Investors urge giants to exit EU lobby groups


September 7, 2015

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When investors with assets worth £45bn talk, other firms listen.

And when they write it has much the same effect. That is why were interested to read a series of letters written by a coalition of 25 institutional investors last week that urge nine publicly-listed firms to leave lobbying groups that are undermining European climate policy. London-based responsible investment organisation Share Action organised the campaign.

The investors who signed the letters come from three continents and include AP4 Swedish National Pension Fund, Boston Common Asset Management, The Pensions Trust, Sarasin & Partners and Walden Asset Management; and their targets include some of the world’s largest energy companies: BP, EDF, Statoil and Total. These letters said that these groups are members of lobbying organisations that directly contradict their stated ‘green’ policies.

This is relevant for two reasons. First, because the likes of EDF and Statoil are investors in renewable energy, including wind, alongside their investments in other types of energy. This means that any effort to weaken renewable energy laws looks like hypocrisy.

And second, because the European Union cannot help but be influenced by lobbying on behalf of giant multinational corporations. These lobby groups will affect, however subtly, new EU laws that are pro-renewables, and that will harm investment prospects in sectors like wind. If this letter-writing campaign can encourage these multinationals to cut their ties with these anti-renewables lobbyists then it must be a benefit to those who work in wind.

This is the latest salvo in a movement by investors in recent years to pressure corporates to exit anti-renewables lobbying groups, with high-profile successes including Unilever leaving Business Europe. Corporates must take a long-term view on the climate.

That does not mean they will do so.

We are sceptical about whether these letters will actually achieve their main goal because, despite all the big-name signatories, they cannot actually force those in charge of other companies to exit anti-renewables lobbying groups; and they have little more behind them than the weight of liberal opinion. If a company like BP has faced years of global anger for the Deepwater Horizon oil spill then it should have no trouble ignoring a letter like this one.

But this week’s campaign has at least helped raise public awareness of the world of anti-renewables lobbying. In particular, the letters quoted the Policy Studies Institute, which has said the groups Business Europe, Cefic, Fuels Europe and the Association of Oil & Gas Producers “contributed to obstructive lobbying” on the EU’s 2030 framework for climate and energy policies, and on options to strengthen the EU Emissions Trading System.

It said: “These associations gain legitimacy by being able to say that they speak on behalf of major industry players… [and your] withdrawal would help to undermine this claim.”

If these letters encourage some of these global giants to cut their ties with anti-renewables lobbyists then it would help strip away some legitimacy from those groups, and benefit the companies that have invested — and continue to invest — in wind farms in Europe.

And, if they don’t, at least they highlight the murky lobbying around key EU ‘green’ policies.

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