A coalition of 19 investors with over £625 billion in assets under management has written to 11 major automobile companies to call for improved reporting of their public policy interventions on emissions standards.
The letters to Volkswagen, BMW, Honda, Daimler, General Motors, Ford, Fiat, Peugeot and Toyota request detailed information on the lobbying position they are taking on emissions legislation currently being debated in the US and EU.
Signatories to the letters include AXA Investment Managers, Swedish National Pension Funds AP2, AP3, AP4 and AP7, Environment Agency Pension Fund, and WHEB Group.
This initiative comes in the wake of the recent diesel emissions scandal that exposed Volkswagen’s use of software to beat emissions and air quality tests. This has led to broader scrutiny of the relationship between automobile companies and regulators, as legislative standards are currently being debated in the EU and US on transport emissions.
The letters ask for specific details on the companies’ positions on proposed EU CO2 emissions standards and US CAFE efficiency and GHG-related standards.
They also call for further information about the companies’ interactions with the regulatory process on these standards, their spending on trade associations, and ask for greater clarity and disclosure of activities by the European Automobile Manufacturers’ Association (ACEA), the trade association found to be obstructing the progress of EU automobile emissions regulation.
These areas have been idenfitied by InfluenceMap, a non-profit that analyses and ranks companies by their influence on climate change policy, as areas in which the companies do not provide sufficient reporting detail. These areas could be crucial for investors in predicting future crises like the one at VW.
Another letter has been sent to Carlos Ghosn, CEO of Nissan and Renault. Nissan and Renault have been recognised as some of the best performing companies for EU CO2 fleet emissions. This letter recognises Renault and Nissan’s performance on this topic, and encourages Ghosn into dialogue, particularly as he now chairs ACEA.
Seb Beloe, Partner and Head of Research at WHEB Group, says: “The Volkswagen crisis has helped to uncover the unhealthily close relationship between the automotive industry and regulators, particularly in Europe. In the long-run this undermines the competitiveness of the European car makers and we believe it is in the interests of investors and the environment alike to gain a better understanding of what goes on behind closed doors.”
Dylan Tanner, Executive Director at InfluenceMap says: “When it comes to the engagement underway between a company and the key regulations affecting it, there are often sparse details available to investors. The Volkswagen case highlights the need for a much greater disclosure regime, both of the company’s specific position on key legislation and its involvement in the policy process.”
ShareAction Chief Executive, Catherine Howarth, says: “The share price carnage brought on by the defeat devices scandal has focused the minds of shareholders of automobile firms. ShareAction is pleased to be assisting institutional investors in getting hold of risk-relevant information from the largest car makers in the world about their relationships with regulators and politicians.”
Notes for editors:
- These letters have been coordinated by Responsible Investment organisation ShareAction and InfluenceMap, a non-profit that analyses and ranks companies on climate lobbying and influence. The answers supplied by these companies will enable analysis to more accurately understand the extent of the problem and the risks it presents, which will be relayed to investors backing the initiative.
- For more information please contact Juliet Phillips at ShareAction at 07443503328 email@example.com
- For more information on InfluenceMap’s work see:http://influencemap.org/report/Automotive-Report-October-2015 or contact Dylan Tanner, Executive Director, Influence Map, at Dylan.firstname.lastname@example.org
Investors supporting the letters include:
- AXA Investment Managers, Environment Agency Pension Fund, Second Swedish National Pension Fund/ AP2, Third Swedish Pension Fund/ AP3, Fourth Swedish Pension Fund/ AP4, Seventh Swedish Pension Fund/ AP7, Menhaden Capital, WHEB Group, Ilmarinen Mutual Pension Insurance Company, Öhman, The Joseph Rowntree Charitable Trust, The LankellyChase Foundation, Barrow Cadbury, Christopher Reynolds Foundation, Zevin Asset Management, Tellus Mater Foundation, Dignity Health, Sisters of St. Francis of Philadelphia, Northwest Coalition for Responsible Investment.
- The letters are part of ShareAction’s initiative to draw investors’ attention to the risks and damaging impacts of corporate lobbying by certain trade associations. They urge investors to take action when there is an inconsistency between companies’ own positions and those taken by the lobbying groups they fund. They also call for greater transparency on lobbying activities, and urge companies to publicly distance themselves from organisations whose views they do not share, in order to reassure investors of their commitments to climate change action.
- ShareAction is the UK-based movement for Responsible Investment. ShareAction’s work on corporate lobbying forms part of the organisation’s Green Light campaign, which shines a light on environmental risk for major investors such as pension funds.