LyondellBasell, Danone, Nestle, Bayer ‘lead on trade-body climate practices’

Planet Tracker warns that misalignment between corporate climate statements and industry association activities could be seen as greenwashing.

Analysis published this week has identified a handful of companies that are leading the way when it comes to the climate credibility of their trade bodies. 

Chemicals giants LyondellBasell and Bayer were both namechecked in a report from think-tank Planet Tracker for using “better practices” than others when managing potential contradictions between their entity-level positions on climate change, and those of their industry associations. 

LyondellBasell published a paper last May in which it evaluated its membership of such bodies, and identified that only the stance of American Fuel and Petrochemical Manufacturers (AFPM) was notably misaligned with the goals of the Paris Agreement. 

In the report, it committed to “continue to evaluate” its membership of AFPM, and engage it further on climate change and the energy transition. 

Bayer conducted a similar review last year – for the third time – assessing its links with 63 trade associations. It said there was a 36% improvement in how aligned the associations were with its in-house climate policies, which Planet Tracker commended. 

“The report indicates a positive trend with a significant reduction in ‘no position’ instances and a slight increase in ‘partial misalignment,’ hinting at progress in policy development,” it said. 

Report author Ion Visinovschi told REP that companies needed to be “credible and consistent” about their climate advocacy and objectives. “Otherwise you could create reputational risks, including being accused of greenwashing or slowing down progress.”

“It’s not credible to claim to be a leader in the climate transition and then not lead on something as important as policy,” he added. 

Visinovschi said companies that are seriously pursuing a transition to net zero also faced greater financial risks if trade bodies advocated for less supportive climate policy.  

Planet Tracker described Bayer and LyondellBasell as “sensible examples of good practice in this area”, urging others to “follow promptly, as regulators could view this inconsistency as a form of greenwashing”.

Danone and Nestlé were not found to be members of any “misaligned” trade associations. 

Altogether, the report assessed 14 chemicals and consumer goods companies, including Air Liquide, BASF, Colgate-Palmolive, Procter & Gamble, Walmart, Woolworths and Unilever. 

The companies are all on the target list of shareholder engagement initiative Climate Action 100+, which coordinates efforts by large investors to encourage portfolio firms to decarbonise.

CA100+ has made it clear in recent years that lobbying practices will be one of its top priorities when engaging with firms. 

According to Planet Tracker, just 8% of S&P100 companies assess the alignment of their trade associations with their own climate goals, which is the think-tank’s first recommendation. It also calls on firms to develop strategies for how to respond to misalignment, either by engaging with the bodies or exiting them. 

Visinovschi noted that there is little evidence so far that industry associations can be meaningfully influenced by members, but there have been examples of “very superficial changes” that are “mainly around messaging”. 

In 2018, Mars, Nestle and Unilever left the Grocery Manufacturers Association to form an alternative group, along with Danone North America, called the Sustainable Food Policy Alliance.