Green Groups Feel Burned by Auto Industry Climate Lobbying

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By David Schultz

The auto industry’s push to relax federal fuel efficiency standards for its cars and trucks has damaged its relationships with some of the environmental groups that it works with on achieving corporate sustainability goals.

Carmakers have requested that the Trump administration rescind an Obama-era decision that kept vehicle emissions standards in place through 2025. It’s a request the administration is reportedly planning to grant as early as this week, though official agency spokespeople declined to offer details.

While this would represent a big win for the industry’s lobbying efforts, it could come at the cost of alienating the environmentalist and sustainable investing groups that carmakers tout as partners.

General Motors Co., for example, highlights in its annual sustainability reports the company’s work with the climate advocacy investor group Ceres. However, the industry’s actions on this issue since President Donald Trump took office have left the group feeling betrayed, according to one of its senior leaders.

“We’re obviously disappointed with this stance,” Carol Lee Rawn, director of Ceres’ transportation program, told Bloomberg BNA. “We feel like it’s short sighted.”

Fuel Economy

Even before the change in administrations, the auto industry has been seeking a relaxation in fuel economy standards, which it argues will lead to inflated car prices that will drive down sales. The federal standards are currently set at a company-wide average of 54.5 miles per gallon, or its equivalent, through 2025.

Establishing the standards was, along with the Clean Power Plan, one of the Obama administration’s signature actions on climate change. Just days before Trump took office, the Environmental Protection Agency formally rejected the auto industry’s requests to lower these standards.

Since then, the industry’s main trade group, the Alliance of Automobile Manufacturers, has been lobbying the new head of the EPA, Scott Pruitt, to rescind or at least reopen his predecessor’s decision.

It “may be the single most important decision that EPA has made in recent history,” Mitch Bainwol, the Alliance’s president, wrote in a Feb. 21 letter to Pruitt. The Obama administration’s choice to leave the current standards in place “is riddled with indefensible assumptions, inadequate analysis and a failure to engage with contrary evidence.”

Sustainability

Ceres isn’t the only disappointed environmental group with ties to the auto industry. Kevin Moss, global director with the group World Resources Institute, told Bloomberg BNA that carmakers “should support strong emissions standards that will reduce pollution, save consumers money and encourage innovation.”

GM also highlights on its website the company’s involvement in a WRI-founded renewable energy program. Other environmental groups involved in the program either didn’t respond to Bloomberg BNA or wouldn’t say whether they would continue to work with GM.

Rawn also said it was too early to say whether Ceres would rescind its praise of the company.

Green Investing

Both GM and its competitor, Fiat Chrysler Automobiles, tout the high rankings they have garnered from the sustainable investing group CDP, which are influential among investors with social responsibility goals.

Kate Broderick, a CDP spokeswoman, wouldn’t comment specifically on whether these companies will maintain their rankings in the future. But she told Bloomberg BNA that “we reserve the right to exclude companies when there is information available in the public domain which suggests that this is appropriate.” Broderick said that the CDP’s rankings factor in an industry’s support for carbon dioxide regulation.

Another socially responsible investing group, the Zurich-based RobecoSAM, which assembles the Dow Jones Sustainability Indices, said the industry’s actions here would not necessarily prompt the group to sever its relationships with carmakers.

Jürgen Siemer, a senior analyst with RobecoSAM, said lobbying done in a transparent and legal manner would not be reason alone to downgrade a company. However, Siemer did tell Bloomberg BNA he would be closely tracking the carbon emissions of these companies’ fleet of vehicles in the future, regardless of whether the EPA does or doesn’t relax its standards.

Spokespeople with both GM and Fiat Chrysler declined to comment, referring Bloomberg BNA to the Auto Alliance, which also declined to comment.

Self-Defeating?

The carmakers’ lobbying on this issue has also angered several Democratic lawmakers who are active on environmental issues. Sen. Edward J. Markey (D-Mass.) said the auto industry’s fear of emissions standards is ultimately self-defeating, just as it was back in the 1970s.

“I was in Congress in 1979 and I voted to bail out Chrysler. I voted to do it again in 2009,” Markey said at a press conference responding to reports of the EPA’s upcoming decision. “In each instance, they put themselves into an instance where their cars weren’t selling and they made themselves vulnerable.”

Markey was joined by his colleagues Jeff Merkley (D-Ore.) and Thomas R. Carper (D-Del.), the top Democrat on the Senate Environment and Public Works Committee.

To contact the reporter on this story: David Schultz in Washington at dSchultz@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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