April 2nd, 2019 for Immediate release
Shell under scrutiny on its industry associations and climate lobbying
InlfuenceMap’s March 2019 analysis found that the five largest publicly-traded oil and gas majors (ExxonMobil, Royal Dutch Shell, Chevron, BP and Total) are spending $200M a year lobbying on climate and energy policy, much of which is oppositional to Paris-aligned ambition. Last year, concerned shareholders including the Church of England’s Pension Board, Sweden’s AP7 and BNP Paribas (using InfluenceMap analysis) led in demanding clarity and remedial action on climate lobbying from European companies, including Shell. Shell made a commitment to do this and it was released today. We assess it here.”Shell’s lobbying disclosure and decision to leave a highly misaligned trade group is a welcome step from a key player in a sector known for being highly opaque and slow on this important part of the climate agenda. However, InfluenceMap has some significant concerns at the thoroughness of Shell’s analysis, particularly as applied to other powerful trade groups such as the American Petroluem Institute, a group clearly mislaigned with the Paris Agreement.” Edward Collins, Analyst,
InfluenceMap
Shell’s climate lobbying disclosure – an initial assessment
Shell’s assessment of its trade association memberships and climate lobbying alignment covers a wide range of groups whose activities are of significant concern to investors. Given the current poor disclosure on this topic in general, Shell’s contribution is a welcome step. However, Shell’s application of its analysis of misalignments and approach to dealing with these leaves significant concern.
Shell’s decision to focus the review only on four climate-related policies (the Paris Agreement, carbon-pricing mechanisms, low-carbon technology policy and the role of natural gas) appears to marginalize other key climate policies streams. For example, lobbying related to a range of specific targets and standards for renewable energy, energy efficiency and greenhouse gas emissions (relevant both to Shell’s operations and use of its products) are not covered in as much detail. This approach appears to have resulted in the Shell not clearly accounting for significant areas of negative trade group lobbying on key areas of climate policy.
Shell’s explanation of how it has determined “material misalignment” between its climate positions and the lobbying of its trade associations, as compared to “some misalignment”, lacks detail. The company has not clearly explained why it has decided to take the strong action of leaving the American Fuel & Petrochemical Manufacturers (AFPM) but not other trade groups that InfluenceMap’s analysis shows to be equally oppositional. These include the American Petroleum Institute, the National Association of Manufacturers (NAM), the US Chamber of Commerce and the Western States Petroleum Association. In some cases (e.g. NAM and the US Chamber) it appears the only ‘climate policy’ Shell and its trade groups are aligned on is support for natural gas in the energy mix. Shell’s description of its alignment with trade associations covered in the report that it has identified “some misalignment” to appears to gloss over some of the most direct, negative, and egregious climate lobbying by these groups.
Despite this, the company’s decision to leave the American Fuel and Petrochemical Manufacturers indicates willing to act on misalignments between its stated positions on climate and the lobbying activities of its trade associations. Shell has also committed to take a range of steps with other trade associations of concern. However, Shell has not specified timelines for these efforts nor clearly explained when stronger action will be taken if they are unsuccessful.
InfluenceMap will watch this process closely as it develops and welcomes similar disclosures from other major corporations.
Contact:
Edward Collins, Analyst
[email protected]