Analysis shows the new green claims of the biggest oil and gas companies are undermined by their support for trade associations that actively obstruct climate policy.
A report from InfluenceMap published today, and drawn from over 10,000 evidence points, demonstrates the stark contradictions in stated claims of the oil and gas companies and the obstructive lobbying activities of the trade associations they actively support and finance.
The research analyses three key strands of climate policy – the carbon tax, emissions trading and greenhouse gas emissions regulations – and intersects the public stance of the oil majors with the actions of the trade bodies they have close links to. The findings show Shell demonstrating the biggest disconnect between rhetoric and action, followed by French firm Total. BP, Chevron and Exxon, however, appear to be as equally obstructive as their trade associations with misalignment factors close to zero.
Arne Lööw, Head of Corporate Governance, Fourth Swedish National Pension Fund/ AP4 notes: “It is not in investors’ interests to have companies funding and supporting businessorganizations delaying the implementation of effective climate legislation. We need greater regulatorycertainty, and an effective carbon price signal to shift capital markets, support investment decisions,and reduce portfolio carbon risk.”
The report comes as leading energy groups this week launch a range of measures through the Oiland Gas Climate Initiative (OGCI), as a way of improving their image in the face of longstandingcriticism of their business practices ahead of UN COP 21 climate talks in Paris. The big Europeancompanies behind the OGCI – notably oil majors Shell, Total and BP – will come under ever greater scrutiny, as the distance between the companies’ professed positions and the realities of the lobbyingactions of their trade bodies grows ever starker.
The results raise serious questions about the oil companies’ role in the climate debate. Can Shell, Total and BP’s commitment to a climate solution be taken at face value? Are they hiding behind unaccountable trade bodies to subvert and delay progress on the details of climate legislation? And is it time they withdrew from the trade bodies in question, if they are as serious on climate action as they now claim?
Dylan Tanner, InfluenceMap, Executive Director notes: “Companies like Shell appear to have shifted their direct opposition to climate legislation to certain key trade associations in the wake of increasing scrutiny. Investors and engagers need to be aware that these powerful energy and chemicals-sector trade bodies are financed by, and act on the instruction of, their key members and should thus be regarded as extensions of such corporate-member activity and positions."
The InfluenceMap report findings come in the wake of criticism of the likely motivations behind Shell’s creation of the Energy Transitions Commission launched in late September this year and its high profile departure from the Corporate Leaders Group. Shell is also on the on the board of CEFIC (the powerful European chemicals trade body) that recently lobbied aggressively against much needed reform of the European Emissions Trading Scheme, critical for an effective price on carbon. Shell has also been lobbying against energy efficiency and renewable energy targets and regulation in the European Union, which raises questions about the consistency of its own messaging.
The report also highlights the aggressive rhetoric and action being taken by trade associations against key global climate legislation. It ranked the most obstructive of such trade groups globally as the American Petroleum Institute (API) whose CEO believes the UNFCCC’s COP21 process in Paris is driven by “narrow political ideology”. French oil giant Total, also has its executive Jean-Michel Lavergne on the board 4 of this powerful US body.
Anthony Hobley, CEO of Carbon Tracker said: "If oil and gas companies calling for a price on carbon want to be taken seriously it is imperative that they commit both to calling on governments to implement such a policy and at the same time ensuring that all their lobbying is 100 percent consistent with this objective. This is a strong line to take that has to be held accountable by investors, shareholders, governments and the public."
“Any company not able to do this should not be taken seriously when calling for such action in relation to climate change and such a call should then be seen for what it is, a cynical attempt to manipulate public opinion and create the perception amongst shareholders that the company is taking the issue of climate change seriously."