A report last month grabbed headlines grading companies on whether they—and their trade groups—are playing constructive or obstructive roles in climate policy debates. Google, Unilever and Cisco received a “B” (no company earned an A). Dozens of companies received a “D” or worse.
Companies, whether or not they agree with where they rank, should see the report and others that follow as an indication of new expectations for corporate roles in climate policy. Specifically, they need to have a good answer to a question that investors and journalists are asking:
How are your trade associations influencing climate policy?
What Is Your Company Saying on Climate, Both Directly and Indirectly?
In taking a more formalized approach to reviewing their policy positions on climate change, companies may find inconsistencies. Large, global companies can be involved in many hundreds of associations around the world, represented by many different employees.
Companies may find that associations of which they are members take a position which conflicts with their own, while suggesting that it represents the views of all their members. In some cases, companies may find they unintentionally take conflicting positions across different fora because their various participants are representing only their narrow perspective of the companies’ interests. In other cases, inconsistencies may be intentional, where it suits the company to appear to be supportive of action on climate change while delay action in practice.
There is the potential for inconsistencies between businesses and their trade organizations on any issue, but they are all the more likely on climate. Climate change is not necessarily core to most company’s participation in a particular association.
Yet these inconsistencies—deliberate or not—still dilute the strength of the corporate voice for climate change action. The onus is on companies to be sure they are engaging consistently, and that those purporting to speak for them do really represent their views.
We’re starting to see some companies, including Unilever and Google, start to stand up to speak for themselves and distance themselves from obstructive trade associations. Others have taken a more active role in engaging with trade associations either publicly or privately to try and align association positions to better represent them.
It’s in a Company’s Best Interest to Take a Proactive Role
All companies should be paying attention to this, if only because in the run-up to the UN climate summit in Paris later this year (COP 21) and beyond, they will be getting more questions from NGOs as well as investors. Responsible engagement in climate policy now factors into new guidance from the UN Principles for Responsible Investing. Letters are going out from investors to CEOs, asking “Are you engaging responsibly in climate policy?”