Pilot Studies Assessing CA100+ Companies Using the Global Standard on Responsible Climate Lobbying

A LobbyMap Investor Briefing

2022

Major companies in the oil & gas, steel, and road transport sectors are falling short of strengthened investor expectations on responsible climate lobbying.

Following the launch of the Global Standard on Responsible Climate Lobbying, InfluenceMap committed to undertake several pilot studies focusing on companies within key sectors targeted by the Climate Action 100+ initiative: Oil & Gas (Nov 2022); Steel (July 2022); Road Transport (May 2022).

These pilot studies integrate indicators from the Global Standard alongside the core assessments from InfluenceMap's LobbyMap platform to provide a thorough examination of company commitments, governance, real-world lobbying and disclosures on climate change policy engagement.

The analysis shows a clear lack of governance and oversight processes from companies to demonstrate to investors that they are effectively monitoring and reviewing alignment between their climate policy engagement and the 1.5°C goal of the Paris Agreement.

Oil & Gas Sector (November 2022)

This pilot study focused on the 40 companies on the CA100+ focus list categorized as 'Oil & Gas' or 'Oil & Gas Distribution' (excluding Gazprom and Lukoil). These companies include 15 headquartered in North America, 10 in Asia, 9 in Europe, 3 in Oceania, 2 in South America and 1 in Africa.

Disclosure Assessment: Only 3 companies - BP, Shell, and Marathon, have a clear commitment to align their direct and indirect climate policy engagement with the 1.5⁰C goal of the Paris Agreement, and to implement governance measures to meet this expectation. Nearly half of the companies (48%) have not met any of the criteria assessed under the Disclosure Assessment.

Alignment Assessment: While a small number of CA100+ oil and gas companies are showing indications of aligning their direct advocacy with the goals of the Paris Agreement in some areas, most continue to engage on climate-related policy with positions that are opposed to ambitious policy outcomes. Nearly 90% of CA100+ oil and gas companies are also a member of at least one industry association with climate policy engagement misaligned with the Paris Agreement (ranked D or below on InfluenceMap's database).

Review Assessment: 19 out of 40 CA100+ companies in the oil and gas sector have published a review of their climate policy engagement, more than any other sector. However, all companies fall considerably short of investor expectations in this area, with companies headquartered in North America performing particularly poorly across the criteria tested. Over half of the CA100+ oil and gas companies have failed to publish a review of their climate policy engagement practices at all.

Steel Sector (July 2022)

This pilot study focused on the 8 CA100+ steel companies: ArcelorMittal, BlueScope Steel, China Steel, Nippon Steel, POSCO, Severstal, SSAB, thyssenkrupp.

Disclosure Assessment: ArcelorMittal is the only company with a clear commitment to align its direct and indirect climate policy engagement with the 1.5⁰C goal of the Paris Agreement, and to implement governance measures to meet this expectation.

Alignment Assessment: All 8 CA100+ steel companies continue to engage negatively on climate policy, either directly and/or via memberships to industry associations. In particular, the majority of the steel sector's engagement on climate policy appears to be focused on market-based measures such as carbon pricing policies, which it generally opposes. The research identifies comparatively limited engagement on other supporting policy mechanisms which may be required to enable a net-zero transition in the steel sector.

Review Assessment: Only 1 of the 8 companies has published a review of its climate policy engagement practices – ArcelorMittal - indicating a lack of transparency across the CA100+ steel sector to demonstrate to investors that they are effectively monitoring and reviewing alignment between their climate policy engagement and the 1.5°C goal of the Paris Agreement.

Road Transport Sector (May 2022)

This pilot study focused on the 14 CA100+ road transport companies: BMW, Ford, General Motors, Honda, Mercedes-Benz, Nissan, PACCAR, Renault, SAIC, Stellantis, Suzuki, Toyota, Volkswagen, Volvo.

Disclosure Assessment: Over half of the companies have not demonstrated to investors that they have internal commitments to align their climate policy engagement with the 1.5⁰C goal of the Paris Agreement, or that they have implemented adequate governance measures to meet this expectation from investors.

Alignment Assessment: All 14 companies continue to obstruct or undermine ambitious climate policy, either directly and/or via memberships to industry associations acting on their behalf. While some companies have shown progress in their direct advocacy in recent years, notably Volkswagen, the industry as a whole continues to hold back key regulations to reduce GHG emissions from the transport sector.

Review Assessment: Only 5 companies have published a review of their climate policy engagement practices, which all fall considerably short of investor expectations. As a result, all 14 companies have failed to identify and take action on misalignments with key industry associations obstructing ambitious climate policy counter to the goals of the Paris Agreement.