A coalition of global investment groups has come together to develop a new 14-point 'standard' for preventing corporations from lobbying to "delay, dilute, and block" climate action.
The 'Global Standard on Responsible Climate Lobbying' has been developed by investors networks with a collective capital under management of more than US$130 trillion.
Under the standard's 14 points, companies must commit to practising responsible climate lobbying, disclose their support of business groups lobbying on their behalf, and take action if doing so is incompatible with the global climate goal.
"For too long corporate lobbying activities have either been shrouded in opacity or run simply and overtly in contrary to the goals of the Paris Agreement," said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change.
"While the ambition is for all companies to adhere to the new standard, it is particularly pertinent for companies that claim to support a net zero pathway while simultaneously pursuing lobbying activity that runs counter to this.
"The new Global Standard will be a vital tool for investors to use in calling out and mitigating irresponsible climate lobbying through corporate engagement and good stewardship," she said.
Advised by the UN Principles for Responsible Investment and the Institutional Investors Group on Climate Change, there were 150 contributors to the standard, including the Church of England Pensions Board, the Swedish Pension Scheme AP7, BNP Paribas Asset Management, the Asia Investors Group on Climate Change, with the London School of Economics, Chronos Sustainability, InfluenceMap and Ceres also supporting the process.
Companies that fail to act on climate change could face shareholder resolutions if governments attempt to delay, mitigate, or prevent climate action, the group said in a statement.
The standard does not mandate that investors divest from firms that delay, dilute or obstruct climate action; but in the first instance, they should "escalate the issue" such as by filing shareholder resolutions.
The new standard also commits supporters to funnel more money to businesses capable of consistently advocating on behalf of the Paris Agreement - as well as to support coalitions whose sole purpose is to coordinate lobbying for Paris-aligned policies.
Despite the formation of many coalitions in recent years to help investors collaborate on net-zero transition plans, much of the focus has been on whether companies are reducing their direct and indirect emissions. Their influence on policy has received less attention.