(MENAFN- 3BL) May 23, 2024 /3BL/ - A new benchmark analysis of 15 major U.S. automotive companies reveals inconsistencies between companies' public climate commitments and their direct and indirect lobbying practices. This contradiction poses a significant risk to their market position as the global shift towards zero-emission vehicles (ZEVs) accelerates, particularly with countries like China leading the way.
The assessment, Driving Change: Evaluating Automotive Companies' Climate Policy Advocacy , finds that while these companies are deeply involved in climate policy engagement and are taking steps to reach their climate commitments by advocating in support of certain climate policies, nearly a quarter of the automotive companies assessed have not demonstrated commitment to Paris-aligned climate policies. At the same time, they and their trade associations have engaged in practices that are actively undercutting the policies that are key to the shift to clean transportation-and that they've committed to supporting.
The good news is that some companies in this sector and other high-emitting sectors are beginning to take notable steps to hold their trade associations accountable, while more investors hold companies accountable. The analysis points to Ford's decision to leave the Truck and Engine Manufacturers Association over lobbying against a proposed Environmental Protection Agency rule to reduce carbon emissions in heavy-duty trucks. General Motors disclosed it is taking steps to influence the stances of lobbying groups, including the Alliance for Automotive Innovation and the National Association of Manufacturers, on policies, such as the Inflation Reduction Act.
The Ceres analysis provides several recommendations for responsible policy engagement including:
Directly advocate for policies that will help meet climate pollution reduction targets. Continue to advocate indirectly through trade association memberships aligned with the organization's climate goals. Minimize inconsistency in climate advocacy across different regions.
This is the third sector analysis on responsible policy engagement practices released by Ceres, following analyses of the banking and electric utilities sectors. Responsible policy engagement consistent with climate science is an essential expectation of the Ceres Ambition 2030 initiative, which aims to decarbonize the highest emitting industries-electric power, banking, food, agriculture, oil and gas, steel, and transportation. These sectors contribute to about 80% of total U.S. emissions.
Since Ceres began advocating for companies to evaluate their lobbying practices in 2016, followed by two benchmark analyses of the S&P 100 companies, more companies have made strides to align their lobbying practices with their climate goals. Dominion Energy acknowledged that their trade associations have historically opposed climate policies, while Eversource, another energy company, left the American Gas Association as part of an effort to prioritize decarbonization. In March, it was reported in the media that at least 37 corporate members of the U.S. Chamber expressed concerns about the Chamber's climate policy position, citing conflicts with their own climate goals.
Additionally, advocacy in favor of Paris-aligned climate policies is a top priority for investors, who aim to reduce their portfolio risks from climate change and maximize the opportunities the energy transition presents. Just last month, 38.4% of Bank of New York Mellon Shareholders voted in favor of the company disclosing its direct and indirect lobbying. Ahead of this year's proxy season, a similar effort at Stride earned 49.5% shareholder support.
About the Ceres Accelerator for Sustainable Capital Markets
Ceres is a nonprofit advocacy organization working to accelerate the transition to a cleaner, more just, and sustainable world. The Ceres Accelerator for Sustainable Capital Markets aims to transform the practices and policies that govern capital markets by engaging federal and state regulators, financial institutions, investors, and corporate boards to act on climate change as a systemic financial risk. For more information, visit ceres and ceres/accelerator.
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