BNP Paribas Asset Management, the Church of England Pensions Board and Swedish pension fund AP7 launch research project that will identify hallmarks of responsible corporate climate change lobbying and develop a tool that will allow investors to compare and contrast corporate climate change lobbying strategies.
BNP Paribas Asset Management, the Church of England Pensions Board, and Swedish pension fund AP7 have teamed up with specialist advisory firm Chronos Sustainability to develop a framework to help guide responsible corporate climate change lobbying activity.
The partners intend to launch a tool by the close of this year, which would allow investors to assess whether companies' direct and indirect lobbying efforts support or hinder the goals of the Paris Agreement.
A research project launched today will look at the ways that companies and their proxies, such as trade associations, exert influence on climate policy. It aims to better define how these activities should be managed and overseen by companies.
Corporate lobbying on climate-related policies remains a highly contentious topic, with some carbon intensive firms accused of nominally supporting the Paris Agreement while funding trade bodies that then lobby against emission reduction efforts. The area has become a major cause for concern for sustainable investors, who have tabled a series of shareholder resolutions in recent years calling on corporates to review their trade body membership and quit groups that undermine climate action.
The partners hope that the new project will help identify gaps in current approaches to lobbying, and provide in a new mechanism for investors to analyse, assess, and compare different corporate practices.
AP7's Charlotta Dawidowski Sydstrand emphasised that establishing a standardised benchmark for responsible corporate climate change lobbying was critical to reaching global climate goals. "We find it unacceptable that at this point in time companies still counteract ambitious climate policy, either directly or through their business organisations," she explained. "We are championing this research project in order to provide greater understanding of what good practice looks like when it comes to lobbying on climate issues."
The crux of the initative will be a new framework that will enable investors to identify the companies that lobby in line with global climate targets and boast robust lobbying governance and oversight practices. The partners said that the tool will also shed a light on the companies that act effectively when trade associations and other bodies behave in ways that contradict their in-house climate change policies.
"Misaligned and misleading corporate lobbying practices undermine the ability of governments to act on climate change and meet the goals of the Paris Agreement," said Clare Richards from the Church of England Pensions Board. "The stakes are high, and it is right that investors are working with and challenging companies to clean up their lobbying activities and demonstrate better practice."
Corporate climate lobbying has come under the microscope of late, with some companies committing to undertake reviews of their climate lobbying processes after being confronted by shareholders.
In September, 200 investors with more than $6tr assets called on corporates to ensure that lobbying efforts were consistent with the Paris Agreement, noting that a failure to do so presented regulatory, systemic economic, legal and reputational risks to investors.
BNP Paribas Asset Management's Helena Viñes Fiestas said shareholders increasingly "expect that when companies engage with public policymakers they will support cost-effective policy measures to mitigate climate change risks and support an orderly transition to a carbon-neutral economy by 2050 at the latest".
"In recent months, BNPP AM has engaged with companies, and filed resolutions, to request greater transparency on their lobbying practices and to be consistent with the goals of the Paris Agreement," she added. "This project will help us further refine our dialogue with companies, as how they influence policymaking can help avoid catastrophic consequences - not least financial."