Companies are not positively engaged with climate policies (2019)

Companies should not oppose effective and well-designed climate regulation but should actively support it. Since the automotive industry is currently a major source of greenhouse gas emissions, timely regulation is especially necessary to ensure that limits are observed and that there is a “level playing field” for auto manufacturers as they approach the transition to a low-carbon economy. Moreover, climate regulation that affects the automotive industry – for example, regarding vehicle specifications on fuel efficiency – is usually developed in a consultative fashion due to the need for technical inputs. Therefore, companies have significant room for influencing these regulations, in ways that could be either negative or positive for the climate.

Trade associations involved with the automotive industry, as is often the case with high-emitting industries, are a main channel that companies use to directly or indirectly influence climate policies and regulations. Participating in trade associations that actively lobby against climate-positive legislation is likely to lead to rising global temperatures. Therefore, if trade associations have climate-negative positions, companies would need to take steps to ensure that any negative influence is countered or minimised.

None of the companies assessed show leadership in engaging with trade associations or regulatory bodies. Though all of the companies – with the exception of Tesla – show some level of engagement with a trade association or regulatory body, none of them have a publicly available embedded plan on engaging with these industry organisations as is widely considered best practice. Moreover, relatively few of the companies make public commitments to engaging with climate policy in a clear and transparent way.

On the other hand, the Chinese companies included in the assessment face a significantly different policy environment in China than those operating in other large regulated markets, namely the US, Japan or the EU.  Moreover, China is a highly regulated national market with specific, time-bound policies.

There are some examples of companies in the assessment that are proactively advocating climate-positive positions relating both to policies and trade associations. Ford, Groupe PSA, General Motors and Renault are moderately advanced in their climate policy engagement, having established more defined positions relating to “climate-friendly” policies and what actions to take if an affiliated trade association has climate-negative positions. For example, Renault documents a cross-company coordination process between key departments to establish its position on climate policies and trade association membership. Ford details a trade association engagement process in which it assumes a case-by-case policy approach to monitor climate policy positions.

However, the automotive industry as a whole does not show that they are engaging with policymakers to help mitigate climate change or systematically safeguarding against influencing climate-related regulations in a negative way, directly or indirectly.