UK charity calls on investors to scrutinize trade associations for companies’ policy conflicts
UK-based shareholder activist group ShareAction is calling on investors to demand greater transparency from FTSE 100 firms that publicly support action against climate change while also being members of trade associations that lobby against taking action to mitigate climate change.
In a five-page briefing, the charity cites research from the Policy Studies Institute (PSI) at the University of Westminster that concludes many large publicly traded companies have financed lobbying efforts worth millions of dollars a year through trade associations to stop action to fight climate change.
The ShareAction briefing says companies’ funding of associations that oppose action against climate change poses serious risks to the companies’ reputations and poses business risks as climate change worsens.
‘The financial risks that climate change pose have never been clearer, and investors need to recognize that through funding trade associations, companies can have an impact far beyond their own operations,’ Clare Hierons, chief operating officer of ShareAction, says in a press release. She urges investors ‘to challenge companies on the transparency and consistency of their public policy positions; thereby undermining obstructive lobbying by trade association and allowing the EU to take more ambitious action.’
According to the PSI study, trade association Business-Europe spends more than $6 mn a year on lobbying, partly financed by members including BASF, Bayer, BP, Procter & Gamble, Rio Tinto and Shell Chemicals. It says further lobbying is conducted by the European Association of Metals, which represents companies including Anglo American and BHP Billiton, and Eurelectric, backed by Siemens, Accenture and Tesla Europe.
ShareAction is calling on companies to scrutinize the associations they subscribe to and, where their policies differ from the corporation’s public policies on climate change, publicly distance themselves. It also calls on investors to demand accountability.
‘Many of the mechanisms that are commonly used to influence policy are not transparent and are difficult to monitor,’ the briefing concludes. ‘Greater disclosure will enable analysis of whether the lobbying being undertaken on behalf of companies is in the best interests of the company and its investors.’
