This briefing is for investors, corporations, policymakers, the media, and other interested stakeholders. Leveraging the LobbyMap.org dynamic knowledge base, it is designed as a resource on the passage of Paris-aligned climate policy that is at risk of being weakened or undermined by oppositional corporate and industry influence.
Update July 28 2022 — On July 28th, Senators Manchin and Schumer appeared to reach an agreement on a reconciliation bill containing climate measures. The briefing available for download at this page will provide updates on corporate engagement following the initial release of this analysis, including instances of companies and industry associations responding to news of negotiations ending on July 15th and recommencing on July 28th.
The Build Back Better (BBB) Act, or “Reconciliation Bill,” was introduced during the 117th Congress of the United States as a social and climate spending package. Subject to extensive deliberation among policymakers, the BBB Act did not receive the full support it needed in the US Senate, effectively ending the debate in early 2022. However, discussions in June and July 2022 between Senators Joe Manchin (D-West Virginia) and Chuck Schumer (D-New York) indicate the potential for a new package containing climate policy provisions.
This alert and the supplemental briefing summarizes all public evidence of engagement on the climate provisions in the original BBB Act, as of July 8th, 2022, by the 400+ companies and 175+ industry associations assessed by InfluenceMap. The information below aims to provide context for investors seeking to engage companies on their positions on a new bill. Should a bill be introduced, the information will be updated and recirculated to reflect new engagement.
The 2021 Reconciliation Bill spun out of President Biden’s American Jobs Plan. It was debated by Congress beginning in September 2021 alongside the separate Infrastructure Investment and Jobs Act, which was signed into law in November 2021. While a version of the BBB Act passed the House of Representatives in November 2021, Senator Manchin revoked his support for the final package; by February 2022, the bill appeared dead. The following climate provisions were at some point considered in the context of the reconciliation bill:
An economy-wide carbon pricing mechanism, debated as a possible pay-for mechanism, which was never adopted into the bill
A methane fee assessed on oil and gas production and transmission
The Clean Electricity Performance Program (CEPP), a penalty-reward structure to catalyze clean energy procurement by utilities, which developed from discussions of a Clean Energy Standard
Various tax incentives for zero-emitting electric generation and grid improvements
An electric vehicle (EV) tax credit that provides $7,500 per vehicle, and a higher credit for union-made EVs
Analysis by the Rhodium Group in September 2021 found that the climate provisions in the Build Back Better Act as originally proposed could have cut US emissions by 830-936 million tons in 2030 compared to current policy, an amount estimated to account for at least half the emissions gap necessary to achieve the US' Nationally Determined Contribution (NDC) to the Paris Agreement.
The details of a new climate package remain unclear, and the extent of emissions reduction potential depends on the contents of the bill. A new climate package could be announced the week of July 11th, leaving a narrow window for approval with congressional recess approaching in August 2022.
The recent ruling by the U.S. Supreme Court in West Virginia V. EPA has amplified the need for climate legislation. Renewed consideration of a climate “standalone” bill could represent a final opportunity to pass federal climate policy in the US, without which the US is highly unlikely to meet its emissions reduction targets. Over the next few weeks, corporate influence will be crucial in supporting the finalization of a bill and, after its introduction, ensuring that it is not walked back or weakened.
Please see supplemental briefing available for download from this landing page for a detailed overview of corporate engagement with the BBB Act, leveraging LobbyMap's analysis of over 400 companies and 175 industry association. Key findings include:
Only 30 of the S&P 100 companies engaged on climate in the bill during previous negotiations.
▪ 14 of those 30 companies held clearly supportive positions, while 16 engaged with mixed or negative positions.
Broadening to InfluenceMap's wider and global database of companies, roughly 20% (75) of the companies assessed by InfluenceMap globally showed evidence of advocacy on climate in the bill. Of these 75,
▪ Half (38 companies) were supportive.
▪ 14 showed mixed engagement. This could mean the company supported some provisions while opposing others, or that their support was highly conditional.
▪ 17 showed negative engagement. This grouping includes 3 utilities as well as Tesla due to communications from CEO Elon Musk. It also includes 13 companies that appeared to lobby against the raised corporate tax rate without otherwise engaging on climate in the bill.
▪ Several had unclear positions, for example in statements that did not clearly relate to the bill.
At the same time, US industry associations, including major cross-sector trade associations like the US Chamber of Commerce, were highly actively opposed to the Build Back Better Act.
▪ 72% of the S&P 100 are members of either the US Chamber or the National Association of Manufacturers, two groups which campaigned heavily against the reconciliation bill.
This analysis highlights several leverage points that investors and other stakeholders may consider in order to increase positive engagement, while also identifying negative actors and pressuring them to cease negative influencing.
▪ All major US companies should be asked to clarify their positions on the Build Back Better Act in relation to their own climate commitments and the current political and regulatory context in the US.
▪ Positive companies may be asked to clarify and reaffirm their support, and to engage the public affairs functions of their businesses to facilitate this. Senior management and CEO messaging is also a highly powerful channel through which companies can engage.
▪ Companies whose only advocacy focused on corporate taxes – or whose engagement was otherwise unclear, which may indicate no position on climate at all – might be encouraged to publicly clarify a supportive position on the bill, including directly advocating to policymakers and deploying senior management toward this aim. Similarly, mixed companies can come forward with what they do support.
▪ In conversations with companies that are oppositional to the bill, investors might consider asking how the company's position on Build Back Better aligns with its climate program or net-zero commitment.
▪ Corporate members of industry associations with negative advocacy can engage with these associations, either individually or collectively, to address these groups' position on the bill. Depending on the association, this may mean encouraging the group to refrain from engaging with the bill as there is no consensus on it among its members, or simply ensuring that opposition to pay-for provisions does not derail the climate measures at play.