Due to a “lowest common denominator” attitude among powerful fossil fuel members for whom climate policy advancement might be an existential force, industry groups’ lobbying is extremely regressive, according to sources. In a nutshell, businesses openly support a progressive climate. As demonstrated by several pieces of US legislation in recent years, business support can make or break environmental regulations. Chief sustainability officers say that this misalignment can be “devastating,” but that businesses receive too many other benefits from membership in trade associations to take a strong stance. Donald Trump received a lot of support from business America when he was elected as the 47th president of the United States earlier this month. However, corporate funding has a significant impact on the success or failure of certain laws in addition to being intricately woven into political campaigns.
Key industry associations and their stance on climate
According to a study by the non-profit research tank InfluenceMap, major trade groups are the key players impeding progressive climate policies. On important matters like the Inflation Reduction Act and the required climate-related disclosures, these groups are becoming more and more out of step with their members. As the US prepares for Trump 2.0, this is more crucial than ever. Trump’s second term would likely see fewer checks and balances, with aggressive environmental deregulation largely expected. Although history indicates that their industry groups will not be battling with them, Corporate America will play a significant role in protecting laws like the IRA, which they claim have been fundamentally beneficial for business.
Why companies choose to stay despite divergences
According to the We Mean Business Coalition, one of the most significant sustainability-related steps a firm can take is to publicly support progressive climate policies. Climate envoy John Kerry specifically mentioned the 400 American companies that openly supported President Joe Biden’s 50% emissions reduction goal by 2030 as being essential to its accomplishment in 2021. However, according to WMBC, despite the sustainability aspirations of certain US firms during the past ten years, there is a noticeable disconnect between advocacy and ambition, and a large portion of that may be attributed to their involvement in trade groups that consistently oppose climate legislation. One excellent example is the Securities and Exchange Commission’s initiative to require sustainability reporting. Industry organizations like the US Chamber of Commerce and the Business Roundtable swiftly filed lawsuits against the SEC regulation, even though non-financial information reporting is becoming the standard globally and US corporations are already bound by many of these standards.
The role of reputation and stakeholder pressure
While its members “are committed to combating climate change and are leading the way in transparent, voluntary climate-related disclosures,” a Business Roundtable spokesperson told Sustainable Views that the organization believed the rule’s scope and breadth were “counterproductive and beyond the SEC’s statutory authority.” A request for response from the Chamber of Commerce was not answered. The SEC’s regulation, which was already weaker than previous suggestions, is far less likely to be implemented now that Trump has been re-elected. Trump has promised to fire Gary Gensler, the chairman of the SEC, on his first day in office. Deborah McNamara, executive director of ClimateVoice, a program that empowers employees to pressure their employers toward progressive climate policies, argues that if large firms hadn’t spoken out in favor of it, California’s climate disclosures would have turned out similarly. Many of the chamber’s members, including Salesforce, Microsoft, and Google, publicly supported the law despite the California chapter of the chamber fighting the regulation.
Implications for climate advocacy and policy progress
At least 37 of the hundreds of companies that these groups are supposed to represent have stated in public business filings that their policy stance differs from that of their trade associations. They are still members, though. The previous chief sustainability officers of three large US IT businesses, all based in California, were interviewed by Sustainable Views. They all stated that they frequently believed that the trade groups of their firms, particularly the chamber, did not fairly reflect the opinions of their companies about climate policy. According to them, a company’s inadequate communication of its net zero plan may be the cause of this mismatch. This is a “cop-out,” according to Bruce Freed, president and co-founder of the Center for Political Accountability, who spoke to Sustainable Views, as trade groups rely on corporate fees to remain in business. He went on to say that businesses may and need to advise groups to cease impeding progressive measures. The former CSO continues, “A small number of members usually fossil fuel companies are incredibly motivated and forceful, which is why industry groups land on these positions.” “The problem may not be an existential threat to business, but for the rest of your members, climate policy is a “good to have.” For them, it’s existential.