Mixed Messages: Corporations Play Both Sides On The Climate

Submitted by Francesca Rheannon

By Francesca Rheannon

Atmospheric carbon has just passed a grim milestone — 400ppm. New Mexico is in flames, Greenland is melting, and we’ve just learned that nuclear plants are at risk of disruption due to global warming. Yet politicians are burying their heads ever deeper in the sand.

In North Carolina, legislators have proposed a bill that would outlaw climate science (watch Stephen Colbert’s brilliant take on this legislative insanity below) and Congressional Republicans are planning to boost spending on carbon-intensive oil shale, while stalling on wind credits. Is it any wonder the public is confused? Science Daily reports an increase in public skepticism on global warming and in alarm about it.

It seems some corporations are confused, as well. A new study out from the Union of Concerned Scientists (UCS) examined 28 publicly traded companies in the S&P500, comparing their public relations stance on climate change with actions they pursued out of the public eye. Such actions included lobbying efforts on climate legislation, contributions to political campaigns, and donations to organizations that were either pro- or anti-climate action.

The study found that sometimes what one hand was doing on the corporate public relations front was being countered behind the scenes by the other.

The Good, The Bad and The Contradictory

The report, A Climate of Corporate Control, divided the companies studied into three categories: Consistent, Contradictory and Obstructionist:

Our analysis reveals that while some American companies have taken consistent and laudable actions in support of climate science — and of consequent policy — others have worked aggressively to undermine the science and block science-based policy proposals. Still other companies have taken contradictory actions in different venues…Examining the most contradictory players in our sample, we find that companies are more likely to express commitment or concern about climate change in venues directed at the general public, such as their corporate websites, and that companies are more likely to misrepresent climate science through their funding of outside organizations or in venues directed at the federal government, such as corporate comments in response to the EPA Endangerment Finding.

The predominance of those “contradictory” companies in the study was unexpected. UCS’ Francesca Grifo told CSRwire, “The hypocrisy story was a surprise to us. I expected to find leaders and laggers. I didn’t expect to find people playing both sides.”

And climate change hypocrisy has an impact:

Such inconsistent corporations create confusion by representing the scientific consensus accurately in some venues but not in others, and by supporting politicians, trade groups, and think tanks whose positions are in direct conflict with one another. The resulting defeat or delay of policy efforts to address climate change has huge implications for government, the economy, public well-being, and the planet.

Greater Transparency Required

In fact, Grifo says, corporate actions are significantly more important than ideology in driving political interference in climate change policy. That’s why transparency about those actions is critical to informing the national conversation on the issue. But the researchers found barriers to transparency built in:

Because publicly owned companies are legally required to disclose only minimal details regarding their financial and political activities, the information revealed here likely represents an incomplete picture of the overall influence these companies exert on the nation’s climate science and policy discourse.

One example: reporting on the IRS 990 form. Companies were able to avoid disclosing more than two-thirds of their support for outside organizations by circumventing giving through their corporate foundations (which must be reported on the IRS 990.)

One critique of the UCS report faulted it for not distinguishing between large and small donations to outside groups. But without open access to all the figures on such corporate donations, the researchers felt it would be unfair to those companies that did disclose while giving a pass to those that didn’t. “We wouldn’t be able to confidently say how much companies are contributing,” UCS analyst and report author Gretchen Goldman told CSRwire.

Affiliations With Industry Groups

Affiliations with industry groups presented another area of contradictions. So, for example, while General Electric (Ecomagination) belongs to such pro-climate action groups as the Carbon Disclosure Project, the US Climate Action Partnership, the World Business Council for Sustainable Development and the American Wind Energy Association, it also holds memberships in as many groups that have been active against climate policy, like the National Association of Manufacturers, the Business Roundtable, the National Petrochemical and Refiners Association and the U.S. Chamber of Commerce, among others. 

GE's VP of Corporate Citizenship Bob Corcoran defended these memberships, telling CSRwire:

“GE’s position on climate change has been clear for years – it is real, it is measurable, and it is happening. But the fact is we are also a big company operating in many industries. We work with outside groups because we share some common interests, but denying climate change is not one of them.”

But climate action advocates, including conservative Thomas Friedman, have campaigned for companies to resign membership in the U.S. Chamber of Commerce over its policy of climate denial.

It’s true that GE is one of the better actors in the report – its ratio of “pro-climate to anti-climate contributions” was 1.39:1. So is Nike, which had a ratio of 1:3.1. But even Nike was confronted in 2009 by shareholder Green Century Capital Management, which sent the company a letter asking it to withdraw from the U.S. Chamber of Commerce over the Chamber’s stance on climate change.

Nike answered that call; GE is yet to.

Contrast GE’s and Nike’s contributions ratio to that of Waste Management, Inc., another company that touts its commitment to sustainability. (The company owns Greenopolis, the online “green” blog and social network.) Its ratio of pro-climate to anti-climate contributions was 1:1.34. (Not as bad as ConocoPhilips -- 1:15.4 – which claims on its website, “Each of ConocoPhillips’ businesses is responsible for integrating sustainability issues into day-to-day operations, project development and decision-making.”)

And how about comparing these comments from WMI for a head-spinning experience?

1. "Over the next 10 years, our goal is to reduce emissions and increase fleet efficiency by 15 percent. We are implementing a range of technologies to make our trucks more efficient, including controlling emissions, using alternative fuels, and optimizing truck design.” – Sustainability Report of Waste Management, Inc.
   
2. “Environmental advocacy groups and regulatory agencies in the United States have been focusing considerable attention on the emissions of carbon dioxide, methane, and other ‘greenhouse gases’ and their potential role in climate change. The adoption of laws and regulations to implement controls of greenhouse gases, including the imposition of fees or taxes, could adversely affect our collection and disposal operations.” – report to the Securities and Exchange Commission

Creating Consistency: The Disclose Act And Shareholder Activism

The key to creating greater consistency between the “green” public relations message and private action is more sunshine on corporate political contributions and lobbying.

The Disclose Act has just been re-introduced by Senators Chuck Schumer, Patrick Leahy and Sheldon Whitehouse. That would enhance disclosure of political spending by companies and would address concerns about lack of disclosure with superPacs. It would also allow shareholders to better know where a company’s money goes.

Shareholders want to know. A Climate of Corporate Control study points out that “nearly a third of the shareholder resolutions prepared for the 2012 corporate annual meeting season ask companies for more disclosure about their direct and indirect campaign spending and lobbying.”

With a gridlocked Congress seemingly incapable of addressing the rapidly closing window to take action on the climate, shareholders could lead the way for companies to put their money where their mouth is.