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June 29, 2022updated 16 Mar 2023 12:12pm

How ‘net zero’ financial firms are linked to lobbying against climate change policy

While the Glasgow Financial Alliance for Net Zero is waking up to the risk of member firms lobbying against climate policies, investors appear slow to react.

By Polly Bindman

climate lobbying
Shining a light on lobbying that is misaligned with financial institutions’ net-zero goals. (Photo by gremlin via iStock / Getty Images)
  • In its latest policy update, the Glasgow Financial Alliance for Net Zero (Gfanz) flags the potential hypocrisy of financial firms lobbying against climate policies.
  • 30 of the world’s largest financial institutions remain members of influential industry associations with a history of pushing back against climate change mitigation laws.
  • However, Gfanz rules allow members to hold on to their fossil fuel investments beyond 2023.

Lobbying by financial institutions against climate policies must no longer be tolerated. So says the Glasgow Financial Alliance for Net Zero (Gfanz) in what is seen as a key recommendation in its new guidelines for the financial sector on implementing plans for the transition to net-zero emissions.

Gfanz, which represents some 160 financial institutions with $70trn in assets, called on investors this month to start phasing out all unabated fossil fuels to have a fighting chance of staying in line with a 1.5°C temperature rise pathway.

While think tanks and non-government organisations (NGOs) have been raising the issue of lobbying against climate policy for years, this is the first time that guidance on the practice for the sector has been published.  

The call comes as research on banks lobbying for policies that potentially run counter to their own official net-zero commitments reveals a complex web of relationships between the firms in question, industry associations and government officials.

Indirect climate lobbying

Most concerning are financial institutions’ indirect lobbying activities, carried out by the industry associations of which they are members, according to a March 2022 report by think tank InfluenceMap.

While 29 of the 30 largest financial institutions have set goals of net-zero emissions by 2050 or earlier as part of the Gfanz initiative, they all remain members of financial industry associations with a history of pushing back against such developments.

Of these institutions, US banks Citigroup, J.P. Morgan and Morgan Stanley have the most links to such lobbying groups. All three are members of Gfanz and therefore officially committed to phasing out fossil fuels in line with the International Energy Agency’s net-zero pathway.

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Citi is a member of the US Chamber of Commerce, CalChamber, the Japan Business Federation (Keidanren) and the Edison Electric Institute (EEI). J.P. Morgan is a member of the first three, while Morgan Stanley is a member of the first two, plus the AGA Group. InfluenceMap claims that all five industry groups have, at some point, lobbied directly in line with fossil fuel interests.

Lobbying goals

In most cases, the lobbyists have a history of either watering down proposed climate legislation, pushing to maintain or introduce voluntary (rather than mandatory) standards, and preserving certain fossil fuels as part of any energy transition. CalChamber, for example, has “consistently lobbied to weaken or block climate legislation and publishes an annual list of ‘job killer’ bills that it opposes”, InfluenceMap says. 

In its 2021 corporate governance report, the US Chamber of Commerce – arguably one of the most influential lobby groups in North America – says ESG reporting does not require hard-baked regulation, claiming it will have a chilling effect on business practices if companies “disclose non-material information… not useful to investors”.

More specifically, the organisation pushed hard in 2019 against policies within the proposed US Green New Deal aimed at eliminating greenhouse gas emissions. The chamber argued the policies were “dangerous” and ran the risk of curbing economic growth and the standard of living for millions of US citizens.

The chamber’s dislike of reporting appears to run counter to the new Gfanz guidelines, which recommend banks regularly report on the status of an energy transition plan to the board and senior management, including on the reporting thresholds and escalation protocols that are in place.

Supportive or obstructive lobbying?

To give a full picture of financial institutions’ lobbying policies, InfluenceMap ranks some 80 financial institutions on their lobbying positions, both direct and through industry associations, in its Lobby Map database. The database centres on whether lobbying activities are either ‘supportive’ of or ‘obstructive’ to climate policy aligned with the Paris Agreement.  

As the chart below shows, while most institutions tend to lobby more supportively on climate policies than the industry associations they are involved with, there are a few outliers. Graded 0-100% for their direct and indirect (through industry associations) lobbying on climate, a score of below 50% is considered obstructive lobbying and above 50% supportive.

Among the most obstructive lobbyists, according to the research, are US asset manager Capital Group and J.P. Morgan, each scoring 49. This is, however, mainly due to “a small number of lobbying positions against climate policy” rather than any sustained advocacy, InfluenceMap stresses.

For example, in his April 2022 letter to shareholders, Jamie Dimon, CEO of J.P. Morgan – one of the biggest financiers of oil and gas – said increasing investment in clean technologies was necessary, but, at the same time, called for increased production of natural gas in response to Russia’s invasion of Ukraine. Such thinking appears to differ with the International Energy Agency's call for no new oil and gas investments beyond 2021, while Gfanz’s guidelines take the view that Russia’s aggression highlights the “imperative” of a transition away from fossil fuels. That said, Gfanz rules allow members to hold on to their fossil fuel investments beyond 2023.

On the flip side, UK insurer Aviva scores very highly (90%) for lobbying in favour of climate change mitigation policies. That means it is “almost alone in the financial sector in calling for systemic reform to achieve a sustainable financial system”, InfluenceMap says.

Lobbying behind closed doors

While InfluenceMap has conducted extensive assessment on the positive or negative sentiment of public statements on climate policy, most lobbying takes place behind closed doors.

According to non-profit transparency platform OpenSecrets, the bill that J.P Morgan lobbied on the most in 2021 was the Climate Change Financial Risk Act of 2021 (see chart below), but the specific content of such meetings is not made public. Introduced in May 2021, the bill would mandate stress tests for larger financial institutions to measure their resilience to climate-related risk. It is being considered by the US House Committee on Financial Services.

Investors urged to get tougher climate lobbying

Of course, companies are at liberty to split from industry associations they no longer align with. But it is rare for banks to do so on the grounds of climate lobbying positions, Rebecca Vaughan, lobbying programme lead at InfluenceMap, tells Capital Monitor. That said, just last month Toronto-based Scotiabank chose not to renew its long-standing relationship with oil and gas lobby group the Canadian Association of Petroleum Producers, but it declined to confirm that the decision was made on climate grounds.

Investors must push for more transparency, says Vaughan. Despite the financial sector’s anti-climate lobbying becoming a big issue of late, she argues that investors have yet to take the industry to task.

There are, however, examples of investors taking action. In May this year, investment firm Boston Trust Waldon filed a shareholder resolution at J.P. Morgan, requesting that the bank conduct a review into how its direct and indirect lobbying activities align with the Paris Agreement. The resolution was eventually withdrawn, as J.P. Morgan gave a ‘commitment’ to do so that satisfied shareholders.

A similar resolution was voted on at Citi’s AGM in March last year by Miller Howard Investments, whereby shareholders requested that the bank disclose its lobbying expenditures. The official resolution statement cited concerns about Citi's membership of the US Chamber of Commerce, as the organisation had “consistently undermined the Paris accord”.

According to data from financial charity ShareAction, the resolution at Citi only received 23% of the vote, with investors such as BlackRock and Capital Group voting against it.

Clearly, investors are not taking all the necessary steps to ensure consistent messaging from the financial sector on climate change.

Capital Monitor is hosting the Webinar series, Making Sense of Net Zero. Find out more information on

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