PRI takes issue with energy firms supporting fossil fuel trade bodies
The network’s head of stewardship highlighted the lobbying ‘misalignment’ in his address to the Barcelona in-person conference.
Ben Pincombe, head of stewardship, climate change, at the UN PRI, has spoken out against energy companies that have made pledges to align with Paris Agreement goals, yet remain as members of trade associations that lobby against the agreement.
Speaking ahead of a panel discussion on Climate Action 100+’s 2030 vision at the UN PRI’s in-person event in Barcelona, Pincombe highlighted the “misalignment” demonstrated by some of the leading companies in the industry.
“Many companies still appear to be misaligned in terms of their lobbying activities with regards to the Paris Agreement – both in a direct manner and also in an indirect manner through virtue of being members of certain trade associations that lobby against the Paris Agreement and greater action on climate change,” he said.
Pincombe said that Climate Action 100+, the investor-led initiative that looks to engage with the world’s largest corporate greenhouse gas emitters, had seen progress in target-setting by its focus companies. However, “almost no company” appears to be integrating climate risk into financial statements and accounting practices.
“This really shows an alarming discrepancy between what companies are saying in the front-end narrative of their accounts, and then what they are actually disclosing in the back-end financials. Financial statements are ultimately where investors make their investment decisions,” he said.
Climate Action 100+ (CA100+) is managed by five investor networks, including the UN PRI. It is made up of 700 global investors that are responsible for more than $68trn in assets under management across 33 markets. Companies that are the focus of the initiative include oil and gas giants BP, Chevron and ExxonMobil.
Pincombe said: “What we find is missing in a lot of cases from companies is then a credible decarbonisation strategy or transition plan to help deliver and implement those targets.”
Paris-aligned or oil and gas lobbyist?
Energy giant BP has publicly stated its commitment to the goals of the Paris Agreement, yet remains a member of the American Petroleum Institute, which is rated ‘F’ in NGO InfluenceMap's A-to-F scoring system for tracking corporate lobbying on climate.
In 2020, it did, however, leave the Western Energy Alliance, Western States Petroleum Association and American Fuel and Petrochemical Manufacturers due to “misaligning” on methane regulation and approach to carbon pricing.
Pincombe said of the companies that CA100+ engages with: “There's been some great progress on capital allocation alignment, yet most of the energy companies in Climate Action 100+ do not appear to have capital expenditure consistent with below two degrees goals.
“There’s a sentiment that perhaps companies are not putting their money where their mouth is in terms of disclosing and what they are committed to doing.”
Since its launch in 2017, CA100+’s results have been mixed, with the firms and state-owned enterprises it has engaged with showing little progress towards achieving net-zero targets.
CA100+ is set to complete its initial five-year plan at the end of 2022, and from this point will transition into an organisation that will urge more practical delivery of transition strategies.
The panel discussion, led by Pincombe, echoed similar comments made at the conference on the previous day by Fatih Birol, executive director of the International Energy Agency, who insisted that it was still possible for the Paris Agreement target to be hit.