AN INVESTOR ENQUIRY: HOW MUCH BIG OIL SPENDS ON CLIMATE LOBBYING
A summary of climate lobbying resolutions and engagement by investors provided by Walden Asset
Management, was released in January 2016. Timothy Smith, Director of ESG Shareowner
Engagement at the firm said: “this is a critical moment for investors to press oil and gas companies to
be transparent about their lobbying expenditures and assess whether their lobbying dollars are spent
to maintain the status quo on climate change policy”.
Walden notes in a further release on March
17th 2016
that "corporate lobbying disclosure (not restricted to climate lobbying) remains a top
shareholder proposal topic for 2016" with shareholder resolutions filed with 50 companies by 66
institutional and individual investors.
Why investors are concerned about corporate lobbying
Many of the resolutions listed above demand that the corporations disclose their activities on
lobbying, information that clearly needs to be accompanied by an indication of the use shareholder
funds for these activities. So far disclosure by companies on specific policy influencing activity and
spending (in climate and other areas) has been limited. US law, (e.g. the US Lobby Act of 1995)
requires disclosure of spending by corporations on political donations and through registered
lobbyists. However the precise reason for this spending is generally not clear from these disclosures
and the total amounts are relatively small. For example, Exxon disclosed spending of under $15m
according to Open Secrets
for all its US lobbying activities, a relatively small amount considering its
position as the world's largest fossil fuel company. The EU Transparency Register is a voluntary
system, with no penalties for poor or inaccurate disclosure and does not require disclosure of
activities like advertising and interactions with regulators. Regulations in other major economies are
even less onerous.
However, a detailed view of spending is of prime importance to gauge corporate thinking as it reveals
what the company views as lobbying and its positions on policy areas. For example, is the company
trying to ring fence the definition to mean political donations, or does it follow the UN's protocol on the
subject
, which covers a broader range of activities including contributions to trade associations,
advertising, PR and all interactions with regulators? (InfluenceMap's system is based on this guide
and measures corporate support for ambitious climate policy across a range of influencing areas).
Companies that neglect to disclose these activities as lobbying are likely to be severely
underestimating their spending on climate policy lobbying. Hence we have seen the stream of
shareholder resolutions demanding greater clarity on both scope and amounts spent on lobbying in
climate and other policy areas.
Walden Asset Management press release, January 2016
Walden Asset Management press release, March 2016
Open Secrets, Exxon profile, 2016
Guide for Responsible Corporate Engagement on Climate Policy, 2013