fuel industry, as they were uniquely positioned to do, he saw tech companies playing at best a passive, and at worst an obstructive, role.

To illustrate this point, Weihl cites the fact that only one of the U.S.’s five Big Tech companies – Microsoft – was prepared to endorse last year’s Inflation Reduction Act. Containing a US$369-billion investment in climate-related programs, the IRA represented the most significant single step the U.S. Congress has ever taken to tackle climate change. Only after it passed into law, in August 2022, did Google let out a quiet cheer – in a tweet from its chief sustainability officer.

“Most companies talk about how urgent climate is,” Weihl types. “And how committed they are to it. But when doing something on climate conflicts with or risks their core business, the profit concerns win.” He says that tech companies are deeply compromised by their memberships in trade associations that consistently oppose climate bills, chief among them the U.S. Chamber of Commerce, which bristles at any mention of corporate tax hikes.

The tech sector’s hypocrisy on climate plays out in many ways. Earlier this year, Amazon effectively killed a bill put forward in the Oregon legislature that would have impelled large data centres and crypto miners in the state to use only clean energy by 2040. Data centres are big business in Oregon, many of them owned by Seattle-based Amazon, and they require vast amounts of power – equivalent to a small city – to cool their armies of computers. The Oregon utility that serves Amazon has long since exhausted its renewable supply and been forced to buy fossil-fuel-backed electricity; its emissions per kilowatt hour have increased 543% since 2010.

Young employees want to see climate action. And recruitment and retention are big pain points, so companies have to pay attention to employee sentiment on this.

Amazon takes every opportunity to tout its Climate Pledge, a commitment to reach net-zero carbon emissions by 2040; the arena it built in 2021 for Seattle’s new NHL franchise is named Climate Pledge Arena and aspires to become the first net-zero-certified arena in the world. At the same time, Amazon was willing to lobby hard – and successfully – to ensure that that clean energy bill died on the floor this spring, claiming that Oregon’s transmission lines and energy infrastructure wouldn’t support the switch.

Weihl says that this kind of duplicity doesn’t wash well with the tech sector workforce and that ClimateVoice is working hard to harness its frustration. “Young employees want to see climate action,” he types. “And recruitment and retention are big pain points, so companies have to pay attention to employee sentiment on this.”

ClimateVoice engages with tech workers, informing them of what their employers are doing on the climate front – both in and out of public view. Weihl says that when he launched his non-profit, most workers were oblivious to their companies’ lobbying activities and trade association involvement, but the more they learned, the more inclined they were to advocate. In the fall of 2021, he was pleased to see a loud chorus of tech workers speak out in support of the Build Back Better Act and again last summer in favour of the Inflation Reduction Act.

Weihl believes that this is how to foment change – from below. “In my experience, it’s very hard to persuade management on purely moral grounds, or on what’s best for society,” he types. “But if the workforce is clamouring for something, that makes it a near-term operational issue.”

In Weihl’s estimation, the tech industry has already developed some 80% of the technological solutions required to help mitigate the climate crisis. Now it has to deploy them faster, innovate further and, most importantly, speak louder and with one voice.

The post Meet the man calling out Big Tech’s climate hypocrisy appeared first on Corporate Knights.

But in the blistering summer of 2018, there was nothing celebratory about the Rhine. As Germany faced the hottest and driest weather since measurement began in 1881, the Rhine’s riverbed was reduced to a desiccated landscape of mudflats and dead fish. German industry, which uses the Rhine as a transportation lifeline, also suffered. The shrivelled Rhine of 2018 became a harbinger of the devastating impact that climate change will have on the backbone of the German economy.

Chemical giant BASF, whose headquarters and integrated chemical complex – the largest in the world – sit on the shores of the Rhine in Ludwigshafen, was hit particularly hard. Historically, some 40% of the raw materials entering the site do so by freight ships. In the summer of 2018, these were scraping bottom; cargo traffic was reduced to a trickle, and ships could be only partially laden. The river’s water was too warm to effectively cool BASF’s reactors. In total, production and delivery shortfalls caused by the 2018 heat wave cost BASF some €250 million (US$280 million), while its profits in the last quarter of the year were down nearly 60%.

Low water levels continue to plague BASF – and all the other major German chemical players that are concentrated along the Rhine. As they shift to shallower barges that carry only a fraction of the freight and less efficient rail and truck transport, they see their costs rise and their deliveries slow.

You’d expect a company so directly affected by climate change to be jumping on the decarbonization bandwagon. On the face of it, it is. To its iconic tagline, “We create chemistry,” BASF now adds “for a sustainable future.” But behind the scenes, Germany’s chemical industry – and BASF in particular – is proving to be exceptionally obstructive.

The British think tank InfluenceMap, which tracks corporate lobbying activity on climate policy, recently ranked BASF the third most “negative and influential” corporation in the world, following American oil giants Chevron and ExxonMobil in the first and second spots.

BASF resists the characterization, pointing to its track record – since 1990, the company has reduced its greenhouse gas emissions by 50% – and its objective to achieve net-zero by 2050 (five years later than the German national target of 2045). It has publicly endorsed the Paris Agreement on climate change as well as the EU’s target of being net-zero by 2050. And its product carbon footprint program, launched in 2020, allows customers to calculate the emissions generated “from cradle to gate” – through extraction, manufacturing and production – for all BASF products.

There is no question that the company is making moves in the right direction. In 2021, BASF purchased a major share of the world’s largest wind farm – Hollandse Kust Zuid – which is currently under construction in the North Sea, some 50 kilometres off the Dutch coast. The green electricity generated there will help power BASF’s European production sites, including Ludwigshafen.

Furthermore, the €10-billion engineering plastics plant BASF is now building in Zhanjiang, China, is slated to run entirely on renewable energy; the company is billing the facility – its third-largest globally – as a “role model of sustainable production both in China and around the world.”

But InfluenceMap looks beyond mainstream indicators to more subtle metrics: not only what companies present publicly in their annual reports, social media and public relations, but also the kind of research they sponsor, how they engage with regulators and elected officials and, importantly, the “indirect” lobbying they do through the industry associations they belong to. Taken together, InfluenceMap refers to this activity as a company’s “carbon policy footprint,” a kind of Scope 4 emissions.

Their analysis shows how common it is for a company’s outward claims to be at odds with its inner convictions. Eighty percent of the 25 companies deemed by InfluenceMap to have the most negative policy footprints look good on paper; like BASF, they have made net-zero commitments, and many, including BASF, scored A- or higher on Carbon Disclosure Project’s 2021 climate change disclosure scores, widely considered the gold standard of environmental reporting.

In exposing the gap between words and actions, InfluenceMap is not just looking to name and shame. The hope is that greater transparency will ultimately lead to a closer alignment between industry on the one hand and science-based policy benchmarks, like those articulated by the Intergovernmental Panel on Climate Change, on the other. And for the most part, that’s what’s happening.

According to Will Aitchison, EU strategy manager for InfluenceMap, some sectors of the German economy – even its automotive industry – have started to genuinely reconcile themselves with Paris targets and support legislation in that direction. But the chemical industry is a standout, and for good reason. The largest industrial consumer of energy of all sectors, in Germany it has relied on an ample supply of cheap Russian gas. BASF’s facility in Ludwigshafen represents 4% of Germany’s total gas consumption: roughly as much energy as a city of one million people. Half of that gas is used as feedstock – a raw material – in the production of chemicals. The other half is used to generate electricity.

“The chemical sector is anchored in fossil fuels,” says Aitchison. “And its lobbying reflects that.”

The industry has a lot to lose from a rapid transition away from fossil fuels, and BASF more than most, thanks to its 67% stake in Wintershall Dea, the oil and gas producer that it co-owns with the Russian company LetterOne. Wintershall Dea is one of the five co-funders of Gazprom’s Nord Stream 2 pipeline – whose certification Germany halted following the Russian invasion of Ukraine – and remains invested in several Russian gas fields, producers and network operators.

It’s no wonder that BASF is the most “engaged of European chemical companies” in its climate lobbying, according to Aitchison. And BASF, the largest chemical company in the world, with €78.6 billion in sales in 2021 and 110,000 employees worldwide, has a lot of weight to throw around.

Taking a run at climate regulations

So how does it do that? For one, it quibbles with climate-related regulations. Take, for instance, Europe’s proposed carbon border adjustment mechanism. The measure, a central plank of the European Green Deal, will impose tariffs on carbon-intensive imports into the European Union as a way of preventing “carbon leakage” – the relocation of production to less climate-ambitious jurisdictions – while also encouraging non-EU countries to introduce carbon pricing.

Looking at its own product palette, BASF sees primarily the downsides to the mechanism. It uses its roughly €3.5-million annual lobbying budget in Brussels to repeatedly ask the European Commission to exempt ammonia, nitric acid and the products along its value chain: essential components of the polyamide, polyurethanes and amines that BASF feeds to the textile, automotive, agriculture and pharmaceutical industries. Fearing its own products will no longer be cost-competitive on global markets, BASF reminds the European Commission that its commitment is not only to climate neutrality but also to economic growth.

Likewise, BASF opposes the legislation of energy savings targets, arguing instead for greater energy efficiency and a transition to renewables. The position is reinforced by the Federation of German Industries (Bundesverband der Deutschen Industrie, or BDI), the umbrella organization that represents some 100,000 companies – including BASF – and acts as the loudest mouthpiece for German industry. It advocates for energy reduction regulations only as a “last resort” and calls the EU’s proposed 1.5% energy savings target “unrealistic.”

Hiding behind industry groups

Companies frequently “get their industry associations to do the dirty work,” as InfluenceMap spokesperson Simon Cullen puts it. While most customers will recognize the name BASF, fewer will be following the BDI, or Cefic (the European Chemical Industry Council) or VCI (Verband der Chemischen Industrie) – all groups BASF belongs to and in which its executives play leading roles.

The relative anonymity of industry associations makes it much easier for them to push for policies that reflect their own vested interests. BDI, for instance, opposes the 2035 zero-emissions vehicle standard proposed by the European Commission and is lobbying the German federal government, in light of Russian gas shortages, to extend the use of coal and to facilitate a transition from gas back to oil.

Likewise, VCI is pushing for the EU to water down its taxonomy of sustainable finance to include economic activity involving gas. Currently, only 11% of BASF’s revenue is considered eligible for consideration under the EU Taxonomy. VCI and Cefic are both advocating against key elements of the proposed carbon border adjustment mechanism and in favour of a continuation of emissions allowances, which effectively forgive emissions for some producers.

This is the line that BASF walks: endorsing climate policy, unless or until it affects its own economic performance. “We are convinced that climate neutrality and sustainable resource use are not possible without a competitive chemical industry,” writes BASF spokesman Philipp Rosskopf in an email.

The implication is clear: BASF will be part of the solution, providing that its bottom line doesn’t suffer.

Investor pushback

Investors are paying attention. Since the asset management division of French banking group BNP Paribas began looking more closely at climate-related lobbying in 2018, it has seen “a rapid uptick in engagement on this issue by institutional investors,” according to spokesperson Claire Schiff. Together with a group of investor networks and other asset managers, BNP Paribas has established a global standard of responsible climate lobbying: a compendium of 14 indicators that can be used to assess how consistent a company’s advocacy work is with Paris targets.

“If there is misalignment, we expect corrective actions to be taken,” says Charlotta Sydstrand, spokesperson for Swedish public pension fund AP7, one of the instigators of the global standard. In 2018, AP7 asked BASF to review its own climate lobbying and publish a list of its memberships in industry associations. It obliged. The disclosure that BASF provided was given a failing grade by InfluenceMap. But the process at least created greater transparency and the beginnings of what people in the field refer to as “engagement” – the gentle tug of war between the forces of corporate self-interest and global responsibility.

A close look at BASF’s books suggests that these two objectives may not be so far apart after all. BASF distinguishes between what it calls accelerator sales – from products that are biodegradable, energy-saving or emissions-reducing, that make a “substantial sustainable contribution” – and the rest of its revenue. By BASF’s own calculations, revenues from its accelerator sales have grown at 69% over the last three years, as compared to 18% for the rest of its portfolio. And accelerator sales, currently 31% of the total, constitute an ever-growing share of BASF’s business.

The tide also seems to be turning at fellow chemical giant Bayer, which in the last year has endorsed the climate provisions in the U.S. Inflation Reduction Act and is pushing Germany to accelerate its expansion of renewables, rather than reboot fossil fuels, in the wake of Russian gas shortages.

With this kind of momentum, BASF shouldn’t feel the need to practise double-talk much longer. And the sooner it stops, the better.

The chemical sector is anchored in fossil fuels. And its lobbying reflects that.

-Will Aitchison, EU strategy manager for InfluenceMap

“If what you are saying to your investors does not line up with how you lobby, you have a big problem,” says Peter Damgaard Jensen, who for 19 years was CEO of one of Denmark’s largest pension funds and has served as chair of the Institutional Investors Group on Climate Change (IIGCC), a European body whose members – mainly pension funds and asset managers – collectively manage more than €51 trillion in assets.

Damgaard Jensen has listened to many companies distance themselves from their industry associations or claim that they have no choice but to go along. He has no time for such excuses. Membership in associations is rarely mandatory, and companies like BASF have considerable sway over the ones to which they belong. It behooves them to lead, not to follow. And investor coalitions like the IIGCC are only getting more assertive.

“They won’t change us,” Damgaard Jensen says. “It’s us that will change them.”

It won’t happen overnight. Damgaard Jensen calls the process a “long dialogue” in which European companies tend to be moving faster than American ones, with BASF a notable exception. He acknowledges that the transition away from fossil fuels poses a particular challenge for the chemical industry; demand for its products continues to grow, while its most critical input is under threat.

But companies won’t meet the challenge by dodging it, or lobbying themselves into a corner, surrounded by their own stranded assets. They must exercise model corporate behaviour: basing today’s decisions on where they see themselves 20 years down the road and talking to everyone – government, shareholders and their peers – out of one and the same side of their mouths.

The post The Climate Blockers: BASF quietly lobbies against strong climate policy while talking a big game appeared first on Corporate Knights.

These companies are not run by wide-eyed idealists. In many cases, these businesses are already making billions of dollars supplying climate solutions to the market. Even corporations that are less directly implicated in the economic upside of climate action recognize the imperative for a low-carbon economy, because no business can profit in an environment of climate chaos.

Yet, despite this reality being clear as day, a handful of laggard companies and their pliant industry associations continue to advocate for business as usual. Worse, some have publicly pledged to be net-zero while actively blocking much-needed climate policies on an international scale.Fossil fuel companies make up a good portion of this laggard group, and yet, with their diminished economic clout representing a small fraction of today’s economy (less than a 10th), you’d think their collective voice would be no more than a distant echo. It’s not.

As the U.K.-based non-profit InfluenceMap has detailed, these powerful laggards include the likes of Exxon Mobil, Chevron, Toyota and BASF SE. These companies’ minority views unduly dominate the megaphone of major industry associations like the U.S. Chamber of Commerce (which has opposed climate legislation, such as Build Back Better and the Inflation Reduction Act) and the Federation of German Industries, which actively opposed the 2035 zero-emissions vehicle standard proposed by the European Commission

These companies have well-developed policy muscles formed from living in highly regulated industries for the past 100 years, and now they are fighting for their lives. They have greenwashed their way into the climate conversation and have hijacked the voice of business, according to research by InfluenceMap.

While policy-blocking industry associations are a big part of the problem, equally problematic are those companies sitting on the sidelines. As their government relations departments and industry associations take the bench, they’ve left a wide-open field for fossil fuel interests to dominate.  

If we are to preserve any chance of meeting the targets agreed upon in the Paris Agreement, companies that care about climate change – and its economic impacts – need to get off the sidelines and into the game. They need to make a point of “outsizing” and “outvoicing” the 10% of business clinging to a bygone era. This near-term course correction is already underway with the launch of the Corporate Knights Action Declaration on climate policy engagement, an initiative by Corporate Knights and the Global 100 Council that has garnered the support of more than 50 global companies representing some US$900 billion in annual revenues (almost 1% of global GDP).

Acting as the initiative’s secretariat and using real-time policy intelligence from InfluenceMap, Corporate Knights and the Global 100 Council (which includes CEOs from among the Global 100 Most Sustainable Corporations in the World) have mobilized some of the world’s most powerful actors to align their policy engagements and those of their industry associations with the Paris Agreement.

This is only the start of what will be a series of big wins in the race to a low-carbon future.

Transformation won’t happen overnight, but it’s clear that a vanguard and major contingent of companies from every sector and continent are now committed to shifting the culture of their industry associations so that the voice of business will be loud and proud in favour of speeding up effective climate policy.

Action Declaration on climate engagement

To move the needle, the Action Declaration takes a three-pronged approach. By signing on, signatories are committed to: 

1. Supporting climate action aligned with the Paris Agreement when engaging with policy-makers
2. Working with their major industry/trade associations to advance alignment with the Paris Agreement 
3. Monitoring and disclosing climate policy alignment for their companies and their major industry/trade associations 

Number three is especially important, as it reinforces the management theorist Peter Drucker’s maxim that “what gets measured gets managed” (a core pillar in Corporate Knights’ philosophy). The more we know about what companies and industry associations are (or aren’t) doing, the faster we can either replicate and deploy good solutions or redirect away from bad apples.

Furthermore, the initiative will identify opportunities for this newly aligned group to work together. Collectively, they have a much better chance of driving change within specific industry associations that have been particularly problematic when it comes to climate policy blocking.

With corporate leaders in sustainability taking a pronounced stand, we can begin to influence the shift toward a more constructive, aligned dynamic between business, major industry trade associations and government.

Toby Heaps is the co-founder and CEO of Corporate Knights.

The post Big business puts its industry associations on notice: No more blocking climate policy appeared first on Corporate Knights.