Engagement on lobbying: Forget the votes, what about the withdrawals?

Paul Hodgson looks at the agreements that prompted resolutions on lobbying disclosure to be withdrawn

There have been 11 votes so far in the lobbying disclosure coalition’s 2018 campaign, generally higher than votes last year, but, more importantly there have been 11 withdrawals of resolutions as a result of companies agreeing to increase their lobbying disclosures and, in some cases, their trade association fees and memberships as well. Victory so far? I would say so. But not all settlements are alike.
Among the earliest agreements were at natural gas company Atmos Energy and utility Consolidated Edison, where Quaker investor Friends Fiduciary was the lead filer, and where the disclosures agreed included the all-important and often omitted trade association membership and fees.
Kate Monahan of Friends said: “In our increasingly political environment, we believe that it’s important for companies to be transparent about their efforts to influence policy, and to ensure that those often-significant expenditures are in line with their public statements and goals so as to minimise reputational risk.” The fund also filed a resolution with SCANA and, after dialogue, withdrew, considering its potential merger with Dominion Energy, which already has an established disclosure policy. “We will revisit next steps if the merger does not occur,” Monahan added. “After successful dialogue with Atmos and ConEd, we withdrew both resolutions, and were pleased with company commitments to increased transparency and disclosure.”
In contrast, agreement at Devon Energy, where the Rhode Island Treasury was the lead filer, did not include trade association disclosures. However, Randy Rice, Deputy Director of Communications, stressed that the engagement with Devon was extremely good faith and, while it did not disclose this year, it was keen on continuing engagement. “Devon has been really engaged with us,” said Rice, “and has made good faith commitments and we are very pleased with how the engagement has gone so far.”
Rhode Island, in withdrawing its resolution, stressed that it expected progress on additional transparency on spending with trade groups and other membership organizations. Devon also let the fund know that it had withdrawn from ALEC (American Legislative Exchange Council] in 2016 and would not be re-engaging with it, and that it had set up an internal ESG steering committee.
Other agreements were reached at Encana, FirstEnergy, Goodyear Tire & Rubber, SCANA Corp, SNL-Lavalin and Textron. In addition, Walden announced that ConocoPhillips had agreed to expand lobbying disclosure, and Walden and 21 other co-filers agreed to withdraw.“ConocoPhillips convened several in-depth dialogues with sponsors of the resolution,” said the announcement. “The ConocoPhillips team included representatives from Government Affairs, Sustainability, the Corporate Secretary’s Office, and Investor Relations.” Walden’s director of ESG shareholder engagement, Timothy Smith, said: “ConocoPhillips recognizes its lobbying activities can affect its business significantly and deserve careful oversight by management and the board along with expanded transparency. We hope other companies will follow this model of good governance.”
Speaking of the agreement at First Energy, Laura Campos of the Nathan Cummings Foundation said that the company had made some commitments to increase disclosure, including disclosing the amount paid for lobbying expenditures, and the names of any trade associations where the dollar amount of their annual membership dues exceeds $50,000 to a single organisation. “We’d have liked more,” she said, “but this was a step in the right direction.” A conversation with the company will be ongoing.
“Goodyear was disclosing some information when the dialogue started,” said Tim Brennan, Treasurer and CFO for the Unitarian Universalist Association. “The company agreed to amend language to make clear they are disclosing all trade association lobbying payments to trade associations receiving more than $50,000. We see that as in line with best practice. Furthermore, they added language clarifying that the report covered both election spending and lobbying. With those improvements, we were happy to withdraw.”
Smith described to me how the target list of companies was compiled: “It includes companies and industries that we believe have a significant impact on public policy and usually have significant lobbying at the federal and state levels. They also include industries where there are lobbying controversies: Pharma, oil and gas, Silicon Valley companies.”
Now for the votes. John Keenan of AFSCME assembled a chart detailing votes so far, as well as comparing votes in 2018 to 2017. It showed that support averaged 1.9% higher in 2018 in the seven companies where proposals were also voted on in 2017. Although two of those seven votes went down, it was by only minimal amounts. On the other hand, in some cases where support votes increased, such as at Honeywell and Boeing, they increased by around 4 percentage points each. The average level of support this year so far was 27.6%, compared to a total 2017 average of 26.5%. However, if figures for controlled or dual class companies such as Tyson Foods, Charter Communications and Imperial Oil are excluded, and where votes were consequently lower, the average level of support this year rises to 33%.