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USA: Investor groups launch new initiative targeting business support for climate policy

"Business Support for Science-Based Climate Policy Seen as Critical to Rein in Climate Change, Say Investors", 16 November 2020

As President-elect Biden makes clear that tackling climate change will be at the fore front of his administration’s agenda, investors and members of the Interfaith Center on Corporate Responsibility (ICCR) are announcing the launch of a new initiative designed to enlist the support of business in this endeavor.

In recognition of the enormous power and influence of the business community on environmental legislation and regulation, investors say they are petitioning portfolio companies to align their lobbying activities with the goal of limiting average global warming to well below 2° Celsius, consistent with the Paris Climate Agreement...

ICCR members are requesting engagements beginning with 25 companies representing multiple sectors seen as critical to the fight against climate change – among them, energy utilities & power producers, transportation, food & beverage, financial services, and technology – to discuss a series of questions designed to accelerate company movement on this issue...

ICCR members also argue that business plans and policy advocacy necessary to stay within the 1.5°C limit must be developed within a “Just Transition” framework that links support for necessary climate action with commitments to labor standards, human rights, and inclusive growth—with a focus on the workers and communities who contribute to and are affected by the transition...

Said Kate Monahan of Friends Fiduciary, “Too many trade associations, influenced by a subset of their members embedded in the fossil fuel economy, are taking anti-climate positions. These positions are working to the detriment of other members whose operations and supply chains are threatened by the climate crisis. Because trade associations cannot be compelled to disclose their membership or sources of funding, these contradictions are opaque to their own members, investors and society.”

Investors say the goal of the new initiative is two-pronged:

  1. Encourage companies to advance public policies consistent with the goals of the Paris Agreement (net-zero emissions by 2050)...

2. Persuade companies to align their trade association memberships with the goals of the Paris Agreement, by...

The investors argue that corporate lobbying activities, including how membership dues in trade associations are being deployed, can present material financial and reputational risks for companies and their investors. For this reason, oversight of these activities is a critical responsibility of Boards of Directors...