Investors take next step to promote responsible climate change lobbying

MEDIA RELEASE

INVESTORS TAKE NEXT STEP TO PROMOTE RESPONSIBLE CLIMATE CHANGE LOBBYING

 -   AP7, BNP Paribas Asset Management and the Church of England Pensions Board partner with Chronos Sustainability to identify hallmarks of responsible corporate climate change lobbying

London, Paris, Stockholm, 15 June 2020:  AP7, BNP Paribas Asset Management, and the Church of England Pensions Board are supporting the development of a framework in 2020 that will enable investors to assess whether and to what extent corporate lobbying is aligned with the goals of the Paris Agreement on Climate Change. Building on work undertaken in recent years by stakeholders on several continents, the primary aim of this project, instigated by the investors and coordinated by Chronos Sustainability, is to develop a framework for assessing corporate lobbying in a relevant, systematic and credible manner. Ultimately, the goal is providing a means by which companies, investors and other stakeholders can ensure that all efforts – whether delivered at first-hand or through an intermediary such as a trade association – are directed towards activities that positively support attainment of the Paris Goals.

Helena Viñes Fiestas from BNP Paribas Asset Management, said: “As shareholders, we expect that when companies engage with public policymakers they will support cost-effective policy measures to mitigate climate change risks and support an orderly transition to a carbon-neutral economy by 2050 at the latest. In recent months, BNPP AM has engaged with companies, and filed resolutions, to request greater transparency on their lobbying practices and to be consistent with the goals of the Paris Agreement. This project will help us further refine our dialogue with companies, as how they influence policymaking can help avoid catastrophic consequences – not least financial.”

 The project will identify the variety of ways in which companies and their proxies exert influence on the policy process – in support of or seeking to defuse or delay climate-related regulation – and define how these activities should be managed and overseen by companies. The research will also assess gaps in current practitioner approaches to lobbying, and will develop a means for analysing, assessing and comparing corporate practices on lobbying. 

Central to this work is the development of a framework allowing investors to assess company lobbying practices and processes in a systematic, consistent and relevant manner. This framework – which will draw on input from a wide range of stakeholders and  include recommendations designed to feed into the Transition Pathway Initiative (TPI) and wider engagement processes – will better enable investors to identify those companies that lobby positively in line with the Paris Agreement; ones with robust lobbying governance and oversight processes; and those companies that act effectively when trade associations or other bodies behave in ways running counter to the company’s own climate change commitments. 

Charlotta Dawidowski Sydstrand, Sweden’s AP7 Pension Fund, said: “There is an urgent need for action to address climate change risks as a material investment issue for current and future generations. AP7 has identified that weaknesses in current climate policy globally pose a risk to the long-term value growth of our pension portfolios. We find it unacceptable that at this point in time companies still counteract ambitious climate policy, either directly or through their business organisations. We are championing this research project in order to provide greater understanding of what good practice looks like when it comes to lobbying on climate issues.”   

There have been significant advances in this area over the past year, with companies increasingly responding to shareholder concerns by committing to undertake reviews of their own climate lobbying processes. Companies that have already embarked on such processes acknowledge that tighter governance of these practices provides them with greater understanding of what is being targeted with their tacit endorsement, and also ensures better value for money in deploying their resources in a way that is more closely aligned with their long-term business strategy. The project aims to bring additional understanding to and improve the role of corporations in the policymaking process. It is intended that the framework will be ready by the autumn, and feed into preparation for 2021 engagement plans as well as COP26 in Glasgow.

 The development of the framework – which seeks to build on and complement the work conducted by InfluenceMap and others – will be led by Dr Rory Sullivan of Chronos Sustainability, supported by Dr Richard Perkins of the London School of Economics and Political Science. The project’s governance also draws on the insights of Ceres, IIGCC, and PRI.

Clare Richards, Church of England Pensions Board, said: “Misaligned and misleading corporate lobbying practices undermine the ability of governments to act on climate change and meet the goals of the Paris Agreement. The stakes are high, and it is right that investors are working with and challenging companies to clean up their lobbying activities and demonstrate better practice. We are delighted to be partnering with these leading investors on this vital issue, and look forward to drawing on feedback from companies, civil society, policymakers and other interested parties when the consultation opens in late June 2020.”

ENDS

For further information

Amanda Williams, Director of Communications, Chronos Sustainability

amanda@chronossustainabilty.com

+44 7534 702797

 Notes to editors:

1.     About the investors:

a.     AP7 is a government agency which has the task of managing premium pension funds for the Swedish people. AP7 manages the pensions of more than four million Swedes and has assets under management of EUR 60 bn. As a universal owner AP7 has investments in nearly 3000 companies around the world. For more information please visit www.ap7.se/english/

b.     BNP Paribas Asset Management is the asset management arm of BNP Paribas, one of the world’s foremost financial institutions, and offers high value-added solutions to individual savers, companies, and institutional investors. BNP Paribas Asset Management has assets under management of EUR 408 billion* (as at 31 March 2020), with more than 500 investment professionals and almost 500 client servicing specialists, serving individual, corporate and institutional clients in 72 countries. * EUR 553 billion of assets under management and advisory as at 31 March 2020. For more information please visit bnpparibas-am.com

c.      The Church of England Pensions Board provides retirement services for people who have worked or ministered for the Church of England. Our pension schemes have over 40,000 members, made up of around 25,000 stipendiary clergy, and over 15,000 others. Our pensions investments total more than £2.8billion across all schemes. We serve over 2,500 people through our housing and charitable services. For more information please visit www.churchofengland.org/pensions-board

2.     About the researchers: 

a.     The research will be led by Dr Rory Sullivan and Dr Richard Perkins.  Dr Rory Sullivan is Visiting Professor in Practice at the Grantham Research Institute on Climate Change and the Environment at the LSE, Chief Technical Advisor to the Transition Pathway Initiative, and Co-Founder and Director of Chronos Sustainability. Dr Richard Perkins is Associate Professor of Environmental Geography in the Department of Geography and Environment at the London School of Economics and Political Science (LSE). 

b.     Chronos Sustainability is an international team of professionals with a track record of delivering transformative, systemic change in the social and environmental performance of key industry sectors. Chronos works in partnership with institutional investors, industry networks, companies, governments, regulators and civil society organisations on issues as diverse as climate change, responsible investment, oceans management, animal welfare and human rights.  

3.     The key outputs from this project will be:

o   A briefing paper that sets out the case for Paris-aligned lobbying. This will include discussion of the implications of non-aligned lobbying and investors' high-level expectations of companies. A range of stakeholders will be invited to feedback on this as part of a consultation process that will commence in June 2020.

o   A set of principles and associated indicator framework for responsible corporate lobbying on climate change. This will set out investors' expectations in detail and will translate these into an indicator framework that can be used to assess/benchmark companies.

o   A high-level stakeholder statement that sets out expectations on responsible lobbying.

o   Recommendations to the Transition Pathway Initiative on specific indicators that may be added to the Management Quality assessment.

4.     An Advisory Group has been established to oversee the project. Its membership comprises the project sponsors (AP7, BNP Paribas Asset Management, and the Church of England Pensions Board) plus nominated representatives from each of Ceres, IIGCC, Influence Map, London School of Economics, and PRI. This group will advise on the direction – scope, objectives, deliverables – of the project, and will review and comment on the major outputs/deliverables from the project.

5.     This research project builds on engagement work that IIGCC investors have undertaken since 2018 to specifically focus on the issue of corporate climate lobbying, which draws on the analysis of Influence Map and the Transition Pathway Initiative, and which is also being replicated by Ceres. 

This document is for use by journalists and media professionals only. 

This document is a not a financial promotion and is not investment advice. Unless otherwise attributed the views and opinions expressed are those of Chronos Sustainability at the time of publication and are subject to change. 

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