Author: Lauren Foye, Head of Reports at Zero Carbon Academy
A new global standard for climate lobbying has been launched by a consortium of investors-worth over $130 trillion between them.
Source: Unsplash
Investor networks representing 3,800+ members aid in developing requirements for climate engagement
Announced on 14th March 2022, a network of investors led by the UN Principles for Responsible Investment; the Institutional Investors Group on Climate Change (IIGCC); The Asia Investor Group on Climate Change (AIGCC); Swedish pension fund AP7; BNP Paribas, and the Church of England Pensions Board, have announced a global standard on responsible climate lobbying. The network collectively represents more than 3,800 members who between them manage assets in excess of $130 trillion.
The investors have come together to create a new climate standard for corporate lobbying, which is designed to stop firms and their trade associations from compromising efforts to deliver on the goals of the Paris Agreement. At the heart of the standard is a checklist of 14 requirements for climate-related engagement activity. Companies which apply for the standard must meet these terms, or risk having their actions challenged in a shareholder vote.
Further, the recommendations by the group include a public commitment to specifically align all climate-related lobbying to the Paris Agreement's temperature rise target of 1.5C, disclose all funding and other support for trade bodies involved in climate-related lobbying, undertake a public assessment of the impact direct and indirect climate lobbying activities have had on internal climate plans and the decarbonisation of the broader economy, and produce an annual review of how policy engagement activities align with global climate goals[i].
Making sure businesses walk the walk…
The significance of the standard is its desire to address a recurring issue where many businesses ‘talk the talk’ on climate sensitive activities, yet do not necessarily ‘walk the walk’ in changing their behaviour to the required extent.
As Business Green argue, companies are seeing ever-increasing pressure to align their lobbying activity with their in-house sustainability goals, amid fears there is a growing mismatch with firms' publicly stated decarbonisation ambitions and the ways they seek to influence legislation and regulation behind closed doors.
On this very matter, Stephanie Pfeifer, CEO of the IIGCC was quoted as saying: "For too long corporate lobbying activities have either been shrouded in opacity or run simply and overtly in contrary to the goals of the Paris Agreement, while the ambition is for all companies to adhere to the new standard, it is particularly pertinent for companies that claim to support a net zero pathway while simultaneously pursuing lobbying activity that runs counter to this. The new Global Standard will be a vital tool for investors to use in calling out and mitigating irresponsible climate lobbying through corporate engagement and good stewardship."[ii]
In order to do so, Charlotta Dawidowski Sydstrand, sustainability strategy at the AP7 pension fund, stressed that resolutions would be filed at firms that failed to crack down on lobbying activity that undermined climate goals: "Time must be called on negative climate lobbying, as active owners we are committed to engaging collectively and individually with companies globally to highlight and improve their climate lobbying accountability and performance and to escalate this stewardship where required. We will convey this expectation to the companies in which we invest and signal this commitment through our own actions."[iii]
References
*Zero Carbon Academy (www.zerocarbonacademy.com) aims to become the ‘go-to’ resource for the learning, information and community that individuals need to assess, plan, execute and monitor their organisation's migration towards a Zero Carbon footprint.
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