where checking accounts rebuild communities
Back to homepageInstitutional ReportsSRI Financial Professionals DirectoryToolsNewsSRI Performance and TrendsAbout Us   

June 11, 2012
Behind the Scenes, Corporations Undermine Science-Based Climate Policy
    by Robert Kropp

The Union of Concerned Scientists reports that many US-based corporations engage in greenwashing by maintaining a public image of climate consciousness while secretly undermining climate science and policy.

Bank of America announced a new environmental initiative today, committing $50 billion over ten years to environmental investments "to help address climate change, reduce demands on natural resources and advance lower-carbon economic solutions."

However, as Rainforest Action Network (RAN) points out, "Bank of America has invested over $6.4 billion in coal" during the past two years alone. And a report issued by RAN and BankTrack last month says, "Bank of America underwrites more than 43% of mountain top removal coal mining in Appalachia." Moreover, the authors of the report state, the bank told them that it aspires to be the "number 1 underwriter of coal power."

In response to the bank's statement, Amanda Starbuck of RAN said, "We cannot applaud its climate and renewable energy commitments while the bank is also playing a leading role in financing the coal industry."

"Increasing support for renewable energy and not decreasing funding for coal will not do what's needed to reduce emissions and protect the climate," Starbuck continued.

Until Bank of America publicly announces a reversal of its coal financing policy, it could be perceived as engaging in what has come to be known as greenwashing. In a report entitled A Climate of Corporate Control, the Union of Concerned Scientists (UCS) described the practice: "Companies use public relations campaigns to make unsubstantiated claims regarding their environmental stewardship."

The "strategy allows companies to maintain a public image of climate consciousness while, behind the scenes, undermining climate science and policy in powerful ways," UCS continued.

Bank of America and the other big financiers of coal— JPMorgan Chase, Citi, Wells Fargo, Goldman Sachs, and Morgan Stanley, among others—dodged a bullet in the report, because no mention is made of financial institutions by UCS in it. Instead, the alliance of citizens and scientists focuses on how many US-based corporations "have used their extensive resources to misrepresent and misuse science at the public's expense."

"In recent years this inappropriate activity has become more visible and pervasive," the report continues. "Climate science is being used as a political football, with companies and their allies creating confusion around the science in an attempt to delay regulatory action."

In 2009, the US House of Representatives passed the American Clean Energy and Security Act, commonly referred to as the Waxman-Markey Clean Energy Bill. The bill went nowhere in the US Senate. Then, in early 2010, the US Supreme Court delivered its controversial ruling in the Citizens United case, opening the floodgates of corporate spending to influence political elections.

It is against this backdrop that UCS frames its report, for which 28 publicly traded corporations from the S&P 500 were selected. The companies either commented on the 2009 endangerment finding of the Environmental Protection Agency (EPA), which determined that greenhouse gas (GHG) emissions threaten the public's health and the environment; or, they contributed to campaigns either for or against California's Proposition 23, which if passed would have suspended the state's climate change mitigation law.

"All companies in our sample stated they were taking voluntary internal action to reduce carbon emissions," the report found. However, "All but three of the companies in our sample made statements about the negative implications that climate-change-related regulation could have for their business operations."

In some notable cases, the public statements on climate change by companies are consistent with their actions in support of science-based climate policy. Nike, for instance, is a member of Business for Innovative Climate & Energy Policy (BICEP), a coalition of consumer companies advocating for meaningful energy and climate change legislation. In 2009, Nike resigned from the board of the US Chamber of Commerce over the trade association's obstructionist approach to climate change legislation and regulation.

Additionally, even a small number of energy companies—AES and NextEra Energy are cited—"have taken many actions in support of climate science and science-based policy," according to the report.

However, most of the companies analyzed either are blatantly obstructionist or engage in a form of greenwashing. The latter companies "made statements in support of climate science and policy in some public venues while spreading misinformation on climate science or hindering science-based policy elsewhere."

"Companies are more likely to accept climate science and express a commitment to climate action in venues directed at the general public," the report found, "and are more likely to misrepresent climate science and oppose action in venues directed at the federal government or that involve the outside organizations they fund."

As for the blatantly obstructionist companies, "they disproportionately and adversely influence the dialogue by eroding the public's understanding of climate change and weakening support for science-based climate policy," the report states.

More transparency in corporate reporting on climate-related risks is necessary, the report concludes. Companies should disclose their support for outside organizations, their expenditures on political spending and lobbying, and the business risks associated with climate change.

"Investors should press companies to seriously consider any business risks posed by climate change," the report advises, "and to document them in their SEC Form 10-K, as part of companies' responsibility to investors and the greater community."


| Reports | SRI Financial Professionals Directory | Tools | News | SRI Performance and Trends | About Us | Contact
© SRI World Group, Inc. - All rights reserved
Terms of use - Privacy Policy - OneReportTM Network