Erste Asset Management

Greenwashing through lobbying?

Greenwashing through lobbying?
Greenwashing through lobbying?
(c) cyrus-crossan-unsplash
Share post:

In recent years, environmental and social issues were voted on at the annual general meetings of global companies. Increasingly, the focus was on more transparency regarding lobbying and political contributions.

On the one hand, companies can communicate that they take climate targets seriously, for example, but on the other hand they can support lobby organizations that are accused of trying to achieve the opposite. Any discrepancies could thus be uncovered.

This year, for example, Exxon Mobil voted on a corresponding motion. According to information from our research partner ISS, Exxon would only partially disclose what amounts were invested in public lobbying. The information on expenditures in the individual states would not be complete.

In addition, indirect lobbying through memberships in e.g. “American Fuel & Petrochem Manufacturers” or “American Petroleum Institute” would also be relevant and memberships in trade organizations as well as related payments should be reported more transparently.

For climate targets but lobbying against them

In recent years, Exxon has increasingly been accused in the media of publicly supporting the Paris climate goals on the one hand, while lobbying against them on the other. This resulted, among other things, in the divestment of Norway’s largest private asset manager. The fear was that such lobbying could also negatively affect European initiatives to promote green investments.

2021 also saw a lawsuit filed by the City of New York against Exxon, Royal Dutch Shell, BP, and the lobbying organization “American Petroleum Institute” for misleading advertising and deceptive business practices. Products would be advertised on social media platforms as “greener” and “cleaner” even though the companies’ business model’s support of climate goals was questionable.

Applications gain importance

According to analyses by our research partner, the described imbalance between the publicly announced efforts of individual companies to support climate measures and at the same time to support lobbying organizations took place more frequently last year.

This was the reason for some investors to bring corresponding motions to a vote to stop this practice. Although the topics of climate targets, climate risks and energy transition continued to dominate, the proportion of motions calling for disclosure of political expenditures grew. Harvard Law School managed to vote on a motion to that effect at Chevron’s annual meeting last year. As a result, several other companies agreed to implement such reporting in 2021. The motion submitted to Exxon Mobil Corporation, mentioned at the beginning, also achieved a majority of votes.

“Say on climate”

A new term to read in this context, “Say on climate” follows the “Say on remuneration” voting series and obtains a regular vote on management’s proposed climate policy.

In this context, the proposals can be submitted by management itself or by shareholders. “Say on climate” is not legally enforceable, but has an advisory function. However, the result is in line with the expectations of shareholders, who have various other ways of expressing their dissatisfaction, for example when it comes to the re-election of supervisory board members, etc.

Investor support on the rise

That disclosure of political contributions and support for lobbying organizations is gaining interest among investors is shown by developments in the 2021 voting season: according to Harvard Law School, the average approval of proposals on political contributions increased from 38.6% in 2020 to 48.1% in this year’s season. In six cases, there was also a majority approval of the requests. Motions around lobbying were approved with an average of around 32.7% in 2020, and already with 39.2% in 2021. In three cases, there was a majority of votes in favor of the motions.

In addition, more and more investment houses are refining the sustainable content of their voting guidelines and supporting corresponding motions. If, for example, a company performs significantly worse than competitors in the relevant area or the political activities do not seem to be compatible with the long-term strategy, this would cause various investors to support a corresponding motion.

As Erste AM, we follow a guideline in our voting behavior that is holistically oriented towards sustainable standards. Motions from the areas of transparency on political spending and lobbying activities are included here and are supported by.

Legal note:
Prognoses are no reliable indicator for future performance.



Legal disclaimer

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. The language of communication of the sales offices is German and the languages of communication of the Management Company also include English.

The prospectus for UCITS funds (including any amendments) is prepared and published in accordance with the provisions of the InvFG 2011 as amended. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in conjunction with the InvFG 2011.

The currently valid versions of the prospectus, the Information for Investors pursuant to § 21 AIFMG, and the key information document can be found on the website under “Mandatory publications” and can be obtained free of charge by interested investors at the offices of the Management Company and at the offices of the depositary bank. The exact date of the most recent publication of the prospectus, the languages in which the key information document is available, and any other locations where the documents can be obtained are indicated on the website A summary of the investor rights is available in German and English on the website and can also be obtained from the Management Company.

The Management Company can decide to suspend the provisions it has taken for the sale of unit certificates in other countries in accordance with the regulatory requirements.

Note: You are about to purchase a product that may be difficult to understand. We recommend that you read the indicated fund documents before making an investment decision. In addition to the locations listed above, you can obtain these documents free of charge at the offices of the referring Sparkassen bank and the offices of Erste Bank der oesterreichischen Sparkassen AG. You can also access these documents electronically at

N.B.: The performance scenarios listed in the key information document are based on a calculation method that is specified in an EU regulation. The future market development cannot be accurately predicted. The depicted performance scenarios merely present potential earnings, but are based on the earnings in the recent past. The actual earnings may be lower than indicated. Our analyses and conclusions are general in nature and do not take into account the individual characteristics of our investors in terms of earnings, taxation, experience and knowledge, investment objective, financial position, capacity for loss, and risk tolerance.

Please note: Past performance is not a reliable indicator of the future performance of a fund. Investments in securities entail risks in addition to the opportunities presented here. The value of units and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your units. Persons who are interested in purchasing units in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. If the fund currency is different than the investor’s home currency, changes in the relevant exchange rate can positively or negatively influence the value of the investment and the amount of the costs associated with the fund in the home currency.

We are not permitted to directly or indirectly offer, sell, transfer, or deliver this financial product to natural or legal persons whose place of residence or domicile is located in a country where this is legally prohibited. In this case, we may not provide any product information, either.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to § 21 AIFMG for restrictions on the sale of the fund to American or Russian citizens.

It is expressly noted that this communication does not provide any investment recommendations, but only expresses our current market assessment. Thus, this communication is not a substitute for investment advice, does not take into account the legal regulations aimed at promoting the independence of financial analyses, and is not subject to a prohibition on trading following the distribution of financial analyses.

This document does not represent a sales activity of the Management Company and therefore may not be construed as an offer for the purchase or sale of financial or investment instruments.

Erste Asset Management GmbH is affiliated with the referring Sparkassen banks and Erste Bank.

Please also read the “Information about us and our securities services” published by your bank.

Subject to misprints and errors.

Leave a comment Required fields are marked with *

Your email address will not be published. Required fields are marked *