Risky business: When corporations fund climate denial

Victoria Mills, Managing Director, EDF+Business

Corporate America is making important strides in addressing climate change. Almost 600 companies have joined the Science-Based Targets Initiative, nearly 200 have committed to use 100% renewable energy and companies are increasingly investing in technologies that improve environmental outcomes.

Yet last week, The New York Times reported that Amazon and Google were among the corporate sponsors of a gala hosted by the Competitive Enterprise Institute (CEI), an organization that recently Tweeted, “The claim that 97% of climate scientists believe humans are the primary cause of global warming is simply false.” Similarly, Mother Jones reported earlier this year that Facebook, Google and Microsoft sponsored a conference that promotes climate change denial.

Funding organizations that seek to undermine established climate science is bad policy, and especially poor optics for companies that want to be seen as leaders on climate change. Among the sponsors of the CEI event, Google and Amazon have signed the We Are Still In declaration; AT&T is a founding member of the Climate Leadership Council; and Uber has signed the Step Up Declaration which strives to achieve a “fossil fuel free society by 2050.”

When asked about this disconnect, Google and Microsoft sought to compartmentalize their support for CEI and similar organizations. Google’s policy page notes that its “sponsorship or collaboration with a third party organization doesn’t mean that we endorse the organizations’ entire agenda.” And in a statement quoted in the Mother Jones article, Microsoft says “Our commitment to sustainability is not altered or affected by our membership or sponsorship of an organization.”

It remains to be seen if investors, employees and customers will buy those arguments.

As Senator Sheldon Whitehouse noted in a letter to institutional investors, “funding CEI’s activities more than counters the positive effects” of the companies’ pro-climate policies. CEI’s largest program is energy and environment, and as the Times article points out, “the organization is arguably best known for its work disputing the science of climate change, and the corporations’ support comes at a time when the think tank has played an outsized role in the Trump administration.”

Further, a Wall Street Journal article on shareholder scrutiny of political spending notes, “A mismatch between a company’s core values and political contributions can tarnish a company’s reputation and business.” The acid test is how the recipients of corporate contributions characterize them. In a statement quoted in the Times article, CEI said it “asks support from those that share our values.”

The most powerful tool that companies have to fight climate change is their political influence. Leadership means advocating for climate policy, aligning trade associations and industry groups with company positions, and allocating political spending to advance climate action, not obstruct it.

Thankfully, a growing number of companies are stepping up to the plate on climate policy advocacy. This spring, more than 75 businesses advocated for carbon pricing on Capitol Hill (including Microsoft, which has been vocal in its support for federal climate legislation), and the CEO Climate Dialogue and Sustainable Food Policy Alliance both released policy principles to advance federal climate legislation. The CEO of Unilever also released an open letter calling on the company’s trade associations to align their climate policy advocacy with the Paris Agreement.

But here’s the bottom line: businesses can’t be “for” climate action if their political spending tells the opposite story. In a hyper-transparent world where emails live forever and event programs appear in the New York Times, it’s in a company’s best interest to match its rhetoric with reality, and put its money where its mouth is on climate change.