Methodology for Assessing Corporate Influence

The IPCC’s October 2018 Special Report on Global Warming of 1.5° C outlined the urgency to act on climate change and the role of governments in driving this process forward. However, worldwide efforts are lagging on introducing meaningful policy designed to accelerate this transition.

The influence of vested corporate interests is widely understood to play a significant role. A 2020 survey of over 900 climate experts from the IPCC and the United Nations Framework Convention on Climate Change (UNFCCC) found that experts from North America, Europe and Oceania all considered opposition from special interest groups to be the most important obstacle to climate change mitigation2 . The last decade has also documented many examples in the media of corporate influence within climate policy streams, such as the barrage of industry-backed lawsuits that halted the US Clean Power Plan in 2015 to 2016 and the removal of the Australian Carbon Tax in 2014.

Prior to InfluenceMap’s conception in 2015, various studies had identified the significance of corporate policy engagement on climate change. These include:

  • A 2011 paper from Harvard Business School arguing that a broad measure of corporate impact on the climate change agenda should consider the company’s impact on climate policy.3

  • Studies conducted by The Union of Concerned Scientists in 2012 and 2014 which highlighted the role of US corporates4 and their industry groups5 in blocking US climate policy.

  • A 2015 study by the University of Westminster6 that found a core group of EU industry groups to have held key roles in preventing the progression of climate policy in Europe.

The academic literature has further investigated different strands of this issue which includes defining and classifying different strategies and tactics used by companies to influence the climate change public policy agenda.7 Another area of academic enquiry has centered on assessing the impact that certain industry or corporate lobbying campaigns have had. 8

InfluenceMap’s response has been to develop a systematic approach to tracking, assessing and scoring companies and industry groups on their climate policy engagement. The aim has been to produce a detailed analysis of corporate climate policy engagement at the company level. The platform covers nearly 300 of the world’s largest industrial companies and provides a unique insight into the broader corporate climate policy engagement landscape.

This is used to inform the global institutional investor community on how entities are impacting climate change. InfluenceMap is part of the Technical Advisory Group for the Climate Action 100+ investor engagement process made up of 450 investors who collectively manage over $40 trillion in assets. This analysis has featured in over 1,500 media articles, particularly in the financial and business press.

This document summarizes and updates InfluenceMap's methodology for assessing companies and industry groups on their climate policy engagement for the benefit of our users and stakeholders. The InfluenceMap methodology adheres to key features of sound corporate assessment metrics: objectivity, transparency, ease of comprehension and use, and allowing for like-for-like comparisons across and within sectors.

The process is summarized as follows:

2 Kornek, U., et.al (2020). What is important for achieving 2°C? UNFCCC and IPCC expert perceptions on obstacles and response options for climate change mitigation, Environmental Research Letters, Vol 5, No2.

3 Schendler, A. and Toffel, M (2011) What Environmental Ratings Miss.

4 Union of Concerned Scientists (2012) How Corporations Have Influenced the U.S. Dialogue on Climate Science and Policy.

5 Union of Concerned Scientists (2014) Tricks of the Trade: How Companies Anonymously Influence Climate Policy Through Their Business and Industry associations.

6 Fagan-Watson, B., Elliott, B. and Watson, T. (2015) Policy engagement by Industry associations on EU Climate Policy. London University of Westminster.

7 For example; Nyberg, D., Spicer, A., & Wright, C. (2013). Incorporating citizens: corporate political engagement with climate change in Australia. Organization, 20(3), 433-453; Cambridge, MA: MIT Press.; Downie, C. (2017a). Business actors, political resistance, and strategies for policymakers. Energy Policy, 108, 583-592; Skodvin, T., Gullberg, A. T., & Aakre, S. (2010). Target-group influence and political feasibility: the case of climate policy design in Europe. Journal of European Public Policy, 17(6), 854-873.

8 Grasso, M. (2019). Oily politics: A critical assessment of the oil and gas industry’s contribution to climate change. Energy Research & Social Science, 50, 106-115. doi:https://doi.org/10.1016/j.erss.2018.11.017; Sühlsen, K., & Hisschemöller, M. (2014). Lobbying the ‘Energiewende’. Assessing the effectiveness of strategies to promote the renewable energy business in Germany. Energy Policy, 69, 316-325. doi:https://doi.org/10.1016/j.enpol.2014.02.018.

InfluenceMap's Objectives and Role

To independently and objectively assess, score and rank companies on their climate change policy engagement through the detailed inspection of publicly available evidence.

Definitions, Process and Outputs

Definitions & Criteria

Assessment Process

Outputs

Definitions & Criteria

  • Definition of policy engagement
  • Selection of robust and public data sources
  • Defining and categorizing climate policy
  • Scored universe selection
  • Investor expectations
  • Climate policy benchmarks

Assessment Process

  • Matrix-based data platform -The scoring system -Assessment of industry group links -Weightings & algorithms

Outputs

  • Metrics
  • Organizational profiles
  • Scoring details and source documents
  • Investor notes
  • Thematic reports

External Oversight

Evaluation and evolution of our methodology by stakeholders and advisory groups.

Table 1. InfluenceMap’s methodology for assessing companies and industry groups on their climate policy engagement.

Our Advisory Group

We would like to thank the following individuals for their guidance and assistance in evolving our methodology as members of our advisory group:

  • Rachel Ward, Policy Director, the Institutional Investors Group on Climate Change (IIGCC)

  • Bill Weihl, Director, Climate Voices and formerly Director of Sustainability, Facebook

  • Yusuke Matsuo, Institute for Global Environmental Strategies (IGES), Japan

  • Paul Dickinson, Founder and Executive Chair, CDP

  • Daniel Abbasi, Managing Director, Douglass Winthrop Advisors LLC

  • Colin Melvin, Managing Partner, Arkadiko Partners

  • Alice Garton, Director of Strategy, File Foundation

  • The UN's Intergovernmental Panel on Climate Change’s (IPCC) October 2018 Special Report on Global Warming of 1.5° C outlined the urgency to act on climate change and the role of governments in driving this process forward. However, worldwide efforts are lagging on introducing meaningful policy designed to accelerate this transition. A key reason for this gap is opposition by corporate vested interests.

  • InfluenceMap maintains the world's leading platform to track and score companies and industry groups on their climate policy engagement. This analysis informs the global institutional investor community on how entities are impacting climate change.

  • This document summarizes and updates InfluenceMap's methodology for assessing companies and industry groups on their climate policy engagement for the benefit of our users and stakeholders.

  • The methodology adheres to key features of sound corporate assessment metrics: objectivity, transparency, ease of comprehension and use, and allowing for like-for-like comparisons across and within sectors. The system is designed to generate results which are identical and replicable regardless of who engages in the scoring process.

  • The methodology assesses corporate climate policy engagement against external climate benchmarks. These relate to the existing, evolving, and likely future policies and regulations of government bodies mandated to implement the Paris Agreement.

  • This also includes key benchmarks highlighting the increasing specificity of the IPCC on matters that may relate to or impact policy development. These are referred to as Science-Based Policy (SBP) benchmarks.

  • Investor expectation statements are being published in response to the increasing number of companies that are self-assessing and disclosing their climate policy engagements. InfluenceMap uses these to further assess corporate disclosure and governance processes related to direct and indirect climate change policy engagement activities. See examples from the UN PRI and the IIGCC.

  • Assessing corporate performance against SBP and investor expectation benchmarks are new and evolving features of the InfluenceMap system. Stakeholder comments on this and other areas of our processes are being sought before finalization in mid-2020.

2.1 An Evidence-Based Assessment of Corporate Climate Policy Engagement

InfluenceMap scores and ranks companies on their activities influencing climate change policy. The process facilitates the systematic collection and rigorous inspection of data points already in the public domain.9 It does not require additional disclosures from the entities covered or their cooperation.

Academic study has recognized that voluntary disclosures via corporate sustainability reporting can often present a misleading ‘top-line’ or ‘front-stage’ picture of a company’s activities on sensitive issues such as public policy engagement.10 InfluenceMap utilizes a clearly defined range of publicly available data sources to enable deeper investigation of corporate climate policy engagement. The criteria for selecting data sources are that they must exist in the public domain, they must nominally apply to all entities in our scored universe and that they must be reliable representations of corporate activity and behavior.

InfluenceMap’s analysis of an organization relies on hundreds of items of scored evidence taken from these sources that are statistically representative of organizational behavior, making it far more representative than top-line organizational statements. The system generates analysis and metrics which are objective, transparent and allow for like-for-like comparisons between the companies and industry groups being assessed. This provides:

  • A full picture of a company’s behavior towards climate policy, including tracking changes and reforms over time.

  • An insight into the broader corporate and industry landscape on climate change policy engagement by identifying key trends and areas of concern, as well as progress.

InfluenceMap recognizes the limitations of this research that might provide an evidence basis for further study into:

  • Proving the impact that a single company or industry group has had on a particular policy stream.

  • Providing insight into internal corporate decision-making processes and practices that govern climate policy engagement, including an analysis of best-practice in this area

2.2 A Methodology Based on Internationally Recognized Benchmarks and Criteria

InfluenceMap examines the existing, evolving and likely future policies and regulations of government bodies mandated to implement the Paris Agreement. The term “corporate engagement with climate policy” refers to the range of corporate activities defined as engagement by the Guide for Responsible Corporate Engagement in Climate Policy.

InfluenceMap's scoring process is policy neutral. It does not assess the quality of governmental policy implementing the Paris Agreement but rather the positions of companies and industry groups relative to this policy. The policy statements and ambitions from government bodies provide Paris Agreement- aligned benchmarks against which corporate policy engagement is assessed.

The methodology also includes benchmarks highlighting the increasing specificity of the IPCC on matters that may relate to or impact policy development. These are referred to as SBP benchmarks. A more detailed explanation of this benchmarking process is given in Appendix A.

9 InfluenceMap has however engaged with over 100 large corporations and industry groups and detailed feedback methods existing within the InfluenceMap.org portal for submission of comments on the scoring.

10 Cho, C. H., Laine, M., Roberts, R. W., & Rodrigue, M. (2018). The Frontstage and Backstage of Corporate Sustainability Reporting: Evidence from the Arctic National Wildlife Refuge Bill. Journal of Business Ethics, 152 (3), 865-886. doi:10.1007/s10551-016-3375-4

In setting standards for objectivity, reliability and comparability, InfluenceMap strives to remove the subjectivities of the InfluenceMap team, climate advocacy groups and political positions from the process. The system is designed to generate results which are identical and replicable regardless of who is engaged in the scoring process.

2.3 Fact-checking of Corporate Disclosures on Climate Policy Engagement

Higher quality corporate disclosure on climate policy engagement practices has become a key demand of the investment community, with “investor expectations” on this issue emerging from institutional investors and their convenors. InfluenceMap provides an insight into the robustness of corporate direct disclosure on climate policy engagement activities by using investor expectations to structure its assessments.

This section develops the ideas and concepts introduced in the previous chapter to define the main parameters of the research process.

3.1 Definition of Corporate Climate Policy Engagement

Corporate climate policy engagement can be associated with words including “lobbying”, “advocacy” and “political activity” that carry different connotations depending on the context in which they are used. There are two sets of important concepts to consider when defining “corporate climate policy engagement”:

  • Inside vs Outside: Academic literature has highlighted different types of tactic used by companies to influence public policy outcomes.11 “Inside” here refers to efforts to influence policy via explicit interaction with formal policy decision makers (e.g. policymakers and politicians). “Outside” refers to tactics that focus on influencing public opinion as a means towards ensuring certain political and policy outcomes.

  • Direct vs Indirect: This distinction is particular to the entity enacting the climate policy engagement. “Direct” refers to climate policy engagement carried out by the company itself. “Indirect” refers to climate policy engagement carried out on a company’s behalf by third-party groups including industry associations, think-tanks or PR agencies. It is possible that both direct or indirect climate policy engagement may make use of either inside or outside tactics.

To avoid confusion, InfluenceMap relies on the 2013 Guide for Responsible Corporate Engagement in Climate Policy issued by the secretariat of the UNFCCC and the United Nations Environment Programme (UNEP) under the UN's Caring for Climate collaboration of the United Nations Global Compact (UN Global Compact). This document defines a list of corporate activities that constitute corporate climate engagement, covering inside, outside, direct and indirect tactics. These range from advertising, social media, public relations, sponsoring research, direct contact with regulators and elected officials, funding of campaigns and political parties, and participation in policy advisory committees. They are generally coordinated by the regulatory affairs functions within the company but may also rely on PR, communications and marketing/advertising functions. InfluenceMap gathers the output of these activities that refer to climate policy and regulations as and when they are made publicly available.

3.2 Selection of Data Sources

InfluenceMap's methodology looks for evidence of corporate climate policy engagement that is scored against governmental and SBP benchmarks. The criteria for selecting data sources are that they must exist in the public domain, they must nominally apply to all entities in our scored universe and they must be reliable representations of corporate activity and behavior. These are mostly relevant and accessible in the public domain for all large companies and, with the exception of CDP and financial disclosures, for all large industry groups. The methodology divides the data sources into the following categories:

11 For example; Brulle, R. J. (2018). The climate lobby: a sectoral analysis of lobbying spending on climate change in the USA, 2000 to 2016. Climatic Change, 149(3), 289-303; Layzer, J. A. (2007). Deep freeze: How business has shaped the global warming debate in Congress. In M. E. Kraft & S. Kamieniecki (Eds.), Business and Environmental Policy: Corporate Interests in the American Political System (pp. 93-126). Cambridge, MA: MIT Press.

D1: Organizational websites

The main organizational web site of the company and its subsidiaries.

D2: Corporate media

Additional media communications controlled by the organization, including social media channels.

D3: CDP disclosures

Responses to questions within CDP's system (12.3 a & 12.3c) related to climate policy engagement.

D4: Regulatory consultations

Comments on regulatory consultation processes, including those obtained by InfluenceMap through Freedom of Information requests.

D5: Reliable media

Reports of corporate climate policy engagement by well-established media.

D6: Management messaging

Transcripts of statements by key executives of the entity under a variety of circumstances.

D7: Financial disclosures

Submissions by the company to financial regulators.

D8: Advertising New

InfluenceMap is considering an additional data source to track and assess the use of paid-for, targeted climate advertising (e.g. Facebook advertising, advertorials, etc.)

Table 2. The InfluenceMap data sources that are used to define corporate climate policy engagement.

These data sources define the different facets of corporate climate policy engagement overviewed above. For example, regulatory consultations (D4) capture certain ‘internal” lobbying tactics and are a necessary means by which corporates and industry groups communicate positions on policy matters and desired outcomes. These comments are available in the public domain, such as within the regulations.gov portal at the US Federal level. InfluenceMap maintains an active Freedom of Information request process to gain access to others.

Evidence of top management messaging (D6) under a variety of circumstances is indicative of potential efforts to sway policy via high-level communications aimed at key influencers. The use of social media channels (D2) and increasingly paid-for targeted social-media advertising (* new D8) * is a hugely important “external” lobbying tools for companies and their industry groups to capture the public narrative on climate change.

Inconsistencies across the data sources on key climate policy benchmarks can be captured in InfluenceMap's system. Recognition that the full extent of corporate climate policy engagement may not be evident in data sources available in the public domain is reflected in Figure 3.

Figure 1. Iceberg graphic depicting the known and unknown lobbying activities of the corporate sector.

While InfluenceMap's system does not account for hidden and undisclosed information relating to activities such as private meetings and money flows, the system does reveal a reliable account of corporate and industry group behavior based on accessible data points.

3.3 Defining and Categorizing Climate Policy

The UNFCCC process (including IPCC guidance) has triggered climate motivated policy and regulatory processes from government regulators. The Paris Agreement commits signatories to produce Nationally Determined Contributions (NDCs), whereby nations outline their implementation plans to meet its goals. InfluenceMap's system considers existing, evolving and likely future policy measures issued by mandated bodies. "Mandated bodies" are defined here as various levels of government or government-authorized bodies that are currently tasked with NDC implementation in their regions.

Climate Sub-issue (or Query)

Description

Q1: Climate Science Transparency

Transparency around climate change science.

Q2: Climate Science Stance

Position on the needed response to climate change science

Q3: Need for Climate Regulation

Support for regulations to tackle climate change in general.

Q4: The Paris Agreement

Support for the UN Treaty on Climate Change.

Q5: Transparency on Legislation

Transparency on positions on climate policy/legislations.

Q6: Carbon Tax

Support for policies/regulation on this topic.

Q7: Emissions Trading

Support for policies/regulation on this topic.

Q8: Energy Efficiency Standards

Support for policies/regulation on this topic.

Q9: Renewable Energy Legislation

Support for policies/regulation on this topic.

Q10: Energy Policy and Mix

Support for policies/regulation on this topic.

Q11: GHG Emissions Standards

Support for policies/regulation on this topic.

Q12: Relationships

Transparency on industry and policy engagement group relationships.

Table 3. The subcategories of the climate policy engagement agenda that InfluenceMap has broken down into queries.

These measures cover high-level statements of intent through to detailed and prescriptive legislation, including setting targets and implementing standards, fiscal interventions and other binding regulatory requirements. Climate considerations also increasingly impact on non-climate motivated policy streams, such as building codes, land use and fiscal regulations. The climate components of these policies fall under InfluenceMap’s definition of Climate Policy.

InfluenceMap breaks down the climate policy engagement agenda into a series of subcategories that are referred to as "queries" (Q1-Q12). The evidence gathering and analysis in response to these queries builds a full picture of corporate interaction across the climate policy agenda.

Q1-4 and Q6-11 identify a company’s actual engagement with climate policy. Q1-Q4 relate to high-level climate policy issues while Q6-Q11 relate to legislative and regulatory strand categories that may be present at a regional-level. For example, Q6 as the Carbon Tax query would archive corporate engagement with global carbon taxation regulatory strands. Q1-Q11 related evidence pieces are scored against benchmarks related to the Paris Agreement and its implementation by nations. InfluenceMap has devised Government-related policy benchmarks and Science-Based Policy Benchmarks (SBP), which are described in detail in Appendix A.

Two additional queries (Q5 and Q12) are then used to test the clarity, accuracy and scope of corporate governance and disclosures on their climate policy engagement activities. These queries are benchmarked against investor expectations as detailed above.

3.4 Investor Expectations on Corporate Climate Policy Engagement

Shareholders are highly concerned about negative corporate climate policy engagement within their portfolios. This covers both policy engagement by companies and those of external bodies, such as industry groups representing companies in different jurisdictions. It has led to an increase in shareholder pressure on corporate management to address this issue. These investors are often long-term, ‘universal’ holders of the entire market who are concerned with the impact that delays to climate policy will have on the wider economy. The lack of transparency surrounding corporate climate policy engagement may also be obscuring corporate strategy on the energy transition, exposing investors with a range of time horizons to significant regulatory risk. Engagement with corporate climate policy engagement is now a strategic element within the framework of the Climate Action 100+ investor engagement process made up of 450 investors who collectively manage over $40 trillion in assets. Similar engagement is likely to extend into the corporate sector.

The Europe-based Institutional Investors Group on Climate Change (IIGCC) and the United Nations-supported Principles for Responsible Investment (PRI) network have set out expectations stating how companies should manage their climate policy engagement processes.

These documents broadly outline the need for companies to:

  • Paris-Aligned Policy: To adopt climate policy positions in line with the Paris Agreement and to engage with climate policy and regulations accordingly.

  • Governance: To ensure good governance of climate policy engagement, such as board oversight, auditing of climate policy engagement activities and industry group links, as well as consistent policy engagement with corporate climate goals.

  • Misalignments: To correct any misalignments between policy engagement and corporate goals, such as industry group disconnects, in a timely and transparent manner.

  • Disclosure: To ensure full transparency regarding climate change policy, policy engagement, industry groups, misalignments and any remedial plans.

An increasing number of companies now self-assess and disclose their climate policy engagements as a result of this pressure. InfluenceMap relies on the structure of investor expectations to provide a unique perspective into the robustness of these disclosures. Full Details of the overall assessment method are in Appendix B. A new, investor-backed research and consultation process is now underway in Europe to consolidate the various communications from investors on corporate climate lobbying into an authoritative, best-practice framework. InfluenceMap will continue to review its methodology in-line with the developing investor-consensus on this Issue.

3.5 Scored Universe Selection

As of June 2020, InfluenceMap's corporate climate policy engagement process covers around 250 industrial companies and around 100 leading industry groups, while also tracking the links between the two. It has been necessary to select the entire population of entities in advance and to avoid "cherry picking" which would result in an inability to compare in a like-for-like manner.

The system prioritizes the largest companies as measured by the Forbes Global 2000 process which aggregates a range of indicators relevant to economic size and political influence. An assessment of the entire corporate universe is not yet possible with there being, for example, more than 1,600 companies in the MSCI World Index. Based on the results of this scoring and on user need, companies within sectors most heavily engaged in climate policy are also included which are oil, gas, coal, power, shipping and aviation, automotive and energy intensive manufacturing. InfluenceMap also carries out assessments based on more specific groups of entities, such as scoring the leading companies in a particular region or sector, with careful attention being paid to selection based on economic size as an initial criterion.

As explained above, the academic literature has highlighted the role of direct and indirect corporate climate policy engagement. Indeed, the role of industry groups and other corporate representatives in the climate policy engagement process are a key issue for InfluenceMap’s users.

InfluenceMap captures the additional influence that companies have via third- party groups where possible. This analysis currently focuses on the role of industry groups for the following reasons:

  • InfluenceMap’s analysis is focused at the company level and only captures third-party groups where their relationships with companies can be accurately and consistently tracked. While this is the case for most industry groups, many professional policy engagement consultancies and think-tanks exist under limited disclosure regimes which restrict such an analysis.

  • Industry policy engagement groups act on behalf of entire sectors, or in some cases entire economies. They therefore have particular leverage to impact the passage of climate policy in the regions in which they operate. InfluenceMap’s analysis of these groups found them to be largely opposed to the Paris Agreement and so represent one of the most significant blockages to its implementation.

In selecting the scoring universe for industry groups, the following criteria are used:

  • The Relative Ranking of an industry group is an estimation of the power it has in its jurisdiction, such as in the US, the EU, Japan or at the international level. This is assessed with reference to the size of the group, and the size and importance of the companies or sectors that it is mandated to speak for. This is done by surveying and aggregating the opinions of businesspeople, policy makers and civil society groups familiar with the jurisdiction and the group’s political influence.

  • The Jurisdiction Weighting accounts for the size of the economy, and the contribution of the industry group’s jurisdiction to global greenhouse gas emissions and exported fossil fuels.

A group of around 100 industry groups are updated and additional ones are added to the InfluenceMap system based on these factors.

InfluenceMap refers to industry groups, business federations and other similar groups representing corporate interests as "influencers". This category will be expanded upon when enhanced data-collection techniques and disclosure regimes enable a rigorous and consistent approach to tracking links between companies and other types of third-party policy engagement groups.

4.1 Matrix Based Data Platform

The following section describes the practical details of the assessment process and its implementation.

InfluenceMap sources, scores and archives large volumes of data in PDF documents, text comments and links to external URLs. As of April 2020, the system has archived over 200,000 evidence pieces online. Bespoke software has been designed based on a MySQL database system with both operator content management systems (CMS) and user-friendly displays to communicate the results.

Unilever’s profile shown in Figure 2 provides an example of both the CMS and user displays for an identical part of the platform. It shows the matrix feature of the assessment software that allows for efficient archiving and clear communication of large amounts of data.

Public-facing display of Unilever

CMS display of Unilever

Figure 2. The public-facing and CMS displays of Unilever’s profiles on the InfluenceMap site.

The matrix in the public facing graphic splits the climate agenda into InfluenceMap’s queries in the far-left column, with the data sources labelled along the top row. The scores within the table hyperlink to archived evidence pieces and scoring details that are set out hierarchically. The ‘Summary of InfluenceMap Scoring’ explains the entity's score and the resulting high metrics are noted under ‘InfluenceMap Score’ in the top left corner of the page.

This matrix structure and hierarchical organization of data allows for a flexible and scalable platform, making the information clearly available for a range of users.

4.2 The Scoring System

American Petroleum Institute’s profile shown in Figure 3 provides an example of an InfluenceMap scoring matrix in detail.

Figure 3. An example of InfluenceMap’s scoring matrix using American Petroleum Institute’s profile as an example.

Each cell in the matrix holds evidence of corporate policy engagement gathered from the chosen data source that is relevant to its identified query. Each cell holds up to 10-20 evidence items.

InfluenceMap’s analysis of an organization relies on hundreds of items of scored evidence taken from these sources that are statistically representative of organizational behavior, making it far more representative than ‘top-line’ organizational statements.

Each piece of evidence is analyzed by InfluenceMap’s team to determine the company’s level of support or opposition to the relevant strand of climate policy. To ensure objectivity and consistency, this assessment is carried out in line with a strict framework of benchmarks (see Appendix A for examples of scoring against policy benchmarks). The system also captures data points relating to each piece of evidence that covers information such as date, region and specific legislation.

Figure 4 shows the inside of a cell within the matrix of the American Petroleum Institute’s profile. Each cell in the matrix has its own score which is computed from the evidence contained within it and is weighted for factors such as the date and significance of the evidence. Public users may view this cell by clicking on the relevant matrix cell online.

Figure 4. A detailed view of the public-facing display of the cell content within American Petroleum Institute’s matrix.

Weblinks to the evidence source are provided in the bottom left of the screen, as well as time-stamped downloaded PDF files in case the page has been removed. "Extract from Source" gives an exact quote from the document that InfluenceMap is scoring, with “InfluenceMap Comment” giving a human-generated comment above it.

Figure 5. The CMS display of the intermediate tags and metrics within a cell in American Petroleum Institute’s profile.

The range of tags and "intermediate metrics" (metrics used by InfluenceMap to calculate the entity’s final top-line metrics) can be seen by switching to the operator CMS screen view of this same matrix cell.

The following intermediate tags and metrics are recorded by the process:

  • Score assesses the evidence relative to InfluenceMap’s benchmarks. It does so on a numerical five-point scale ranging from + 2 to -2 which descends from ‘strongly supporting’, ‘supporting’, ‘no position/mixed position’, ‘not supporting’ or ‘opposing’ the policy strand in question. Real world scoring examples can be found in Appendix B.

  • Importance assesses the significance of the evidence piece relative to others in the cell on a 0 to 10 scale.

  • Flag or Star tags positive and negative evidence pieces of high significance to the system’s users. These appear in the user interface as red or blue cells (there are three in the American Petroleum Institute's matrix above).

  • Region, law and year are three tags that allow the dataset to be analyzed from various angles, such as variation over time and regional or policy deep dives.

  • Cell Score is an intermediate metric that is based on the individual scores of the evidence pieces in the cell, their importance and their year. Older evidence pieces carry less weight in the system, and so only those from the last two years contribute to the current cell score. Other evidence pieces remain archived for context.

The InfluenceMap system contains a large amount of data in the form of archived documents, textual commentary and tags/assessed metrics that are available across the corporate sector. This level of complexity is necessary to arrive at meaningful top-line metrics and narrative assessments for each company and industry group. Full transparency is given on how the system arrives at these top-line metrics.

4.3 Assessment of Industry Group Links

InfluenceMap maintains a database of over 100 industry groups, federations and advocacy groups (collectively referred to as "influencers'' in the system) which are scored in the same way as companies. A key innovation of InfluenceMap's system is to track links between the two groups via their direct disclosures. Figure 6 shows ExxonMobil’s profile with the "Details of Relationship Score" tab selected.

Figure 6. An example of the “Details of Relationship” tab using ExxonMobil’s profile.

This shows an output of the database of relationships between companies and their key industry groups. This database is updated on a continuous basis by InfluenceMap. The top-line metric for each company is captured based on its own policy engagement ("Organization Score") and separately for the aggregate of its industry groups ("Relationship Score"). Misalignments can then clearly be seen. To capture the nuances that exist within the Relationship Score, InfluenceMap uses two further intermediate metrics related to the company- industry group linkage:

  • Relationship Strength between companies and industry groups on a 1-10 scale from weak to strong. For consistency, InfluenceMap has devised precise guidelines on how to rate the strength of a variety of relationships.

  • Relative Ranking of an industry group is an estimation on a 0-10 scale of the power it has in its jurisdiction, such as in the US, the EU, Japan or at the international level. This is assessed with reference to the size of the group and the size and importance of the companies or sectors that it is mandated to speak for. This is done by surveying and aggregating the opinions of businesspeople, policy makers and civil society groups familiar with the jurisdiction and the group’s political influence.

To ensure complete transparency, the Relationship Scores for all links that a company has with its industry groups are available for users to view via a simple light box display over the profile page as shown in Figure 7.

Figure 7. The light box in ExxonMobil’s profile that outlines the Relationships Scores for all links that it has with its industry groups.

4.4 Weightings and Algorithms

The previous section outlined how intermediate metrics are arrived at for evidence pieces, industry groups and company-industry group linkages. This transparent system is designed to generate results which are identical and replicable regardless of who is engaged in the scoring process. The following are the key intermediate metrics that are used to compute the final top-line metrics:

  • Cell Scores for the matrices of company and industry groups.

  • Relationship Strengths for the links between companies and industry groups.

  • Relative Rankings of the industry groups that a company is linked to.

This is done by applying weightings to the cells in the matrices to recognize the relative importance of the data sources and queries and to allow for sector variation. For example, the automotive sector will have a stronger weighting assigned to Q11/GHG Emissions Standards as this category includes vehicle emissions standards.

To achieve this, an algorithm is used to assign weightings to the individual cells based on stakeholder and advisory group consultations. The data sources are weighted first which is automatically followed by the weighting of the queries. The terms NS and NA seen in the table below refer to "Not Scored" and "Not Applicable" respectively. Not Scored is given when no evidence is found for that cell. Not Applicable is given when certain data sources do not apply, such as when industry groups do not disclose to CDP or financial regulators. When NS and NA can be applied to one cell, the weighting for that cell is redistributed equally by the algorithm among the remaining cells in that query. The weightings then always total to 100% and the lack of information or non-relevance of the data source has no net impact on the organization's top- line metrics.

Query/ Data Source

D1

D2

D3

.................

D8

Q1

a%

b%

c%

.................

v%

subtotal %

Q2

d%

NS

f%

.................

x%

subtotal %

Q3

g%

h%

NA

.................

y%

subtotal %

..............

.................

.................

.................

.................

.................

.................

Q12

j%

k%

l%

.................

z%

subtotal %

subtotal %

subtotal %

subtotal %

.................

subtotal %

Total 100%

Table 4. The table shows the weightings in the scoring matrix

InfluenceMap recognizes that different users have varying needs in terms of levels of detail required. The system is designed for a variety of user needs in a single, interconnected platform. The contents are presented in the form of metrics, narrative text, investor notes and thematic reports.

5.1 Metrics

Table 5 shows the top-line numerical metrics generated by the system for each organization:

Metric

Computation

Description and Implication

Organization Score (0-100), OS. Applies to all organizations.

Weighted average of the Cell Scores normalized on a 0-100 scale.

A measure of an organization’s engagement with policy against benchmarks noted in Appendix A. Above 75 indicates support, below 50 indicates increasing opposition towards 0.

Engagement Intensity (0-100), EI. Applies to all organizations.

Number and spread of evidence pieces across the matrix weighted by key indicators that demonstrate how relevant each evidence piece is (e.g. age of evidence piece)

A measure of the level of policy engagement ranging from positive to negative. Above 12 indicates active engagement, above 25 indicates highly active or strategic engagement. Below 12 indicates relatively limited engagement.

Relationship Score (0-100), RS. Applies only to companies.

Average of the OS of industry groups weighted by Relationship Strength.

A measure of corporate industry groups’ climate policy engagement. Above 75 indicates broad support, below 50 indicates increasing opposition towards 0.

Performance Band (A+ through F). Applies only to companies.

OS combined with RS weighted for number of influencers and the Relative Ranking of each.

A full measure of a company’s climate policy engagement accounting for both its and its own industry groups’ activity on an A through to F scale (A+ = support, F=opposition).

Disclosure Score - Corporate policy engagement positions (0-100).

See Appendix B for details.

InfluenceMap assesses the quality of corporate disclosures on their climate policy engagement governance and performance.

Disclosure Score - Industry Group Relationships (0-100). Applies only to companies.

See Appendix B for details.

InfluenceMap assesses the quality of corporate disclosures on their climate policy engagement governance and performance.

Table 5. The top-line numerical metrics generated by the InfluenceMap system for each organization.

The Performance Bands shown in Figure 8 relate to a 0 to 100 scale and are linked to color coding frequently used within the InfluenceMap portal and publications.

Figure 8. The color coding used to show the Performance Bands of companies on their InfluenceMap profile.

5.2 Organizational Profiles, Investor Notes and Reports

The metrics above combine to provide an accurate picture of the organization's behavior towards Paris-aligned climate policy. Users can navigate InfluenceMap’s portal to explore why an organization has been assessed in a certain way. Unilever’s profile provides an example where toggling between Organization Score and Relationship Score offers full details and documentation on how these metrics are determined.

InfluenceMap also generates brief narrative summaries and more detailed notes for each organization designed for engaging with the companies or industry groups concerned. Institutional investors who use InfluenceMap’s content for engagement activities find these to be particularly useful. The narrative profiles can be found on each organization’s profile page and contain hyperlinks to evidence pieces in its scoring matrix.

Unilever appears to actively support multiple strands of climate change- related regulations and policies.

  • Former CEO Paul Polman has been a notable supporter of climate legislation and has frequently supported ambition towards the UN treaty on climate change.

  • Paul Polman signed a Mission 20:20 statement in 2017 calling for immediate action on transitioning the global energy mix, including phasing out coal and implementing a large uptake in electric vehicles.

  • In the same year, Unilever became a signatory to the 'We Are Still In’ initiative that supports leadership within the US on accelerating a clean energy transition.

  • The company has actively supported legislative measures to drive an energy transition in the UK and Canada .

  • Unilever supported a higher renewable energy target of 35% across Europe in 2017 and called on policymakers to support measures such as corporate renewable PPAs to ensure that this ambition is met.

  • Unilever appears to support a price on carbon, including progressive reform of the European emissions trading scheme.

  • In 2018, Unilever supported a proposed carbon tax policy in the US, although seemingly over “less efficient regulations” such as the US Clean Power Plan.

  • Unilever called for ambitious CO2 targets for heavy-duty vehicles in Europe during the same year.

  • Unilever's current CEO Alan Jope wrote an open letter in 2019 to the company's industry groups asking them to confirm alignment of their climate positions with those of Unilever and the 1.5-degree ambition set out in the Paris Agreement.

Public facing profiles of companies and industry groups assessed by InfluenceMap as shown in Figure 9 can be found here .

Figure 9. An example of the investor notes on Daimler’s profile from late 2018.

InfluenceMap regularly publishes reports on themes around climate policy engagement by sector, country and policy. The website contains an overall account of this and a full list of downloadable reports.

Figure 10. InfluenceMap frequently uses this quadrant chart to measure support for climate policy against Policy Engagement Intensity.

InfluenceMap uses the quadrant chart shown in Figure 10 to communicate results for the corporate sector. Performance Band is plotted along the horizontal axis from F through to A+ against Policy Engagement Intensity along the vertical axis.

A company with a Performance Band towards F and a high Policy Engagement Intensity actively opposes climate policy and can be found in the upper left quadrant. The companies in the upper right quadrant are active advocates for more ambitious climate policy. The companies in the lower quadrants are in between these extremes and are largely inactive when it comes to meaningful climate policy engagement.

The following defines terms used in this document and the InfluenceMap system. They are presented in alphabetical order.

Data Sources

InfluenceMap's methodology looks for evidence of corporate engagement with climate policy from various data sources. There are seven data sources at present: D1/Organizational websites; D2/Social media; D3/CDP disclosures; D4/Regulatory consultations; D5/Reliable media; D6/Management messaging; D7/Financial disclosure.

Corporate Climate Policy Engagement

In 2013, the UN issued the Guide for Responsible Corporate Engagement in Climate Policy which defines a range of corporate activities as engagement. They range from advertising, social media, public relations, sponsoring research, direct contact with regulators and elected officials, funding of campaigns and political parties and participation in policy advisory committees.

Governmental Policy Benchmarks

InfluenceMap considers existing, evolving and likely future policy measures issued by mandated bodies that are motivated by the UNFCCC processes, such as the Paris Agreement and the IPCC. These measures cover high-level statements of intent through to detailed and prescriptive legislation, including setting targets and implementing standards, fiscal interventions and other binding regulatory requirements.

Investor Expectations on Corporate Climate Policy Engagement

Various investor representatives (UN PRI, IIGCC) have set out expectations on how companies should manage their climate policy engagement processes. The investor focus has fallen on broader governance and disclosures of the issue. InfluenceMap relies on the structure of investor expectations to assess the corporate policy engagement processes and disclosures themselves.

Mandated Bodies

Mandated bodies are defined as various levels of government or government- authorized bodies currently tasked with NDC implementation in their regions. As of April 2020, InfluenceMap does not consider the US Federal Government as a mandated body as it has rejected the Paris Agreement. It does consider various US state-level bodies who have articulated their intention to remain in the Paris Agreement, such as the State of California.

Queries

InfluenceMap breaks down the climate policy engagement agenda into a series of subcategories that are referred to as "queries" (Q1-Q13). Q1-4 and Q6-Q11 relate to governmental and SBP benchmarks. Q1-Q4 relate to high-level climate policy issues while Q6-Q11 relate to legislative and regulatory strand categories which may be present at a regional-level. Q5 and Q12 are two additional queries relating to corporate governance and disclosures on their climate policy engagement activities.

Science Based Policy Benchmarks

The IPCC’s 2018 Special Report on Global Warming of 1.5°C outlined future pathways for issues that overlap with and impact the climate policy agenda. These include the energy mix, a price on carbon, required uptake of renewable energy and electric vehicles, and the viability of negative emission technologies like carbon capture and storage. InfluenceMap has assessed the IPCC's guidance and has condensed it into "Science Based Policy” (SBP) benchmarks against which corporate positions are scored.

Engagement Intensity (0-100)

A measure of policy engagement levels. Above 12 indicates active engagement, above 25 indicates highly active or strategic engagement. Below 12 indicates relatively limited engagement. This applies to all organizations.

Influencer

A term used to cover third-party groups that companies use to engage with policy. These include industry groups, federations, the Chambers of Commerce and corporate advocacy groups.

Organization Score (0-100)

A measure of an organization's policy engagement against Climate Policy benchmarks noted in Appendix A. Above 75 indicates support, below 50 indicates increasing opposition. This applies to all organizations.

Performance Band (A+ - F)

A measure of a companies’ climate policy engagement that accounts for both its and its own industry groups' activity on an A+ through to F scale (A+ = support, F = opposition). This only applies to companies.

Relationship Score (0-100)

A measure of a corporate industry groups’ climate policy engagement. Above 75 indicates broad support, below 50 indicates increasing opposition. This only applies to companies.

Relationship Strength (0-10)

A measure of the relationship that industry groups have with their corporate members on a scale of 0 to 10. For example, an industry group may have 2000 member companies with 10 being on its executive committee. The 10 executive committee members would be scored as 8 compared to 3 for the regular members. A smaller industry group where a key corporate executive serves as Chair of the industry group will be given a Relationship Strength score closer to 10.

Relative Ranking of an Industry Group (0-10)

The relative ranking of an industry group on a scale of 0-10 estimates the power that the group has in its jurisdiction, such as in the US, the EU, Japan or at the international level. This is assessed with reference to the size of the group and the size and importance of the companies or sectors that it is mandated to speak for.

Table 6. The glossary of InfluenceMap terms.

A.1 Introduction

The main body of this report details InfluenceMap’s processes for assessing corporates on their climate change policy engagement activities and disclosures. To remove subjectivity and value-judgements, all evaluations made under InfluenceMap’s system are done according to strict processes comparing the subject matter to external standards. InfluenceMap refers to this process as “benchmarking”.

Different benchmarks are used across the InfluenceMap system. Table 7 breaks this down with reference to the climate policy subcategorizations or “queries” introduced in Chapter 3. This appendix addresses the benchmarks used or proposed to assess actual corporate climate policy engagement activities (Q1-4 and Q6-11). Appendix B details the benchmarks used for assessing direct corporate disclosure and governance of their climate lobbying activities (Q5 and Q12).

Query

Benchmark Type

Description of Benchmark

Q1: Transparency around climate change science

Science-based

The scientific consensus on climate science as described by the IPCC.

Q2: Position on the response to climate science

Government Policy

High-level government climate ambitions and commitments.

Q3: Support for regulations to tackle climate change in general

Government Policy

Government commitments to address climate change via policy and regulation.

Q4: Support for the UN treaty on climate change

Government Policy

The 2015 UNFCCC Paris Agreement.

Q5: Transparency on positions on climate policy/legislations

Investor Expectations

Investor expectations as communicated by groups including IIGCC, UN PRI and CERES.

Q6: Support for carbon tax policy

Government Policy

Government statements on carbon tax policy.

Q7: Support for emissions trading policy

Government Policy

Government statements on emissions trading policy.

Q8: Support for energy efficiency targets/standards

Government Policy

Government statements on energy efficiency targets/standards.

Q9: Support for renewable energy legislation

Government Policy

Government statements on renewable energy legislation.

Q10: Support for policy to transition the energy mix

Government Policy

Government statements on transition of the energy mix.

Q11: GHG emissions standards/targets

Government Policy

Government statements on GHG emissions standards/targets.

Q12: Transparency on lobby group relationships

Investor Expectations

Investor expectations as communicated by groups including IIGCC, UN PRI and CERES.

Table 7. Descriptions of the InfluenceMap subcategorizations broken down into queries.

A.2 Scoring corporate lobbying against benchmarks

InfluenceMap assesses each item of evidence against a company’s engagement with climate change policy to determine levels of support or opposition. This relies on a systematized process of discourse analysis12 that results in each evidence piece being coded as: ‘Strongly supporting’; ‘Supporting’; ‘No position/Mixed position’; ‘Not supporting’; or ‘Opposing’. These codes correspond to a numerical five-point scale between +2 and -2, where +2 indicates full support for Paris and IPCC-aligned policy and -2 indicates active opposition. Using a five-point scale enables a more nuanced analysis of the grey-areas within corporate positioning on climate policy. To determine how an evidence piece is coded, InfluenceMap uses benchmarks against which evidence of corporate policy engagement is compared. The level of support or opposition is thus determined by the extent to which there is alignment between the corporate’s position and the benchmark.

A.3 Governmental Policy Benchmarks

As shown in the table above, InfluenceMap’s system for scoring climate policy engagement activities primarily relies on Governmental Policy benchmarks which are drawn from the statements and ambitions of governmental bodies mandated to implement the Paris Agreement. It should be noted that Q1, which specifically assesses the extent to which a company is transparently communicating on the science of climate change, relies on the reporting and guidance of the IPCC.

Governmental Policy benchmarks are chosen with respect to the content and context of the evidence item being examined. For example, if a company is communicating on the Cap and Trade system in California, the statements and ambitions of the Californian Air Resources Board would be used as the benchmark to score this evidence. This process therefore relies on what the closest applicable governmental climate authority has said about the policy in question. Two important factors must be accounted for in the benchmark selection process:

  • The statements must best reflect the government bodies’ original intent with regards to a specific policy that were likely communicated at the start of the policy-making process. This mitigates against using benchmarks that have already been influenced by corporate lobbying.

  • Statements from governments (or government bodies) that have clearly rejected the goals of the Paris Agreement are excluded, such as the current US EPA. In such a case and if possible, we revert to a time when the government bodies did accept the Paris Agreement (e.g. the US EPA prior to 2016), or we draw from the nearest applicable authority. An example of this might be a state-based climate regulator such as The California Air Resources Board.

Table 8 illustrates how this system works using the example of the US CO2 Vehicles Standards. Table 9 lists some other examples of key policy benchmarks used to assess company climate policy engagement along with evidence pieces.

12 Tannen et al., 2015

Policy Benchmark

Score

Lobbying Example

In 2012, the US EPA set rising GHG emissions standards for vehicles up to 2025. Upon review in 2016, the EPA determined that these standards remained appropriate. Despite the US EPA reopening the review in 2017 and subsequently moving to weaken the standards, the Californian Air Resources Board deemed no change was needed in 2018.

+2

Company is actively supporting original US GHG standards or has alternatively called for more stringent regulation.

+1

Company has stated support for standards.

0

Unclear: The company appears supportive of the standards, but it is unclear from the evidence if this includes agreed level of stringency.

-1

Company appears to be arguing that stringency of US GHG emission standards needs to be loosened.

-2

Company opposes the standards or is actively lobbying for them to be weakened.

Table 8. An InfluenceMap Governmental Policy Benchmark used to score the US CO2 Vehicle Standards.

Query

Examples

Lobbying Example

Q6 – Carbon Tax policy

South Africa Carbon Tax, proposed as part of The National Climate Change Response White Paper (NCCRP) .

In 2015, the Minerals Council of South Africa arguing that the carbon tax is “unnecessary and premature” (Opposing, - 2).

German national carbon tax for non-EU ETS sectors, proposed as part of the federal Climate Change Act.

The Federation of German Industries (BDI) has stated that the introduction of a national CO2 price is "conceivable and doable" if it does not harm the international competitiveness of German businesses (Mixed support, 0).

Q7 – Emissions Trading Policy

The EU emissions trading system, along with GHG emission reductions targets set under the 2030 climate and energy framework.

Shell has stated support for the EU ETS (Support, 1).

An Emissions Trading Scheme in Japan as proposed by The Ministry of Environment.

Japan Business Federation (Keidanren) is opposed to emissions trading, arguing that it will see “a decline in economic activity and international competitiveness” (Opposing, - 2).

Q8 - Energy Efficiency targets or standards

The EU 2030 energy efficiency target of at least 32.5%.

Unilever has called for a binding 40% energy efficiency target in Europe by 2030 (Strong support, 2+).

US Corporate Average Fuel Economy (CAFE) Standards (see above).

In 2017, Ford stated its support for annually increasing CAFE standards, but argued that the stringency of the program should be loosened (Not supporting, -1).

Q9 - Renewable Energy Legislation

Renewable energy targets in Victoria, Australia. Proposed as part of Victoria’s Renewable Energy Roadmap (2015) and was subsequently updated.

In 2017, BHP called for a repeal of state-based Australian renewables targets (Opposing, - 2).

Apple has advocated in support of further policy options to encourage corporate use of renewable energy in Japan (Strong support, 2+).

Q10 – Energy Mix Policy

Coal-phase out in Germany.

RWE criticized German plans to phase out coal fired power stations by 2038 as “clearly too early” (Opposing, - 2).

US President Obama’s permanent ban on Arctic and Atlantic Ocean oil and gas leasing.

The American Petroleum Institute called for the repeal of this decision (Opposing, - 2).

Q11-GHG Emissions Standards

In 2018, Canadian Association of Petroleum Producers called on the Canadian government to limit the scope of the Clean Fuel Standards by exempting the upstream oil and natural gas sector. (Not supporting, -1).

EU CO http://imd.crimmond-associates.co.uk/evoke/2 emission targets for light-duty and heavy-duty vehicles.

Daimler suggested that proposals to increase CO2 targets for trucks are not feasible (Not supporting, -1).

Table 9. Examples of InfluenceMap’s policy benchmarks used to assess company climate policy engagement along with evidence pieces.

A.4 Science Based Policy (SBP) benchmarks

InfluenceMap’s Governmental Policy Benchmarks are founded in their “policy neutrality”. This means that the system does not evaluate the quality of governmental policy measures, but instead rests on the assumption that the policy proposals and ambitions from government bodies mandated to implement the Paris Agreement constitute the most authoritative, real-world set of standards for benchmarking corporate policy engagement.

The Paris Agreement commits signatories to emission reductions consistent with a world well-below 2°C and to pursue efforts to limit temperature increase to 1.5°C. However, as was highlighted in the IPCC’s special report on Global Warming of 1.5°C in October 2018 and again in the November http://imd.crimmond-associates.co.uk/evoke/2019 UNEP's Emissions Gap Report, countries are falling short of these goals. This highlights a gap between InfluenceMap’s analysis using Governmental Policy Benchmarks and actual Paris-Aligned climate change lobbying.

The IPCC’s October 2018 Special Report on Global Warming of 1.5° C advises on the need for “stringent and integrated policy interventions” in order to achieve 1.5 °C mitigation pathways. The report provides detailed and policy orientated information on various issues such as the energy mix, a price on carbon, required uptake of renewable energy and electric vehicles, and the viability of negative emission technologies like carbon capture and storage. To help account for the gap identified above, InfluenceMap will be supplementing its Governmental Policy Benchmarks with SBP Benchmarks derived from this report.

In doing so, it is important for InfluenceMap to avoid inadvertent and premature judgements of governmental climate-motivated policy streams, which in many areas are still evolving, and which must account for a range of political and economic conditions.

The application of these benchmarks will therefore focus on:

  • Corporate engagement with broader climate and energy policy issues that is not directly relevant to a specific item of current, climate-focused governmental policy or regulation, such as corporate advocacy on the role and importance of different energy types in the future energy mix. InfluenceMap considers this form of corporate and industry influencing to be systemically important in the broader process of setting government policy priorities on climate and energy.

  • Engagement with specific policy and regulatory streams emanating from governmental bodies that have rejected the Paris Agreement, such as Environmental Protection Agency at the US Federal level as of November 2019.

A.5 Using the IPCC's Guidance as a basis for Climate Policy Benchmarks

At COP21 in 2015, the International Panel on Climate Change (IPCC) was invited by the UNFCCC to produce the Special Report on Global Warming of 1.5° C to support the adoption of the Paris Agreement. Its aim was to present global greenhouse gas (GHG) emission reduction pathways consistent with meeting the Paris Agreement’s aims of “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels”, while also achieving sustainable development. The 2018 report overviews a set of potential pathways and systematic transition options that could lead to a transformation of the global energy system in line with the 1.5°C goal. Building on the remit of previous studies by the IPCC, the report was specifically designed to give policymakers the information needed to tackle climate change while also considering regional and socioeconomic contexts.

The report concludes that “robust, stringent and urgent transformative policy interventions” are needed to achieve systematic change, entailing radically different conditions under which companies will have to operate and sell their products. The IPCC provides a framework for understanding 1.5°C-aligned policy positions through its assessment of the role of various energy sources, technologies and policy options across the different 1.5°C mitigation pathways (Chapter 2), as well as its further discussion of the feasibility of the mitigation options available for energy, transport and industrial system transformations (Chapter 4). InfluenceMap proposes that, from these science- based assessments, a new series of benchmarks can be developed to assess “science-based” corporate climate policy engagement.

As there is a multitude of potential and sometimes competing pathways for addressing climate change, the IPCC use Integrated Assessment Models (IAMs) to assess the technological, socio-economic and political feasibility of the different GHG emission reduction options. In their 2018 report, the IPCC used IAMs to explore the different decarbonization pathways available to stay within a 1.5°C or 2.0°C warming scenario. It covers 90 pathways consistent with 1.5°C warming and 132 pathways consistent with 2.0°C warming. The findings presented in the 1.5°C Special Report are based on analysis of this ensemble. The results of an IAM are highly dependent on the assumptions built into the code, such as the assumed relationship between population growth on food demand and GDP increases in diet.

Most IAMs tend towards the goal of minimizing economic costs of achieving mitigation outcomes and are thus designed to be used to inform policymaking processes through testing the implications of different policy decisions. While an individual IAM modelling approach does not lend itself to inform a specific course of action or to follow a mitigation pathway, consensus can be found through the areas of agreement in the results of the overall IAM ensemble. This consensus driven approach produces the key findings present in the 1.5°C Special Report on a range of climate policy issues including carbon taxes, energy efficiency and the role of different energy types that can be used to inform policymaking. The IPCC’s analysis of these climate policy issues covers not only the hypothetical climate contribution of different energy types, technologies and policy pathways, but also includes analysis of the technical, political and economic feasibility challenges associated with these options. InfluenceMap’s use of the IPCC’s 1.5°C Special Report is designed to consider both aspects of this analysis.

InfluenceMap’s process for deriving scoring benchmarks from the IPCC’s Special Report on 1.5°C warming therefore relies on the following principles:

  • Policy guidance statements within the IPCC report that are associated with the greatest confidence and backed by the most evidence are relied on the most. Corporate or industry group alignment or contradiction to these statements illicit the strongest scores. Further findings summarized in the IPCC report are used to guide the scoring framework where greater nuance is required.

  • Corporate and industry group alignment with the science is analyzed while considering the specificity of the positions communicated by these entities. It also considers how these positions are communicated. Evidence demonstrating that active engagement and advocacy on a particular climate policy issue is more clearly understood to be aligned or misaligned with a given science-based benchmark than more passive or banal statements. Thus, evidence of detailed advocacy on a specific climate policy issue is likely to receive stronger alignment or misalignment scores than generalized or high-level statements on the issue.

The section below overviews an initial five new science-based benchmarks for corporate and industry group advocacy on the role of coal, natural gas, oil, nuclear and renewable energy in the energy mix. These benchmarks focus on the broader role of these energy types in a global energy transition, with coal, natural gas, nuclear and renewables covering the power sector in particular. These will be followed in due course with more explicit benchmarks covering low-carbon transitions for the transport and industrial sectors, along with benchmarks covering various other policy issues, fuel types and technologies.

For each benchmark below there are two tables. The first table summarizes the benchmark and provides the key IPCC findings and statements upon which it is based. The second table develops this into a +2 to -2 scoring framework, with potential applications and examples illustrating how the benchmark might be used to assess corporate engagement with these issues.

A.6 Coal

Summary of Science Based Policy Benchmark on Coal Lobbying

An assessment signifying alignment with IPCC on the role for coal in the future energy mix is attained via strong support for governmental intervention to ensure swift removal of unabated coal from the energy mix. Such positions must be communicated with reference to timelines that align with IPCC guidance between 2020-2050. Entities can also score positively for advocacy that sees a prolonged, although significantly reduced, role for coal. However, this can only be achieved under strict, communicated conditions around the deployment of CCS. Entities must be transparent on the IPCC described risks and uncertainties associated with this approach. Any other advocacy for a prolonged role for coal scores negatively. This includes advocacy based on the use of High Efficiency Low Emissions Technologies. It also includes advocacy for a longer-term role for coal which references CCS but is ambiguous with regards to the plan to ensure its scale up and deployment or one that fails to transparently disclose on the risks associated with this pathway, as explained by IPCC. Due to the lifetimes of coal power plants and uncertainties around scale up and deployment of CCS for coal, any advocacy for expanded coal capacity, including new coal power installations, also scores negatively regardless of communications around CCS.

Key IPCC Findings:

Governmental action on the energy mix

“Moving from a 2°C to a 1.5°C pathway implies bold integrated policies that enable higher socio-technical transition speeds, larger deployment scales, and the phase-out of existing systems that may lock in emissions for decades (high confidence) The available literature indicates that mitigation pathways in line with 1.5°C pathways would require stringent and integrated policy interventions (very high confidence).” (SR15, Chapter 2, Section 2.5.1)

The trajectory of coal in the energy mix:

“In modelled 1.5°C pathways with limited or no overshoot, the use of CCS would allow the electricity generation share of gas to be approximately 8% (3–11% interquartile range) of global electricity in 2050, while the use of coal shows a steep reduction in all pathways and would be reduced to close to 0% (0–2% interquartile range) of electricity (high confidence).” (SR15, Summary For Policymakers, Section C2.2)

“The share of primary energy from renewables increases while coal usage decreases across pathways limiting warming to 1.5°C with no or limited overshoot (high confidence). By 2050, renewables (including bioenergy, hydro, wind, and solar, with direct equivalence method) supply a share of 52–67% (interquartile range) of primary energy in 1.5°C pathways with no or limited overshoot; while the share from coal decreases to 1–7% (interquartile range), with a large fraction of this coal use combined with carbon capture and storage (CCS).” (SR15, Ch2, Executive Summary)

Table 2.6 | Global primary energy supply of 1.5°C pathways from the scenario database: Coal as Share in Primary Energy (%) | Below 1.5°C and 1.5°C low-OS pathways: 2020 =25.63%; 2030 = 9.62%; 2050 =5.08%| 1.5°C high-OS: 2020 =25.94%; 2030 = 14.53%; 2050 = 4.41% (SR15, Chapter 2, Section 2.4.2.1)

Table 2.7 | Global electricity generation of 1.5°C pathways from the scenarios database: Coal as Share in Electricity Generation (%) | Below 1.5°C and 1.5°C low-OS pathways: 2020 =32.32%; 2030 = 7.28%; 2050 =0.82%| 1.5°C high-OS: 2020 = 32.39%; 2030 = 14.23%; 2050 = 0.55% (SR15, Chapter 2, Section 2.4.2.1)

The carbon intensity of the power sector

“1.5°C pathways with no or limited overshoot include a rapid decline in the carbon intensity of electricity and an increase in electrification of energy end use (high confidence). By 2050, the carbon intensity of electricity decreases to −92 to +11 gCO2 MJ−1 (minimum–maximum range) from about 140 gCO2 MJ−1 in 2020 Pathways with higher chances of holding warming to below 1.5°C generally show a faster decline in the carbon intensity of electricity by 2030 than pathways that temporarily overshoot 1.5°C.” (SR15, Chapter 2, Executive Summary)

“A robust feature of 1.5°C-consistent pathways, as highlighted by the set of pathway archetypes in Figure 2.5, is a virtually full decarbonization of the power sector

The lock in and retirement of carbon-intensive technologies

“Besides this clear geophysical trade-off over time, delaying GHG emissions reductions over the coming years also leads to economic and institutional lock-in into carbon-intensive infrastructure, that is, the continued investment in and use of carbon-intensive technologies that are difficult or costly to phase-out once deployed (Unruh and Carrillo-Hermosilla, 2006; Jakob et al., 2014; Erickson et al., 2015; Steckel et al., 2015; Seto et al., 2016; Michaelowa et al., 2018). Studies show that to meet stringent climate targets despite near-term delays in emissions reductions, models prematurely retire carbon-intensive infrastructure, in particular coal without CCS (Bertram et al., 2015a; Johnson et al., 2015).” (SR15, Chapter 2, Section 2.3.5)

Investments in fossil extraction and electricity generation

“IAM literature projects that investments in low-emission energy would overtake fossil fuel investments globally by 2025 in 1.5°C-consistent pathways (Ch2, Section 2.5.2) In contrast, investments in fossil fuel extraction and unabated fossil electricity generation along a 1.5°C-consistent pathway are projected to drop by 0.3–0.85 trillion USD yr−1 over the period 2016–2050, with investments in unabated coal generation projected to halt by 2030 in most 1.5°C-consistent pathways.” (Ch2, Section 2.5.2) (SR15, Ch4, Executive Summary)

The role of CCS in the Power Sector

“Studies have shown the importance of CCS for deep mitigation pathways (Krey et al., 2014a; Kriegler et al., 2014b), based on its multiple roles to limit fossil-fuel emissions in electricity generation, liquids production, and industry applications along with the projected ability to remove CO2 from the atmosphere when combined with bioenergy While deployment of CCS for natural gas and coal vary widely across pathways, there is greater natural gas primary energy connected to CCS than coal primary energy connected to CCS in many pathways (Figure 2.17) There is uncertainty in the future deployment of CCS given the limited pace of current deployment, the evolution of CCS technology that would be associated with deployment, and the current lack of incentives for large-scale implementation of CCS (Bruckner et al., 2014; Clarke et al., 2014; Riahi et al., 2017).” (SR15, Chapter 2, Section 2.4.2.3)

“The energy system transition that would be required to limit global warming to 1.5°C above pre-industrial conditions is underway in many sectors and regions around the world (medium evidence, high agreement). The political, economic, social and technical feasibility of solar energy, wind energy and electricity storage technologies has improved dramatically over the past few years, while that of nuclear energy and carbon dioxide capture and storage (CCS) in the electricity sector have not shown similar improvements.” (SR15, Ch4, Executive Summary)

“Modelling suggests that CCS in the power sector can contribute to cost-effective achievement of emission reduction requirements for limiting warming to 1.5°C. CCS may also offer employment and political advantages for fossil fuel-dependent economies (Kern et al., 2016), but may entail more limited co-benefits than other mitigation options (that, e.g., generate power) and therefore relies on climate policy incentives for its business case and economic feasibility” The technological maturity of CO2 capture options in the power sectors has improved considerably (Abanades et al., 2015; Bui et al., 2018), but costs have not come down between 2005 and 2015 due to limited learning in commercial settings and increased energy and resources costs (Rubin et al., 2015.” (SR15, Chapter 4, Section 4.3.1.6)

Table 10. Summary of science-based benchmark and key IPCC findings for coal.

Score

Description

Potential Applications

Examples

2+

Company is actively engaged in advocacy that is clearly aligned with IPCC guidance on the role for coal in the energy mix up to 2050

Entity is communicating a position that is clearly consistent with transition towards zero emissions power sector globally prior to 2050.

Entity is promoting steep reductions for the role for coal in the global energy mix, in line with IPCC guidance between 2020 and 2050.

Entity is supporting the early retirement coal power plants and opposing the approval of new coal power plans.

Entity is opposing infrastructure, investments or other systems enabling a prolonged role for coal in the energy mix.

Entity is advocating the need for strict government policy intervention to ensure the phase out of coal.

Entity advocating for a steep reduction of coal in the global energy mix, with residual energy production dependent on strict measures to ensure the scale-up and deployment of CCS prior to 2030 (N.B. risks and uncertainties associated with a longer-term role for coal paired with CCS deployment must be transparently disclosed on).

“By 2020, here’s where the world needs to be: Energy. Renewables make up at least 30% of the world’s electricity supply — up from 23.7% in 2015. No coal-fired power plants are approved beyond 2020, and all existing ones are being retired.” - Mission 20:20 statement 2017, signed by Unilever CEO Paul Poleman.

1+

Company position is mostly aligned with IPCC guidance on the role for coal in the energy mix up to 2050

Entity has communicated support for a phase out of coal in the energy mix.

Entity has stated support for a transition in power sector towards zero emissions.

Entity has communicated on the need for government intervention to aid the phase out of coal in the energy mix.

Entity is supporting a steep reduction of coal in the global energy mix, with residual energy production dependent on measures to ensure the scale-up and deployment of CCS prior to 2050 (N.B. risks and uncertainties associated with a longer-term role for coal paired with CCS deployment must be transparently disclosed on).

“More than 50 of Germany’s largest businesses, including industrial giant Siemens and retailer Metro, have called on the government to phase out coal power ... The future government must set a “reliable and socially-acceptable exit path for coal-fired electricity,” the companies said.” -Handelsblatt Global, October 2017

0

Unclear if position is aligned with IPCC guidance on the role for coal in the energy mix up to 2050

Supporting a phase out of coal in the energy mix, but with some ambiguity around the pace of this transition. For example, supporting the replacement of old coal plants with renewables, but not clearly supporting premature retirement of other coal plants.

Supporting a reduction of coal in the global energy mix, with a residual role of coal in the energy mix based on the deployment of CCS. However, it has not transparently communicated on the uncertainties and risks associated with this approach, or timelines concerning CCS deployment.

“The utility has pledged to become carbon-neutral by 2050, closing 23 coal power stations in Italy. It says it will never build another coal-fired plant, scrapping plans for two new facilities in Italy and Chile. “It is important that as old fossil-fuel plants are closed down, that capacity is replaced by renewables,” Francesco Starace (Enel CEO) added - RechargeNews , May 2016

-1

Position not aligned with IPCC guidance on the role for coal in the energy mix up to 2050

Entity has stated support for a transition away from coal but is arguing that this should be left to market forces.

Entity is supporting a continued role for coal in the energy mix dependent on the deployment of CCS. However, the supported role for coal appears greater than the IPCC’s predicted role for the fuel type and technology (e.g. promoting new builds).

Entity is supporting the need to deploy CCS for thermal coal installations with exceptions, for example proposing less stringent timelines to ensure all residual coal capacity is fitted with CCS.

“A Glencore delegation, led by chief executive officer Ivan Glasenberg, visited Canberra last week and proposed that a high efficiency, low emissions (HELE) coal-fired power station that also sequestered carbon, should be part of the energy mix. "There is an enormous opportunity in Australia to demonstrate that HELE technology with CCS can be used either for new build or retrofit of existing coal and gas power plants to materially reduce emissions,'' the company said” – The Australian Financial Review, November 2019

-2

Company is actively advocating a position that opposes IPCC guidance on the reduced role for oil in the energy mix up to 2050

Advocating the continued role for coal in the energy mix*.

Opposing the early retirement of coal assets*.

Promoting the need for new or additional thermal coal capacity*.

Promoting investments, infrastructure and policy measure enabling the future role for coal in the energy mix*.

Advocating for a slower paced low-carbon transition than advised by the IPCC *.

Entity is opposed to governmental intervention in the energy mix to phase out coal.

Opposing measures to ensure deployment of CCS for all coal power assets.

“Count on Coal is a grassroots organization that seeks to identify, educate and recruit Americans to support our mission to keep electricity affordable by protecting and promoting the use of our abundant coal for power generation” – Count on Coal Campaign, run by The National Mining Association( (US)

Table 11. The scoring framework for coal alongside examples of how the benchmark is used to assess corporate engagement with these issues.

*This includes advocacy that references CCS technology but either does not make it a condition for the future use of coal or does not accompany this with support for regulation to ensure CCS scale up and deployment. Similarly, it also includes any advocacy for coal based on the HELE technologies.

A.7 Natural Gas

Summary of Science Based Policy Benchmark on Natural Gas

A positive assessment of alignment with the IPCC on the role for natural gas in the energy mix can be achieved by entities supporting stringent intervention to remove unabated natural gas from the energy mix. Such positions must be communicated with reference to timelines that align with IPCC guidance between 2020-2050. Entities can also score positively for advocacy that sees a longer role for natural gas in the energy mix, as long as this is communicated with reference to strict conditions on the deployment of CCS, methane abatement measures and is clearly aligned with IPCC guidance on the corresponding ramp up of renewables in the energy mix. The relative risk and uncertainties related to this approach, as described by the IPCC, should also be communicated. Stated support for a transition towards a low-carbon energy mix that includes ambiguity concerning the timelines and extent of the reduction of unabated fossil fuels will result in comparatively reduced scores. The suggestion that government intervention is unnecessary to transition away from unabated fossil fuels such as natural gas scores negatively, as does advocacy in favor of natural gas on the basis that it is "low carbon" without clear conditions regarding CCS deployment and methane abatement attached. Advocacy in favor of measures that risk locking in GHG emission intensive energy systems on the basis of supporting natural gas, or opposition to the need for mandates on CCS deployment, likewise score highly negatively.

Key IPCC Findings:

Governmental action on the energy mix

“Moving from a 2°C to a 1.5°C pathway implies bold integrated policies that enable higher socio-technical transition speeds, larger deployment scales, and the phase-out of existing systems that may lock in emissions for decades (high confidence) The available literature indicates that mitigation pathways in line with 1.5°C pathways would require stringent and integrated policy interventions (very high confidence).” (SR15, Chapter 2, Section 2.5.1)

The trajectory of natural gas, in the energy mix:

“In modelled 1.5°C pathways with limited or no overshoot, the use of CCS would allow the electricity generation share of gas to be approximately 8% (3–11% interquartile range) of global electricity in 2050, while the use of coal shows a steep reduction in all pathways and would be reduced to close to 0% (0–2% interquartile range) of electricity (high confidence).” (SR15, Summary For Policymakers, Section C2.2)

“From 2020 to 2050 the primary energy supplied by oil declines in most pathways (−39 to −77% interquartile range). Natural gas changes by −13% to −62% (interquartile range), but some pathways show a marked increase albeit with widespread deployment of CCS”. (SR15, Chapter 2, Executive Summary)

“The share of primary energy provided by total fossil fuels decreases from 2020 to 2050 in all 1.5°C pathways, but trends for oil, gas and coal differ (Table 2.6) Natural gas changes by −88 to +85% (interquartile range −62 to −13%), with varying levels of CCS. (SR15, Chapter 2, Section 2.4.2.1)”

Table 2.6 | Global primary energy supply of 1.5°C pathways from the scenario database: Gas as Share in Primary Energy (%) | Below 1.5°C and 1.5°C low-OS pathways: 2020 =23.10%; 2030 = 22.52%; 2050 =13. 12%| 1.5°C high-OS: 2020 =23.61%; 2030 = 25.79%; 2050 =15.67% (SR15, Chapter 2, Section 2.4.2.1)

Table 2.7 | Global electricity generation of 1.5°C pathways from the scenarios database: Gas as Share in Electricity Generation (%) | Below 1.5°C and 1.5°C low-OS pathways: 2020 =24.39%; 2030 = 20.18%; 2050 =6.93%| 1.5°C high-OS: 2020 = 26.97%; 2030 = 22.29%; 2050 =5.29% (SR15, Chapter 2, Section 2.4.2.1)

The carbon intensity of the power sector

“1.5°C pathways with no or limited overshoot include a rapid decline in the carbon intensity of electricity and an increase in electrification of energy end use (high confidence). By 2050, the carbon intensity of electricity decreases to −92 to +11 gCO2 MJ−1 (minimum–maximum range) from about 140 gCO2 MJ−1 in 2020 Pathways with higher chances of holding warming to below 1.5°C generally show a faster decline in the carbon intensity of electricity by 2030 than pathways that temporarily overshoot 1.5°C.” (SR15, Chapter 2, Executive Summary)

“A robust feature of 1.5°C-consistent pathways, as highlighted by the set of pathway archetypes in Figure 2.5, is a virtually full decarbonization of the power sector around mid-century, a feature shared with 2°C-consistent pathways.” (SR15, Chapter 2, Section 2.3.2.1)

Investments in fossil extraction and electricity generation

“IAM literature projects that investments in low-emission energy would overtake fossil fuel investments globally by 2025 in 1.5°C-consistent pathways In contrast, investments in fossil fuel extraction and unabated fossil electricity generation along a 1.5°C-consistent pathway are projected to drop by 0.3–0.85 trillion USD yr−1 over the period 2016–2050, with investments in unabated coal generation projected to halt by 2030 in most 1.5°C-consistent pathways (Chapter 2, Section 2.5.2).” (SR15, Chapter 4, Executive Summary)

The lock in and retirement of carbon-intensive technologies

“Besides this clear geophysical trade-off over time, delaying GHG emissions reductions over the coming years also leads to economic and institutional lock-in into carbon-intensive infrastructure, that is, the continued investment in and use of carbon-intensive technologies that are difficult or costly to phase-out once deployed (Unruh and Carrillo-Hermosilla, 2006; Jakob et al., 2014; Erickson et al., 2015; Steckel et al., 2015; Seto et al., 2016; Michaelowa et al., 2018). Studies show that to meet stringent climate targets despite near-term delays in emissions reductions, models prematurely retire carbon-intensive infrastructure, in particular coal without CCS (Bertram et al., 2015a; Johnson et al., 2015).” (SR15, Chapter 2, Section 2.3.5)

The role of CCS in the Power Sector

“Studies have shown the importance of CCS for deep mitigation pathways (Krey et al., 2014a; Kriegler et al., 2014b), based on its multiple roles to limit fossil-fuel emissions in electricity generation, liquids production, and industry applications along with the projected ability to remove CO2 from the atmosphere when combined with bioenergy While deployment of CCS for natural gas and coal vary widely across pathways, there is greater natural gas primary energy connected to CCS than coal primary energy connected to CCS in many pathways (Figure 2.17) There is uncertainty in the future deployment of CCS given the limited pace of current deployment, the evolution of CCS technology that would be associated with deployment, and the current lack of incentives for large-scale implementation of CCS (Bruckner et al., 2014; Clarke et al., 2014; Riahi et al., 2017)”. (SR15, Chapter 2, Section 2.4.2.3)

“The energy system transition that would be required to limit global warming to 1.5°C above pre-industrial conditions is underway in many sectors and regions around the world (medium evidence, high agreement). The political, economic, social and technical feasibility of solar energy, wind energy and electricity storage technologies has improved dramatically over the past few years, while that of nuclear energy and carbon dioxide capture and storage (CCS) in the electricity sector have not shown similar improvements.” (SR15, Chapter 4, Executive Summary)

“Modelling suggests that CCS in the power sector can contribute to cost-effective achievement of emission reduction requirements for limiting warming to 1.5°C. CCS may also offer employment and political advantages for fossil fuel-dependent economies (Kern et al., 2016), but may entail more limited co-benefits than other mitigation options (that, e.g., generate power) and therefore relies on climate policy incentives for its business case and economic feasibility The technological maturity of CO2 capture options in the power sectors has improved considerably (Abanades et al., 2015; Bui et al., 2018), but costs have not come down between 2005 and 2015 due to limited learning in commercial settings and increased energy and resources costs (Rubin et al., 2015).” (SR15, Chapter 4, Section 4.3.1.6)

Methane Abatement

“Limiting warming to 1.5°C implies reaching net zero CO2 emissions globally around 2050 and concurrent deep reductions in emissions of non-CO2 forcers, particularly methane (high confidence).” (SR15, Chapter 2,Executive Summary)

Table 12. Summary of science-based benchmark and key IPCC findings for natural gas.

Score

Rational

Potential Applications

Example

2+

Company is actively engaged in advocacy that is clearly aligned with IPCC guidance on the role for natural gas in the energy mix up to 2050

Entity's position is clearly consistent with a transition towards zero emissions power sector globally prior to 2050.

Entity is advocating for the phase out of fossil fuels in favor of renewables.

Entity is promoting reductions of natural gas in the global energy mix in line with IPCC guidance between 2020 and 2050.

Entity is opposing infrastructure, systems and investments that risk locking in unabated fossil fuels, including natural gas, in the energy mix.

Entity is advocating for stringent government policy intervention to remove unabated natural gas in the energy mix.

Entity is advocating a reduction of natural gas in the energy mix, with all remaining natural gas dependent on clear deadlines by which CCS must be deployed prior to 2050, as well as stringent methane abatement measures. (N.B. Entity must also transparently communicate on the IPCC described risks and uncertainties associated with natural gas paired with CCS).

“The main cause of climate change is the current energy system (which includes electricity - which has low-emissions), gas and oil) A solution to climate change therefore requires a change in the energy model which should be based on 1) energy savings and efficiency and 2) the progressive substitution of fossil fuels with emissions-free energy, basically through the use of renewable energy sources The goal should be to advance towards a carbon-free system based on renewables by 2050.” – Iberdrola, Talanona Dialogue Submission, 2018.

1+

Company position is mostly aligned with IPCC guidance on the role for natural gas in the energy mix up to 2050

Entity has communicated support for measures to reduce fossil fuels, including of natural gas, in the energy mix.

Entity has stated support for a transition in power sector towards zero emissions by 2050

Entity has communicated on the need for government intervention to remove unabated fossil fuels, including natural gas, from the energy mix.

Entity has stated that the role for natural gas should be dependent on the deployment of CCS and methane abatement measures (N.B. Entity must also transparently communicate on the IPCC described risks and uncertainties associated with natural gas paired with CCS).

“Economic stimulus packages should contribute to building a healthier, more resilient, net-zero-emissions economy For oil and gas producing countries and coal-rich economies, this crisis precipitates a transition that was already looming for the decade ahead. Fiscal stimulus could usefully be invested in an early phase-out of the least competitive assets, the diversification of their economy, and supportive measures for workers and regions which will be impacted by the transition”. - The Energy Transitions Commission, 7 Priorities to Help the Global Economy Recover, May 2020 (Signed by companies including BP, SSAB, and Allianz)

0

Unclear if position is aligned with IPCC guidance on the role for natural gas in the energy mix up to 2050

Entity is supporting an energy pathway that includes a reduction of natural gas in the global energy mix. Unclear if the pace and extent of this reduction is aligned with IPCC guidelines.

Supporting shift from coal to gas, unclear if gas is seen as long-term energy solution.

Supporting a continued role for gas with CCS in the energy mix but with some ambiguities around conditions and timelines for ensuring CCS deployment.

“We advocate policies that support a role for natural gas in decarbonising the transport, industrial and building sectors and as a replacement for coal in power generation. We advocate the direct regulation of methane emissions as a risk to the climate system We advocate regulatory frameworks and other government support that enable the deployment of carbon capture, utilisation and storage at scale.” - Shell's Climate-related Policy Positions, updated April 2020.

-1

Position not aligned with IPCC guidance on the role for natural gas in the energy mix up to 2050

Entity has emphasized concerns around economic or technical feasibility of a move away from fossil fuels including natural gas in the energy mix. The evidence suggests that it supports a slower paced low-carbon transition than advised by the IPCC.

Entity has stated support for a transition to low-carbon energy sources but arguing that this should be left to market forces.

Entity has suggested that the long-term role for natural gas in the energy mix is desirable without placing clear conditions on the deployment of CCS or methane abatement measures.

Entity is stating support for natural gas in the energy mix on basis that it is 'low carbon' without clear conditions related to CCS or mitigating methane emissions.

“The influx of natural gas will play a critical role by helping to meet increasing demand and, indirectly, by enabling the growing use of renewables In coming decades, as new cities, factories and infrastructures rise around the world, U.S. natural gas can help fuel our energy demand and drive economic growth, both at home and abroad” - Chevron, paid-for editorial in the NYT.

-2

Company is actively advocating a position that opposes IPCC guidance on the reduced role for natural gas in the energy mix up to 2050

Entity is opposing the reduction of fossil fuels, including unabated natural gas, in the energy mix.

Entity is opposed to governmental intervention in the energy mix to phase out unabated fossil fuels.

Entity is supporting infrastructure, investments or other systems that will lock in unabated fossil fuels, including natural gas.

Opposing the need for stringent measures to ensure CCS deployment when it comes to the role of natural gas in the energy mix.

“Markets, not government interventions, should determine energy sources for power generation. They reward innovation, work toward lower prices, reduce emissions in the power sector and benefit consumers. Because of natural gas’ abundance and flexibility, it is increasingly the fuel of choice for generating electricity. Markets should be allowed to function freely, without government putting its thumb on the scales.” – API 2019 State of American Energy Report

Table 13. The scoring framework for natural gas alongside examples of how the benchmark is used to assess corporate engagement with these issues.

A.8 Oil

Summary of Science Based Policy Benchmark on Oil Lobbying

A positive assessment of alignment with the IPCC on the role for oil in the future energy mix can be achieved by entities supporting stringent intervention to reduce oil from the energy mix, communicated with reference to timelines that align with IPCC guidance between 2020-2050. Statements of support for a transition towards a low-carbon energy mix that include ambiguity concerning the timelines and extent of the reduction of unabated fossil fuels will result in comparatively reduced scores. The suggestion that oil is desirable in a long-term energy mix or that government intervention is unnecessary to transition away from GHG emission intense energy source scores negatively. Advocacy in favor of measures that risk the locking in of a greater or extended role for oil in the energy mix score the most negatively.

Key IPCC Findings:

Governmental action on the energy mix

“Moving from a 2°C to a 1.5°C pathway implies bold integrated policies that enable higher socio-technical transition speeds, larger deployment scales, and the phase-out of existing systems that may lock in emissions for decades (high confidence). The available literature indicates that mitigation pathways in line with 1.5°C pathways would require stringent and integrated policy interventions (very high confidence).” (SR15, Chapter 2, Section 2.5.1)

The trajectory of oil, in the energy mix:

“The share of primary energy from renewables increases while coal usage decreases across pathways limiting warming to 1.5°C with no or limited overshoot (high confidence). From 2020 to 2050 the primary energy supplied by oil declines in most pathways (−39 to −77% interquartile range).” (SR15, Chapter 2, Executive Summary)

The share of primary energy provided by total fossil fuels decreases from 2020 to 2050 in all 1.5°C pathways, but trends for oil, gas and coal differ (Table 2.6). By 2050, the share of primary energy from coal decreases to 0–11% across 1.5°C pathways with no or limited overshoot, with an interquartile range of 1–7%. From 2020 to 2050 the primary energy supplied by oil changes by −93 to −9% (interquartile range −77 to −39%).” (SR15 Chapter 2, Section 2.4.2.1)

Table 2.6 | Global primary energy supply of 1.5°C pathways from the scenario database: Oil as Share in Primary Energy (%) | Below 1.5°C and 1.5°C low-OS pathways: 2020 = 34.81%; 2030 = 31.24%; 2050 =12.89%| 1.5°C high-OS: 2020 =33.79%; 2030 = 32.01%; 2050 =16.22% (SR15, Chapter 2, Section 2.4.2.1)

The lock in and retirement of carbon-intensive technologies

“Besides this clear geophysical trade-off over time, delaying GHG emissions reductions over the coming years also leads to economic and institutional lock-in into carbon-intensive infrastructure, that is, the continued investment in and use of carbon-intensive technologies that are difficult or costly to phase-out once deployed (Unruh and Carrillo-Hermosilla, 2006; Jakob et al., 2014; Erickson et al., 2015; Steckel et al., 2015; Seto et al., 2016; Michaelowa et al., 2018). Studies show that to meet stringent climate targets despite near-term delays in emissions reductions, models prematurely retire carbon-intensive infrastructure, in particular coal without CCS (Bertram et al., 2015a; Johnson et al., 2015).” (SR15, Chapter 2, Section 2.3.5)

Investments in fossil extraction and electricity generation

“IAM literature projects that investments in low-emission energy would overtake fossil fuel investments globally by 2025 in 1.5°C-consistent pathways (Chapter 2, Section 2.5.2). In contrast, investments in fossil fuel extraction and unabated fossil electricity generation along a 1.5°C-consistent pathway are projected to drop by 0.3–0.85 trillion USD yr−1 over the period 2016–2050, with investments in unabated coal generation projected to halt by 2030 in most 1.5°C-consistent pathways (Chapter 2, Section 2.5.2).” (SR15, Chapter 4, Executive Summary)

Table 14. Summary of science-based benchmark and key IPCC findings for oil.

Score

Description

Potential Applications

Examples

2+

Company is actively engaged in advocacy that is clearly aligned with IPCC guidance on the role for oil in the energy mix up to 2050

Entity is calling for the phase out of fossil fuels, including oil, in the energy mix.

Entity is promoting steep reductions for the role for oil in the global energy mix in line with IPCC guidance between 2020 and 2050.

Entity is opposing infrastructure, investments or other systems that risk locking in unabated fossil fuels, including oil, in the energy mix.

“The industrial strategy of the next European Commission must therefore be climate-proofed, in order to set out a pathway for energy-intensive industries which is consistent with the net-zero 2050 objective. It must be bold in terms of looking at the smoothest and most cost-effective way of phasing out fossil fuels over time and moving to a fully efficient and renewable-based energy system”. - IIGCC, EU Strategy for Long-Term Greenhouse Gas Emissions Reduction

1+

Company position is mostly aligned with IPCC guidance on the role for oil in the energy mix up to 2050

Entity has communicated support for measures. to reduce oil in the global energy mix.

Entity is supporting a transition away from oil towards low and zero-carbon energy sources.

“Economic stimulus packages should contribute to building a healthier, more resilient, net-zero-emissions economy For oil and gas producing countries and coal-rich economies, this crisis precipitates a transition that was already looming for the decade ahead. Fiscal stimulus could usefully be invested in an early phase-out of the least competitive assets, the diversification of their economy, and supportive measures for workers and regions which will be impacted by the transition”. - The Energy Transitions Commission, 7 Priorities to Help the Global Economy Recover, May 2020 (Signed by companies including BP, SSAB, and Allianz)

0

Unclear if company position is aligned with IPCC guidance on the role for oil in the energy mix up to 2050

Unclear if entity is supporting a reduction of oil in the global energy mix that is in line with IPCC guidelines.

“The world must also switch from high-carbon fuels like coal and oil to low carbon-non renewable energy options like natural gas. Indeed, natural gas has the lowest carbon content of the primary fossil fuels used in power generation, and highly efficient gas turbines provide the flexibility required to successfully operate global power networks that are increasingly supplemented by variable energy resources such as wind and solar”. - General Electric, Corporate Website 2019

-1

Company position not aligned with IPCC guidance on the reduced role for oil in the energy mix up to 2050

Entity has emphasized concerns around economic or technical feasibility of a move away from oil in the energy mix, suggesting that it supports a slower paced low-carbon transition than advised by the IPCC.

Entity has stated support for a transition to low-carbon energy sources but argues that this is best left to market forces.

Entity has suggested that oil is desirable in the long-term energy mix.

““Society has aspirations for economic growth, reliable and affordable energy, and environment protection,” Woods said at Exxon’s annual general meeting in Dallas on Wednesday. “We see our role as helping close the gap between what people want and what can be responsibly done. This is what I believe sustainability is all about.” In his comments, Woods said that trillions of dollars of fresh investment is needed in oil and gas if the world is to meet the demand for energy out to 2040, even if policy makers limited global warming to two degrees above historical norms, Woods said. "Oil and natural gas continues to play a huge role in all scenarios," he said.” – Exxon CEO, Darren Woods, Bloomberg, May 2018

-2

Company is actively advocating a position that opposes IPCC guidance on the reduced role for oil in the energy mix up to 2050

Entity is opposing a reduction of oil in the energy mix.

Entity is opposed to governmental intervention in the energy mix to phase out unabated fossil fuels.

Entity is supporting infrastructure, investments or other systems that will lock in oil in the energy mix.

“A new report by the U.S. Chamber of Commerce Global Energy Institute (GEI) found that the anti-energy “Keep it in the Ground” (KIITG) movement has prevented at least $91.9 billion in domestic economic activity and eliminated nearly 730,000 job opportunities. “The anti-energy movement’s opposition to vital energy infrastructure comes with a real cost: lost job opportunities and billions in prevented domestic economic activity,”” - US Chamber of Commerce Press Release.

Table 15. The scoring framework for oil alongside examples of how the benchmark is used to assess corporate engagement with these issues.

A.9 Nuclear

Summary of Science Based Policy Benchmark on Nuclear Lobbying

The assessment of alignment with IPCC on the role for nuclear in the future energy mix takes into account an entity's position on nuclear power as well as the entity’s broader position on the future energy mix. Scores for the strongest alignment to IPCC guidance are achieved when support for nuclear is communicated as part of a broader position in support of phasing out unabated fossil fuels and transitioning to a predominately renewables-based energy system, in line with IPCC guidance for 2020-2050. Communication in support for nuclear that includes ambiguity regarding a broader transition towards a zero- emissions results in comparatively reduced scores. Due to the current time lag between decision date and the commissioning of new nuclear plants, advocacy supporting a delayed transition that is dependent on a scale up of nuclear energy scores negatively. So too does advocacy that appears to see nuclear power as an alternative to renewable energy, or a partner for unabated fossil fuels e.g. coal and natural gas. Opposition to a transition towards a zero- carbon energy mix, covering renewables and nuclear, also scores negatively.

Key IPCC Findings:

Governmental action on the energy mix

“Moving from a 2°C to a 1.5°C pathway implies bold integrated policies that enable higher socio-technical transition speeds, larger deployment scales, and the phase-out of existing systems that may lock in emissions for decades (high confidence). The available literature indicates that mitigation pathways in line with 1.5°C pathways would require stringent and integrated policy interventions (very high confidence).” (SR15 Chapter 2, Section 2.5.1)

The trajectory of nuclear in the energy mix:

“The share of primary energy from renewables increases while coal usage decreases across pathways limiting warming to 1.5°C with no or limited overshoot (high confidence). Primary energy supplied by bioenergy ranges from 40–310 EJ yr−1 in 2050 (minimum-maximum range), and nuclear from 3–66 EJ yr−1 (minimum–maximum range). These ranges reflect both uncertainties in technological development and strategic mitigation portfolio choices.” (SR15, Chapter 2, Executive Summary)

“Several energy supply characteristics are evident in 1.5°C pathways assessed in this section: (i) growth in the share of energy derived from low-carbon-emitting sources (including renewables, nuclear and fossil fuel with CCS) and a decline in the overall share of fossil fuels without CCS (Section 2.4.2.1), (ii) rapid decline in the carbon intensity of electricity generation simultaneous with further electrification of energy end-use (Section 2.4.2.2), and (iii) the growth in the use of CCS applied to fossil and biomass carbon in most 1.5°C pathways.” (SR15, Chapter 2, Section 2.4.2)

“By mid-century, the majority of primary energy comes from non-fossil fuels (i.e. renewables and nuclear energy) in most 1.5°C pathways (Table 2.6). Nuclear power increases its share in most 1.5°C pathways with no or limited overshoot by 2050, but in some pathways both the absolute capacity and share of power from nuclear generators decrease (Table 2.15). There are large differences in nuclear power between models and across pathways (Kim et al., 2014; Rogelj et al., 2018). One of the reasons for this variation is that the future deployment of nuclear can be constrained by societal preferences assumed in narratives underlying the pathways (O’Neill et al., 2017; van Vuuren et al., 2017b). Some 1.5°C pathways with no or limited overshoot no longer see a role for nuclear fission by the end of the century, while others project about 95 EJ yr−1 of nuclear power in 2100 (Figure 2.15).” (SR15, Chapter 2, Section 2.4.2.1)

Table 2.6 | Global primary energy supply of 1.5°C pathways from the scenario database: Nuclear as Share in Primary Energy (%) | Below 1.5°C and 1.5°C low-OS pathways: 2020 = 12.09%; 2030 = 14.33%; 2050 =8.10%| 1.5°C high-OS: 2020 =1.86%; 2030 =2.99%; 2050 =4.17% (SR15, Chapter 2, Section 2.4.2.1)

Table 16. Summary of science-based benchmark and key IPCC findings for nuclear.

Score

Description

Potential Applications

Examples

2+

Company is actively engaged in advocacy that is clearly aligned with IPCC guidance on the role for nuclear in the energy mix up to 2050

Entity is advocating for the phase out of unabated fossil fuels in favor of renewables and supported by nuclear.

Entity is supporting infrastructure, investments or other systems to aid the transition towards a renewables-based energy mix supported by nuclear.

Entity is advocating the need for stringent policy governmental intervention to aid a transition towards a renewables-based energy mix supported by nuclear.

Entity is communicating a position that is clearly consistent with a transition towards zero emissions power sector globally prior to 2050.

To reach Net Zero, the UK’s future will be powered by low carbon electricity. Batteries will displace diesel and petrol engines and heat pumps will replace gas boilers. And as the role of hydrogen grows, we will need electricity to produce it. The Committee on Climate Change estimates we will need to quadruple our generation of low carbon electricity compared to today. The great majority will come from wind and solar. To make the most of renewables, and batteries, the Committee on Climate Change argues that the UK also needs a source of ‘firm’ or ‘always available’ low carbon power. Nuclear meets this need. In fact, today there is no other proven technology to do so. Working together, renewables, storage and nuclear can deliver a flexible, secure system in which the costs to consumers are minimised. - EDF Energy chairman & The Prince of Wales's Corporate Leader's Group co-chair Colin Matthews, Blog Post, July 2020

1+

Company position is mostly aligned with IPCC guidance on the role for nuclear in the energy mix up to 2050

Entity is supporting an increase in renewables, nuclear and other zero-carbon energy technologies in the energy mix.

Entity has stated support for the long-term contribution from nuclear energy to support shift towards renewables and other zero-carbon technologies.

Entity has communicated on the need for government intervention to support a transition towards renewables and nuclear in the energy mix.

Every carbon-free megawatt has the same value to fight climate change. When everyone competes, the lowest-cost resources win. Imagine a competitive, technology-inclusive, market where renewable energy, nuclear, carbon capture, or battery storage projects win because they provide the most green attributes at the lowest price – NRG Energy, Abraham Silverman, Senate Testimony, April 2019

0

Unclear if company position is aligned with IPCC guidance on the role for nuclear in the energy mix up to 2050

Entity is supporting the long-term role for nuclear in the energy mix but is unclear or ambiguous as to how it sees nuclear role with regards to a full transition towards a zero-emission energy system.

Supporting nuclear but with no clear position on the energy mix in general.

Entity is supporting an energy transition pathway that includes an increase in renewables and nuclear. However, there is some ambiguity regarding the pace and extent of this transition and its alignment with IPCC recommendations.

“It is important to promote the restart of the Nuclear power plants that have been confirmed to be safe in order to contribute 20 to 22% of the total power generation in 2030.” - Japan Atomic Industrial Forum (JAIF), Director's new year speech, January 2017

-1

Company position not aligned with IPCC guidance on the role for nuclear in the energy mix up to 2050

Entity appears to be supporting a prolonged transition to low-carbon energy mix to allow for the scale up and implementation of nuclear energy.

Entity is supporting the longer role for nuclear in the energy mix, but seemingly as an alternative to a transition to renewable energy.

Entity is supporting the long-term role for nuclear in the energy mix, but seemingly to accompany GHG-emitting energy sources e.g. natural gas.

Entity is a transition towards renewables and nuclear in the energy mix but suggesting that this should be left to market forces.

“We believe climate policy should: Incentivize a zero-carbon trajectory at the lowest cost, rather than simply imposing a price or dictating a certain generation mix; Recognize that nuclear and natural gas generation remain essential to transitioning to an affordable and reliable net-zero carbon future” – Duke Energy, Climate Report, 2020

-2

Company is actively advocating a position that opposes IPCC guidance on the role for nuclear in the energy mix up to 2050

Entity is opposing shift to zero-carbon energy mix, including role of nuclear.

Entity is advocating in favor of nuclear in the long-term energy mix but is promoting the role for coal in the meantime.

Entity is promoting a long term for nuclear in the energy mix alongside unabated fossil fuels e.g. natural gas and coal.

Entity is advocating for the role of nuclear in the energy mix but opposing a shift to renewables.

Entity is supporting infrastructure, investments or other systems that might block a transition towards a renewables-based energy mix supported by nuclear.

Entity is opposed to the need for government intervention to ensure transition towards a renewables-based energy mix supported by nuclear.

“GE supports strong energy infrastructure with a mix of conventional and renewable energy. As discussed above, it is important to: encourage the use of renewable and nuclear energy to reduce carbon emissions; promote the integration of natural gas technologies with renewables, which assures the required reliable and flexible generation of electricity; and support opportunities to replace less efficient energy sources with efficient, state of the art coal generation where the circumstances warrant.” – General Electric, Climate Statement April 2019

Table 17. The scoring framework for nuclear alongside examples of how the benchmark is used to assess corporate engagement with these issues.

A.10 Renewables

Summary of Science Based Policy Benchmark on Renewables Lobbying

A positive assessment of alignment with the IPCC on the role for renewables in the future energy mix can be achieved by entities supporting stringent intervention to ensure a significant ramp up in renewables in the energy mix, communicated with reference to timelines that align with IPCC guidance between 2020-2050. Stated support of an increase in renewables that includes ambiguity concerning the timelines and the extent of this will result in comparatively reduced scores. Advocacy suggesting that the transition towards renewables should be slower, should be left to market forces, or should be limited so that other energy sources e.g. fossil fuels continue to play a dominant role in the energy mix score negatively. Advocacy in opposition of measures to ensure an immediate ramp up in renewables score highly negatively.

Key IPCC Findings:

The trajectory of renewables in the energy mix:

“In 1.5°C pathways with no or limited overshoot, renewables are projected to supply 70–85% (interquartile range) of electricity in 2050 (high confidence).” (SR15, Summary For Policymakers, Section 2.2)

“The share of primary energy from renewables increases while coal usage decreases across pathways limiting warming to 1.5°C with no or limited overshoot (high confidence). By 2050, renewables (including bioenergy, hydro, wind, and solar, with direct equivalence method) supply a share of 52–67% (interquartile range) of primary energy in 1.5°C pathways with no or limited overshoot; while the share from coal decreases to 1–7% (interquartile range), with a large fraction of this coal use combined with carbon capture and storage (CCS).” (SR15, Chapter 2, Executive Summary)

“By 2050, the share of electricity supplied by renewables increases to 59–97% (minimum-maximum range) across 1.5°C pathways with no or limited overshoot. Pathways with higher chances of holding warming to below 1.5°C generally show a faster decline in the carbon intensity of electricity by 2030 than pathways that temporarily overshoot 1.5°C.” (SR15, Chapter 2, Executive Summary)

“A growing body of literature on 100%-renewable energy scenarios has emerged (e.g. see Creutzig et al., 2017; Jacobson et al., 2017), which goes beyond the wide range of IAM projections of renewable energy shares in 1.5°C and 2°C pathways. While the representation of renewable energy resource potentials, technology costs and system integration in IAMs has been updated since AR5, leading to higher renewable energy deployments in many cases (Luderer et al., 2017; Pietzcker et al., 2017), none of the IAM projections identify 100% renewable energy solutions for the global energy system as part of cost-effective mitigation pathways.” (SR15, Chapter 2, Section 2.1.4)

“By mid-century, the majority of primary energy comes from non-fossil fuels (i.e., renewables and nuclear energy) in most 1.5°C pathways (Table 2.6).” (SR15, Chapter 2, Section 2.4.2.1)

Table 2.6 | Global primary energy supply of 1.5°C pathways from the scenario database: Renewables Share in Primary Energy (%) | Below 1.5°C and 1.5°C low-OS pathways: 2020 =14.90%; 2030 = 29.08%; 2050 =60.24 % | 1.5°C high-OS: 2020 =15.08%; 2030 = 23.65%; 2050 = 62.16% (SR15, Chapter 2, Section 2.4.2.1)

Table 2.7 | Global electricity generation of 1.5°C pathways from the scenarios database: Renewables Share in Electricity Generation (%) | Below 1.5°C and 1.5°C low-OS pathways: 2020 = 26.32%; 2030 = 53.68%; 2050 = 77.12%. | 1.5°C high-OS: 2020 = 28.37 %; 2030 = 42.73 %; 2050 = 82.39 %. (SR15, SR15, Chapter 2, Section 2.4.2.1)

“By 2050, the share of electricity supplied by renewables increases from 23% in 2015 (IEA, 2017b) to 59–97% across 1.5°C pathways with no or limited overshoot. Wind, solar, and biomass together make a major contribution in 2050, although the share for each spans a wide range across 1.5°C pathways (Figure 2.16). Fossil fuels on the other hand have a decreasing role in electricity supply, with their share falling to 0–25% by 2050 (Table 2.7).” (SR15, SR15, Chapter 2, Section 2.4.2.2)

Table 18. Summary of science-based benchmark and key IPCC findings for renewables.

Score

Description

Potential Applications

Examples

2+

Company is actively engaged in advocacy that is clearly aligned with IPCC guidance on the role for renewables in the energy mix

Entity is advocating action to ensure shift to renewables in power sector before 2030.

Entity is advocating in support of full transition towards renewables in the power sector.

Entity promoting a steep ramp up for the role for renewables in the global energy mix in line with IPCC guidance between 2020 and 2050.

Entity advocating in favor of infrastructure, investments or other systems to aid the transition towards a renewables-based energy system.

Entity is promoting the need for stringent policy intervention to ensure the ramp up of renewables in the energy mix.

Entity is communicating a position that is clearly consistent with a transition towards a zero-emissions power sector globally prior to 2050.

"To keep our planet on course with the Paris agreement to mitigate climate change, we must fully switch to renewable sources of electricity," - Nicola Kimm, Philips Lighting's head of sustainability, environment, health and safety, said in a statement.

1+

Company position is mostly aligned with IPCC guidance on the role for renewables in the energy mix

Entity has communicated support for a transition to renewable energy.

Entity has communicated support for a zero-emissions power sector.

Entity has communicated on the need for government intervention to support a transition towards renewables.

“Increasing the deployment of renewable energy resources is valuable for the planet, good for business, and important for our customers. As part of our sustainability efforts, Amazon advocates in support of public policy that advances access to and the expansion of clean energy. We will continue to promote policies that support renewable energy to power our operations.” - Amazon Corporate Website

0

Unclear if company position is aligned with IPCC guidance on the role for renewables in the energy mix up to 2050

Entity is supporting increase in renewables in the energy mix. There is some ambiguity regarding the pace and extent of this increase, as well as the need for policy to support it.

“Abundant, clean, efficient & increasingly competitive, #wind energy has a key role to play in the #EnergyTransition ! That's why we're committed to advancing wind technology in Europe with new projects in the UK and France” - Total SA, Twitter, June 2020

-1

Company position not aligned with IPCC guidance on the role for renewables in the energy mix

Entity is supporting increased renewable energy with exceptions, seemingly supporting a slower pace transition than advised by the IPCC.

Entity has stated support for renewable energy in the energy mix but appears not to support a transition towards renewables becoming the dominant energy source.

Entity is emphasizing concerns over the technical or economic feasibility of a transition towards renewable energy, suggesting other energy sources are desirable.

Entity is supporting transition to renewables but suggesting that this should be left to market forces.

“We need a faster transition to a low-carbon energy system and a net-zero-emissions world. ... But a growing, more prosperous world needs growing quantities of energy, and that includes oil and gas. Today, one billion people lack the energy they need, and renewables alone can’t meet those needs.” -BP CEO Bob Dudley, Oct 2019

-2

Company is actively advocating a position that opposes IPCC guidance on the role for renewables in the energy mix up to 2050

Entity is opposed to immediate efforts to increase the role of renewable energy prior to 2030.

Entity is advocating against the need for a transition towards a renewable- dominated power mix in line with IPCC recommendations between 2020-2050.

Entity is opposing infrastructure, investments or other systems that support a transition towards renewables.

Entity is opposed to the need for government intervention to ensure transition towards renewable energy.

"This new coal unit helps to demonstrate that the next generation of the coal fleet will be able to increase efficiency, lower emissions, and compete against other fuel sources to provide reliable and affordable electricity," said American Coalition for Clean Coal Electricity President and CEO Michelle Bloodworth. ACCCE made that case in a report last month. The 10-page white paper calls for eliminating renewable and nuclear energy tax credits and state renewable portfolio standards to allow coal to compete." - E&E News, April 2019

Table 19. The scoring framework for renewables alongside examples of how the benchmark is used to assess corporate engagement with these issues.

B.1 Introduction

Corporate climate policy engagement is a strategic element of the Climate Action 100+ investor engagement process made up of 450 investors who collectively manage over $40 trillion in assets. Similar engagement is likely to extend to the corporate sector more broadly.

Several investor-representative groups, such as the UN PRI, theIIGCC and CERES , have formalized their expectations of how companies should manage their climate policy engagement processes. These investor expectations broadly align in their requests of companies and are summarized as follows:

  • Paris-Aligned Advocacy: To adopt climate policy positions in line with the Paris Agreement and to engage accordingly.

  • Policy Alignment Processes: To ensure good governance of climate policy engagement processes and industry group links, and consistency between the company’s stated climate goals and its policy engagement activities.

  • Disclosure: To ensure full transparency regarding positions on climate change policy, policy engagement, industry groups, misalignments and any remedial plans.

An increasing number of companies now self-assess and disclose their climate policy engagements as a result of this pressure, with a particular focus on reviewing industry groups’ alignments with climate policy. Since BHP published its industry group review in 2017, around 15 major global corporates such as Anglo American, Shell, RWE, BASF and BP have delivered or committed to similar disclosures of their industry group links in response to investor pressure, with many more expected in 2020. This positive momentum will be undermined if these disclosures do not meet investor expectations.

In response to this emerging trend, InfluenceMap has developed a new framework to assess company disclosures on their links to industry groups and how these relationships are governed. This is benchmarked against the Disclosures and Policy Alignment Processes aspects of investor expectations on climate policy engagement.

B.2 Assessing Disclosures

The UN PRI’s ‘Investor Expectations on Corporate Climate Lobbying’ report highlights the need for companies to disclose their positions and activities on climate change policy engagement, as well as the positions and activities of the industry groups that they support. The governance processes implemented, and actions taken to ensure alignment with these activities and stated climate goals, should also be disclosed. The IIGCC and CERES articulate similar expectations, while also requiring companies to disclose a material impact assessment of policy engagement by an organization that opposes their public position. InfluenceMap has developed the following assessment criteria to test the clarity, accuracy and scope of information provided by companies against four key issues based on these expectations.

Disclosure Item

InfluenceMap’s Assessment Criteria

Corporate Climate Policy Positions and Influencing Activities

  • Is there a detailed and clearly referenced breakdown of the company’s own climate policy positions and influencing activities beyond ‘top-line’ statements? Does this include descriptions of the company’s positions and policy engagement activities on specific items of legislation and regulations?

  • Has the company disclosed specific and deliberate attempts to influence policy engagement via third-party groups?

Industry Group Climate Policy Positions and Influencing Activities

  • Has the company identified and disclosed on all industry groups influencing climate-related policy areas that they hold memberships to?

  • Is there a transparent and accurate account of each industry group’s climate policy positions and influencing activities beyond ‘top-line’ statements? Does this include clearly referenced descriptions of positions and policy engagement activities on specific items of legislation?

Alignment Assessment Method

  • Has the company set out a logical framework for assessing alignment with its industry groups across all relevant areas of policy engagement? Has this framework been consistently applied across all of the company’s industry groups?

  • Has the company provided a clear and detailed explanation behind its evaluation of each industry group? Does this include an impact assessment of misaligned policy engagement?

Framework for Addressing Misalignment

  • Has the company set out a clear framework for addressing misalignments with its industry groups that includes escalating steps and clear deadlines for industry groups who do not amend misaligned policy engagement practices?

  • Are the steps that the company is committing to transparent or able to be reviewed by an external party? Is there a mechanism to regularly report on progress?

Table 20. InfluenceMap’s assessment criteria for disclosures in line with investor expectations.

B.3 Assessing Progress on Policy Alignment

In addition to transparent disclosures, the IIGCC, CERES and the UN PRI’s investor expectations also outline the need for robust processes to align a company’s stated policy position and the positions and policy engagement activities of its industry groups.

These processes are described as follows:

  • Initial processes to identify an industry group’s climate policy engagement activities and to assess alignment with the company’s own climate positions.

  • Ongoing processes to monitor and review an industry group’s climate policy engagement activities.

  • Processes to act in situations where policy engagement is not aligned.

InfluenceMap assesses a company’s progress towards reforming their industry groups according to the following framework:

Key

Explanation

Has broadly met investor expectations in this area.

Has made some progress on investor expectations in this area, but with significant deficiencies.

Has fallen short of investor expectations in this area.

Table 21. InfluenceMap’s framework used to assess a company’s progress towards reforming their industry groups.

InfluenceMap is using its database on corporate and industry group climate change policy engagement to track the evolution of their positions over time. This will be compared against the company’s own reviews of these industry groups over the same period. The following section uses BHP as an example of this.

B.4 InfluenceMap’s Assessment of BHP

Assessment of BHP's Disclosure

The following summarizes InfluenceMap’s assessment of BHP’s 2019 Industry Association Review.

Has the company been transparent in disclosing its own climate policy positions and influencing activities? BHP’s Industry Association Review discloses only broad positions on primarily high-level or non-binding policy issues. It does not contain a breakdown of the company’s positions on specific items of regulation and legislation or what actions the company has taken to influence these either directly or through its industry groups.

Has the company been transparent in disclosing its industry groups’ climate policy positions and influencing activities? BHP has not been transparent in disclosing its industry groups’ climate policy positions and influencing activities. BHP appears to have mentioned most of the key industry groups to which it retains membership that are influencing the climate agenda. However, InfluenceMap finds BHP's overall reviewing process to be highly selective in terms of the data-points used to judge the misalignment of its industry groups’ policy engagement practices.

Has the company been transparent in disclosing and consistently applied its alignment assessment process? BHP has explained in some detail the methodological process behind its evaluation of (mis)alignment. However, the review has not consistently disclosed how this evaluation process has been applied to each industry group and policy issue. As such, it is hard to ascertain why BHP has determined certain organizations to have misaligned positions but not others, despite similarities in policy engagement positions and practices.

Has the company been transparent in disclosing a framework for addressing misalignments? BHP discloses a framework with a number of different steps for addressing material differences between its position and the positions of its industry groups on climate. It also sets out which steps it will take with different industry groups. However, with the emphasis being on private measures between BHP and its industry groups, such as communicating with a group’s board, it is unclear to what extent BHP plans to robustly and transparently report on them.

B.5 Assessment of BHP’s Progress on Policy Alignment

Table 22 assesses BHP’s broader processes for addressing the misalignment of its industry groups against investor expectations on climate.

Issue

Score

Identify & Assess

BHP appears to selectively pick the data points used to make its alignment assessments. It focuses on high-level climate statements from its industry groups and does not identify the sometimes-substantial evidence of detailed policy engagement activities that appear to contradict science-based guidance from the IPCC on delivering Paris Agreement goals. BHP’s assessment therefore appears to significantly underplay the misalignment between its stated support for delivering on the Paris Agreement and the ongoing policy engagement activities of its industry groups.

Monitor & Review

While BHP has delivered several reviews and updates on its industry groups at the request of its shareholders, its processes for monitoring the detailed policy engagements of its industry groups appear not to have captured numerous examples of continued negative engagements during the timeframe of the review.

Act

While BHP has disclosed that it has taken steps to address misalignments identified in its 2017 review, InfluenceMap’s analysis shows that these actions have not yet materially reformed policy engagement practices of key industry groups. BHP has not committed to escalating steps to significantly address these ongoing misalignments and, in the case of the MCA, suggests that previous misalignments are instead resolved.

Table 22. InfluenceMap’s assessment of BHP’s processes for addressing misalignments with its industry groups.

As a measure of BHP’s progress towards reforming its industry groups, InfluenceMap’s assessment of the climate policy engagement of BHP’s key industry groups since 2017 is shown in Table 23. The hyperlinks go back to the profile of each group on InfluenceMap’s website.

X – Misalignments identified, further action to address misalignments committed X – Industry group left ✓ – Misalignments determined to be resolved Table 23. BHP’s progress towards reforming its industry groups’ misalignments against investor expectations on climate.