How Companies Hide Behind Trade Organizations to Influence Climate Policy
Trade and business associations are major actors in both business and public policy in the U.S. These associations provide many benefits to their member companies, and one of the most important is the leverage they provide for influencing policy through political activities such as campaign contributions, lobbying of elected officials and issue advertising.
Since climate change, and policy responses to climate change, can have significant implications for business, it's not surprising that trade associations have been deeply engaged in climate policy discussions. And as a 2013 Union of Concerned Scientists (UCS) report revealed, the impact of trade association engagement has often been to block meaningful climate action or misrepresent climate science.
Holding member companies accountable for the activities of their associations is not easy. As tax-exempt non-profit organizations, trade associations are not required to publicly list their membership or boards of directors—and member companies can take advantage of limited corporate-disclosure laws to engage in political activities through trade associations without much scrutiny from government, investors or the public.
In an effort to shed light on the relationship between companies and their trade associations on climate policy, UCS partnered with CDP (formerly the Carbon Disclosure Project), a non-profit organization that administers an annual climate reporting questionnaire to more than 5,000 companies worldwide, at the request of 722 institutional investors representing $87 trillion in invested capital.
Starting in 2013, the CDP questionnaire began asking whether companies were members of trade groups and, if so, whether they agreed with these groups' climate policy positions, as documented in the 2013 UCS report Assessing Trade and Business Groups' Positions on Climate Change.
The results show that many companies are not yet willing to be transparent about their political activity through trade associations.
- More than half of the companies who received the questionnaire opted out of participating, and only 33 percent were willing to make their responses public. Non-participants included corporate giants such as Apple, Amazon, Comcast and Facebook.
- Some 40 percent of companies responding publicly acknowledged that they could influence policy through their trade association. Yet, of companies listed on publicly available board membership lists for four large trade associations, a majority failed to acknowledge their board memberships on the survey.
Many companies indicated that they do not agree with the climate policy positions of their trade associations.
- Nine of 15 responding companies that reported being board members of the National Association of Manufacturers (NAM) stated that their positions on climate policy were "mixed" or "inconsistent" compared with NAM's position.
- Several other major U.S. trade associations, including the Edison Electric Institute, the American Petroleum Institute and the American Chemistry Council, received multiple "mixed" or "inconsistent" responses from board member companies.
- When companies were asked if they had attempted to influence the climate positions of trade associations that they belonged to, however, responses suggested that many companies—especially smaller companies—do not feel they are able to influence their trade groups’ climate change positions.
These findings raise the question of which actors are actually shaping the policy positions and agendas of trade associations.
The public deserves to know who is influencing policy decisions on critical issues like climate change. To bring needed transparency to the business community's political activities, the report outlines a set of recommendations for both private and public sector actors:
- The Securities and Exchange Commission and the Treasury department should make rules that require disclosure of political activities by publicly traded companies and tax-exempt "social welfare" groups.
- Congress should approve the DISCLOSE Act, or similar legislation, to enhance disclosure of indirect political contributions.
- Companies should push trade associations to accept climate science and support policies that will result in meaningful carbon emissions reductions. Where companies and their associations differ about climate policy, companies should publicly state their differences, try to influence their associations' positions, and if differences are irreconcilable, leave the associations. And investors should use their influence to pressure companies to take such actions.
Visit EcoWatch’s CLIMATE CHANGE page for more related news on this topic.
People across New England witnessed a dramatic celestial event Sunday night.
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By David Reichmuth
Over the last month, I've seen a number of opinion articles attacking electric vehicles (EVs). Sadly, this comes as no surprise: now that the Biden administration is introducing federal policies to accelerate the roll out of electric vehicles, we were bound to see a reaction from those that oppose reducing climate changing emissions and petroleum use.
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Trans Canada Trail and AccessNow partnership for AccessOutdoors / Trails for All project. Mapping day at Stanley Park Seawall in Vancouver, British Columbia with Richard Peter. Alexa Fernando<p>This partnership also comes at a time when access to outdoor recreation is more important to Canadian citizens than ever. <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/200527/dq200527b-eng.htm" target="_blank" rel="noopener noreferrer">Studies from the spring of 2020</a> indicate that Canadian's <a href="https://www.bnnbloomberg.ca/moneytalk-mental-health-during-covid-19-1.1567633" target="_blank" rel="noopener noreferrer">mental health has worsened</a> since the onset of social distancing protocols due to COVID-19. </p><p>The <a href="https://www.mayoclinic.org/diseases-conditions/coronavirus/in-depth/safe-activities-during-covid19/art-20489385" target="_blank" rel="noopener noreferrer">Mayo Clinic</a> lists hiking, biking, and skiing as safe activities during COVID-19. Their website explains, "When you're outside, fresh air is constantly moving, dispersing these droplets. So you're less likely to breathe in enough of the respiratory droplets containing the virus that causes COVID-19 to become infected."</p><p>TCT leadership took this into consideration when embarking on the accessibility project. McMahon explains that there has never been a more important time to bring accessibility to the great outdoors: "Canadians have told us that during these difficult times, they value access to natural spaces to stay active, take care of their mental health, and socially connect with others while respecting physical distancing and public health directives. This partnership is incredibly important especially now as trails have become a lifeline for Canadians."</p><p>Together, these organizations are paving the way for better physical and mental health among all Canadians. To learn more about the TCT's mission and initiatives, check out their <a href="https://thegreattrail.ca/stories/" target="_blank">trail stories</a> and <a href="https://thegreattrail.ca/wp-content/uploads/2021/01/TCT_2020-Donor-Impact-Report_EN_8.5x14-web.pdf" target="_blank">2020 Impact Report</a>.</p>