Top European firms warned over lobbying against stronger climate policy

A group of investors worth $2trn has urged 55 major European businesses to review their relationships with organisations with lobbying practices "inconsistent" with the goals of the Paris Agreement.

It comes after a leaked document in September suggested that BusinessEurope was planning to “oppose” greater EU ambition on climate policy.

Investors such as the Church of England Pensions Board have subsequently sent 55 large companies a set of “investor expectations” outlining best practice on lobbying.

A letter to the chair of each company states: “We would ask you to review the lobbying positions being adopted by the organisations of which you are a member. If these lobbying positions are inconsistent with the goals of the Paris Agreement, we would encourage you to ensure they adopt positions which are in line with these goals.

“More generally, we would ask you to ensure that your lobbying practices align with the “investor expectations” document you have been sent, and that you are transparent about your own policy positions and how you ensure these are implemented in your direct and in-direct lobbying activities.”

Financial risk

The letter outlines the regulatory, economic and reputational risks that investors could face if companies lobby against climate change action. “Long-term investors have a clear interest in the Paris Agreement being implemented to support the necessary transition to a low-carbon global economy,” Stephanie Pfeiffer, chief executive of the Institutional Investors Group on Climate Change (IIGCC), explained.

“Shareholders should rightly expect companies in which they invest to advocate for the climate policy required for this to happen.”

Investors are increasingly recognising the financial sense to integrate climate change considerations into the investment process, decision making and dialogue with companies in with they invest. Earlier this month, a group of 161 investment firms with more than €21trn in collective assets under management called on pension fund managers to factor climate-related risks into their planning processes.

This came after a coalition of almost 400 investors with $23trn in collective assets pledged to step up its climate action plans in a bid to help the global finance sector meet the aims of the Paris Agreement.

George Ogleby

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