Welcome back to Connect the Dots, a monthly newsletter from ClimateVoice focused on the connection between companies, influence, and climate policy.
Connect the Dots is all about exploring the relationship between companies, the exercise of political influence, and the effect this has on passing (or defending) critical climate policy in the United States. So far we’ve examined why policy is so important, the ways that companies engage (or, more often, sit on the sidelines), and the impact of trade associations in obstructing action.
This month we’re looking at the growing divide between companies and their trade associations (such as the U.S. Chamber of Commerce) when it comes to climate policy advocacy. We’ll be digging into recent trade association audits conducted by both Microsoft and Unilever that reveal this rift, and taking a closer look at how and why it is so crucial for companies to step up beyond transparency and reporting into more active and vocal leadership when it comes to trade association climate policy misalignment.
Action Items
As a first step, urge your company to conduct a thorough trade association audit using established guidelines. Use this Engagement Sheet from Planet Tracker, which has suggested questions to ask company leaders.
Move beyond reporting: Download ClimateVoice’s Escape the Chamber ‘Escape Plan’ to learn how employees can help their employer leave the U.S. Chamber of Commerce and do more to lead on climate policy. Follow the action steps to get started and spur advocacy at work.
Bonus – Sign and share the LEAD Statement, urging companies to leverage their power and influence to accelerate climate policy progress.
The Big Picture
A Growing Climate Policy Divide Between Companies + Their Trade Associations
Unilever made headlines in March by pledging to leave trade associations that obstruct climate policy. But the trade association climate policy misalignment gap isn’t just one company’s concern. In February of this year, Planet Tracker released a report entitled Climate Transition Mismatch for Corporates and Trade Associations, which spotlights how company membership in trade associations is a “critical area of concern, particularly when corporate management teams claim to be supportive of lowering their carbon footprint but are members of associations that appear to be at odds with the goals set out in the Paris Agreement.” The report urges companies to closely scrutinize trade association memberships and take decisive action to address misalignments. (Here’s where trade association audits come in, which we’ll discuss in depth below).
The showdown between companies and trade associations such as the U.S. Chamber of Commerce is only intensifying. A recently published exposé from Politico’s E&E News reveals that at least 37 corporate members expressed concerns about the U.S. Chamber’s climate advocacy, with the division widening – especially given the Chamber’s recent lawsuit against the SEC over its climate emissions disclosure rules. It’s part of a long pattern of climate policy obstruction by the Chamber.
In October 2023, we saw the fight over California’s Climate Corporate Data Accountability Act (SB253) elevate the impacts of trade association misalignment, with the California Chamber of Commerce opposing the legislation along with the oil and gas lobby, and companies such as Microsoft, Salesforce, Apple and Google publicly supporting the climate disclosure law. This was a perfect example of how pro-climate companies can publicly lead on climate policy, breaking with opposing trade associations and ultimately helping to secure the bill’s passage. Unfortunately, the battle to ensure the implementation of strong climate disclosure rules is far from over.
According to a November, 2023 study by InfluenceMap, Net Zero Greenwash: The Gap Between Corporate Commitments and their Policy Engagement, a majority of companies espousing net-zero goals don’t support these pledges with climate policy advocacy (either through trade groups or directly). Given this stark reality, there is a critical opportunity for private sector leadership in catalyzing meaningful climate policy progress. We need all companies – and especially companies who have conducted trade association audits and definitively confirmed lobbying misalignment – to speak up more often and more forcefully in support of climate policy solutions. Silence on trade association obstruction and misalignment is complicity.
The Nitty Gritty
Trade Association Audits Represent A First Step Towards Greater Transparency – and Set the Stage for Responsive Action
In January of this year, Microsoft released a new trade association report entitled Sustainability Policy Alignment: US Trade Associations which assesses how U.S. trade associations align with Microsoft on climate policy positions. This kind of voluntary disclosure is a key first step in increasing transparency and assessing how trade associations are lobbying relative to a company’s own goals and positions. Companies such as Unilever and Microsoft who both recently conducted trade association audits deserve credit for taking this important step. However, what companies are doing to immediately address misalignment is the most important outcome of an audit.
As you’ll see from the graphic below drawn from InfluenceMap’s Microsoft’s Disclosure Scorecard: Detailed assessment of Microsoft’s climate policy engagement disclosure published in March, 2024, the U.S. Chamber of Commerce ranks lowest on InfluenceMap’s performance band and is misaligned with Microsoft’s overall climate policy goals. (Note: Trade associations are categorized below by InfluenceMap as having climate policy engagement that is aligned, partially aligned or misaligned with realizing a 1.5 degree Celsius goal as laid out by the Paris Climate Agreement).
Appendix A: Microsoft’s Industry Association Memberships, InfluenceMap: Microsoft Disclosure Scorecard, March 2024.
The critical question for companies to ask themselves when climate policy misalignment is confirmed is what action steps will be immediately undertaken in order to address this misalignment? If lobbying activities are not aligned with Paris climate goals, then immediate course correction is required. As Microsoft noted in their report, “Where there is misalignment, we will redouble efforts to engage with the trade association to drive closer alignment in their advocacy for a more sustainable future.” (However, it is important to note that while some companies have pursued a strategy of trying to change the U.S. Chamber from within, this strategy has completely failed, with the Chamber’s obstruction of climate policy progress only accelerating in recent years).
Microsoft is one of 10 known companies represented on the Chamber’s board that have disclosed climate policy disagreements with the trade group. As discussed above, this is a crucial first step in promoting transparency and moving toward leaving lobbying groups that are not aligned, but falls short when it comes to meaningful responsive action. Furthermore, in spite of Microsoft’s trade association audit which confirmed misaligning on multiple policy measures, Microsoft paid a whopping $276,325 in dues to the Chamber in 2023 (Source: Microsoft’s Public Policy Engagement, Advocacy and Trade Memberships), up 34% from dues paid in 2022. Incidentally, the Chamber was the only trade association to which Microsoft paid 6 figures in dues in 2023.
Unilever also conducted a recent trade association audit in order to assess whether trade groups were supporting or obstructing the development of policy, regulations and standards to reduce greenhouse gas emissions to net-zero. As a result of the audit’s findings, Unilever publicly threatened to quit trade associations that block climate policy, in particular noting it will sever ties with groups obstructing progress on Paris Agreement net-zero goals. The analysis includes specific follow up actions Unilever has committed to in order to press organizations to support climate policy. Unilever is also a rare example of a company that has left the U.S. Chamber of Commerce over its environmental policy lobbying track record.
For a Deeper Dive
Microsoft & Unilever: 2024 Trade Association Audits
Unilever’s Climate Policy Engagement Review (published March, 2024) |
Microsoft’s Sustainability Policy Alignment Audit: US Trade Associations (published January, 2024) |
Audit reviewed 27 of Unilever’s global industry associations, reviewing industry group positions and statements as well as their public record of activity in 2022-23. | Audit reviewed 11 climate policies, comparing Microsoft’s positions on the policies to the positions held by eight organizations that are active in U.S. climate policy. The U.S. Chamber had the greatest misalignment with Microsoft’s policy positions. |
As a result of the audit, Unilever pledged to leave trade associations that obstruct climate policy and to sever ties with groups obstructing progress on Paris Agreement net-zero goals. Unilever CSO Rebecca Marmot stated,”We want our associations to be catalysts for positive policy change, and if they can’t, then we reserve the right to withdraw our membership fees.” | As a result of the audit, Microsoft noted in the report: “Where there is misalignment we will redouble efforts to engage with the trade association to drive closer alignment.” |
Audit includes a specific follow up action plan, noting they will “work with industry associations on practical and realistic actions to ensure they improve their policy positions and practices.” Unilever also notes they will conduct a follow up review and “will include updates on the actions taken.” | No specific follow up actions are listed in the report. |
Unilever left the U.S. Chamber of Commerce over its climate and environmental positions according to a Guardian investigation in 2017. | Microsoft serves on the U.S. Chamber of Commerce Board of Directors and paid over $276K in dues in 2023. |
Companies and employees should take note in particular of the resulting actionable outcomes of these recent trade association audits, and aim to follow best practices demonstrated in Unilever’s trade association analysis. According to Unilever’s report, the company reviews its membership of industry associations on an annual basis and is committed to conducting a full, global industry association review every three years. Most importantly, the report explicitly calls for action, urging “our most influential industry associations to be more actively engaged in promoting outcomes and policies that can help the economy – and Unilever – to decarbonise faster,” and for trade associations to “work constructively with policymakers to implement policies that will deliver real emissions reductions.” Unilever is also advocating for policy action including nature protections, support for renewable energy and carbon pricing as part of its new Climate Transition Action Plan.
More than ever, companies should be leading efforts to enact ambitious climate policy at speed and scale. Companies can take the lead by:
- Publicly distancing themselves from the U.S. Chamber’s positions and statements that do not align with strong climate action and leadership;
- Consistently and forcefully lobbying for bold and just climate policies at the federal, state, and local levels;
- Aligning political contributions with climate leadership and action; and
- Leading or joining pro-climate coalitions in advocating strongly for pro-climate policies.
The key takeaway? Companies continue to exert significant influence on climate policy whether through their trade associations or through direct lobbying. Companies have an immediate responsibility to take action to address trade association misalignments: through transparency and auditing as a first step, but more critically through leaving trade associations that are out of step with climate policy goals and through actively and vocally leading the charge on much-needed meaningful climate policy progress.
Coming soon...
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