Ceres highlights general counsel role in climate lobbying efforts

General counsel have an important role in ensuring governance tools are in place to align their companies’ direct lobbying – or indirect lobbying via industry groups – with climate science and the systemic risks posed by the climate crisis, according to a new report.

Non-profits including Ceres late last year released an open letter to US CEOs calling for companies to adopt a framework centering on a science-based climate policy agenda in line with an increase in global temperatures of 1.5° C scenario.

The letter asked companies to: advocate for policies at the national, sub-national and/or sectoral level that are consistent with achieving net-zero emissions by 2050; align trade associations’ climate policy advocacy to be consistent with that goal of net-zero emissions by 2050; and allocate advocacy spending to advance climate policies.

Following on from that letter, Ceres last month released its own ‘Blueprint for responsible policy engagement on climate change’ in which it argues that this framework is part of the broader context of climate risk, including how direct and indirect lobbying based on climate science is key to tackling the systemic risks of climate change.

The blueprint also points to the importance of having governance systems in place to allow for aligning lobbying efforts across corporate structures – and calls for engaging corporate counsel and boards in these discussions.

‘[W]hile many businesses in the US have taken ambitious steps to address climate change, their actions remain insufficient to address the crisis due to the absence of comprehensive public policy that is in step with climate science,’ Anne Kelly, vice president for government relations at Ceres, writes in the report’s introduction.

‘Companies have a vital role to play in calling for effective climate policy through their direct lobbying and through the lobbying practices of the trade associations to which they belong.’

‘Companies that establish robust governance systems to address climate change as a systemic risk and align their direct and indirect lobbying efforts to support science-based climate policies will drive the creation of a regulatory environment that best positions them for resilient growth,’ the Ceres report states.

Specifically, Ceres in its framework urges companies to:

• Assess the impact of climate change on the company, including the ways in which its lobbying work may exacerbate or mitigate these risks. This entails assessing the risk that climate change poses to the company and conducting an internal audit of direct and indirect lobbying positions on climate change
• Systematize decision-making on climate change across the company, including in all direct and indirect lobbying. This includes engaging the board on climate policy
• Align both direct and indirect lobbying with science-based climate policies. This includes publicly stating that the company supports science-based climate policies; directly lobbying for science-based climate policies; and engaging with trade associations on aligning their lobbying with climate science.

Veena Ramani, senior program director for the capital markets systems program at Ceres and one of the lead authors of the report alongside governance manager Hannah Saltman, tells Corporate Secretary that general counsel can play key roles in each of these three areas.

In terms of assessing climate change risks, Ramani explains that ‘the job of the general counsel is risk oversight,’ with a company’s risk management work feeding up to their office either directly or indirectly. Potential risks posed by climate change include global regulation as even though the US is set to withdraw from the Paris climate agreement other nations’ governments are addressing the issue, she notes.

Similarly, Ramani points out that many US states are introducing their own climate change-related regulations, notably California and New York, and that a Joe Biden-led administration would likely take a very different approach to climate change from 2021, if elected. Another potential risk is from litigation, as some state attorneys general seek to bring lawsuits against companies they believe are not addressing climate change, she adds.

The general counsel is also the central organizing figure at a company in regard to governance and is responsible for ensuring the right systems are in place for the company and board to act correctly, Ramani notes. She adds that big companies can find that work on lobbying becomes siloed and since any lobbying not aligned with science-based climate change policy can backfire, general counsel must make sure the right people are involved in lobbying decisions.

In terms of lobbying itself, Ramani is not intending for general counsel to be in the room with policymakers. Rather, their role is centered around corporate disclosures and transparency, ensuring that the company makes clear its belief in the science of climate change and offering examples of where the company is lobbying in ways aligned with that science, she says.

Companies should also disclose their trade association memberships – including memberships of groups that may not take a science-based approach to climate change, according to Ramani. Ceres wants companies to engage with such groups to try to shift their thinking.