Since the beginning of 2024, activist investors have filed at least 54 shareholder resolutions calling on companies to report their climate lobbying or political spending — including through trade associations — and how that lobbying aligns with the companies’ climate targets.
Since February, nearly 1,000 corporate and nonprofit sustainability professionals have signed a pledge, first presented at GreenBiz 24, to push their employers to lobby for pro-climate policies — and consider parting with trade groups that obstruct them.
These demands highlight a longstanding contradiction: Many companies have pledged to achieve net-zero carbon emissions, but they retain memberships in industrial lobby groups that block climate change policies.
One of the main targets of stakeholder demands is the U.S. Chamber of Commerce, the country’s largest business organization, which has a long record of opposing climate legislation. In early June, a coalition of 50 climate-focused groups issued a letter to the Chamber’s member companies pointing to the misalignment of U.S. Chamber lobbying on federal climate policies with widely held climate goals among its members.
"We need climate policy progress in order for the private sector to achieve all the goals and targets they’ve set out for themselves," said Deborah McNamara, executive director of Climate Voice. Policies such as tax incentives for clean energy investment and consistent emissions reporting standards help companies to achieve net zero. But some trade associations "are blocking that progress."
Urging companies to leave the lobby groups they fund
The 975 professionals who signed the L.E.A.D. statement initiated by Climate Voice, founded by former Google and Facebook sustainability executive Bill Weihl (a contributor to GreenBiz), are asking companies to:
- Leave associations that obstruct climate policies.
- Elevate climate policy as a company priority.
- Advocate publicly for effective binding climate policies.
- Demonstrate real commitment to the collective action needed to achieve the just and equitable transition from fossil fuels agreed to at COP 28.
Shareholder votes are becoming harder to ignore
Overall, federal lobbying by corporations continues to rise, reaching $1.2 billion in the first quarter of 2024.
On the investor side, pro-climate resolutions are racking up significant, if not majority, shareholder support. The 30 climate-related lobbying resolutions that have been voted on so far this year garnered an average of 26.7 percent shareholder support, based on results pulled from a Ceres database. Political spending resolutions, meanwhile, have won an average 30.3 percent vote in favor.
Support for these measures has reached a point where companies can no longer afford to ignore them. "As a general rule, U.S. shareholder resolutions with more than 30 percent support are considered a strong prompt for management action," said Lindsey Stewart, Morningstar’s director of stewardship and policy.
‘Increasingly material risks’
Two lobbying resolutions were flagged by Climate Action 100+, the largest investor-led coalition focused on climate, in its list of resolutions particularly worthy of investors’ consideration:
- A measure filed at NextEra Energy Inc. by CCLA Investment Management, Mercy Investment Services and Railpen won 32.5 percent of shareholders’ votes.
- Another, at PACCAR Inc. by Calvert Research & Management, won 29.3 percent.
"Corporate lobbying that is inconsistent with the Paris Agreement presents increasingly material risks to companies and their shareholders," CCLA’s resolution at NextEra said. "Of particular concern are trade associations and other politically active organizations that say they speak for business but too often present forceful obstacles to addressing the climate crisis."
Corporate lobbying that is inconsistent with the Paris Agreement presents increasingly material risks to companies and their shareholders.
Restive bank investors
Bank shareholders were notably supportive of lobbying resolutions:
- At Truist Financial Corp, a resolution filed by John Chevedden, a prolific shareholder activist, seeking a report on lobbying won 41.2 percent of the shares voted.
- A similar resolution at Bank of New York Mellon Corp won 38.4 percent.
- At Goldman Sachs, the vote was 39.4 percent in favor.
- Shareholders at Wells Fargo faced three resolutions. Two of them received 36.1 percent and 25.3 percent in favor. A third, filed by Seventh Generation Interfaith Coalition for Responsible Investment asking how the bank’s lobbying aligns with net zero goals, won 28 percent.
The 2024 proxy statements for all four banks state that management opposed the lobbying resolutions. "We already provide transparency and publish lobbying disclosures," Truist Financial Corp explained in its proxy. "Following our early 2022 announcement of a net-zero-greenhouse-gas-emissions goal by 2050, we developed a monitoring protocol to review the climate legislation, advocacy, and lobbying activity
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