When we write a report at UCS, we make the full methodology and all relevant data that went into the report available, so that others may understand how and why we draw our conclusions. Anyone may review our methods and suggest improvements; in this way, those who read the report can have confidence in our recommendations.
This was especially important with regard to A Climate of Corporate Control, our investigation that examined how leading U.S. companies influence public and policymaker understanding of climate science and support for climate change policy action. We gathered data from a great many sources, including company websites, tax filings, comments on government findings, annual reports, shareholder actions, congressional testimony, leaked documents, and interviews with company executives.
One of the many topics we examined was how companies support various non-governmental organizations that influence policy. We chose to focus on organizations that were most active and influential on climate science and policy issues as measured by visibility in the news media and independent assessments of think tank activity and influence (for more specifics on methodology, see page 52 of the report). One of these was the Reason Foundation, which we found received support from the Occidental Petroleum Charitable Foundation and from the General Electric Foundation.
General Electric’s Influence over the Discussion around Climate Change
Reason magazine’s Ron Bailey took exception with our claims about General Electric funding the Reason Foundation (the magazine is editorially independent from the foundation). He noted that we counted funds GE gave to several non-profit groups through an employee matching gift program. These programs allow individual employees to choose where their donations (and GE’s matching gifts) go. In contrast, funds from GE and its corporate foundation are directed by company executives. We have updated the report to remove references to the matching gifts.
The data still support our overall conclusion that GE has taken contradictory actions when it comes to climate change science and policy. While we now conclude that the company has only supported think tanks and other outside groups that accurately represent climate science, our finding that it is a member of trade groups that take contradictory positions on climate change still stands (see figure four of the report, page 13). GE representatives sat on the boards of pro-climate trade groups, such as the American Wind Energy Association, and the boards of anti-climate trade groups, such as the National Association of Manufacturers. In addition, GE donated to the Yes on Prop 23 campaign, which would have overturned California’s climate change law. (A detailed company profile can be found here.)
We looked again at the 2009 and 2010 foundation tax filings (IRS Form 990s) for all 28 companies in our sample and found that the General Electric Foundation was one of only a few companies that separated out matching gift donations from other donations. Since the donations from these company foundations are either labeled with a purpose other than a matching gift or are generally larger sums (in the thousands of dollars), we are confident that these donations are not likely to be matching gifts. We invite any company in the report to provide documentation to the contrary.
The Reason Foundation’s Take on Climate Science and its Corporate Support
Mr. Bailey also disputed our characterization of the Reason Foundation as a group that misrepresents climate science. I drew his attention to our criteria for misrepresentation of climate science (outlined in our methodology, appendix A of the report) and showed him where on the foundation’s website we found information that led us to characterize Reason as such. In his response, Mr. Bailey did not refute our claim that the Reason Foundation misrepresents climate science. He also neglected to discuss a $10,000 donation the foundation received from the Occidental Petroleum Charitable Foundation and instead focused on General Electric.
The Trouble with a Lack of Disclosure from Corporations
The public information we have on each company’s donations to pro-climate or anti-climate entities varies considerably. In terms of donations to think tanks and other outside organizations, many companies do not choose to distinguish different types of gifts.
Some companies may choose to make donations directly to these groups rather than through their corporate foundations, avoiding disclosure completely. In fact, a recent study conducted by Center on Philanthropy at Indiana University estimated that only 31 percent of corporate donations were made through corporate foundations in 2010.
When it comes to donations to trade groups, companies can be similarly secretive, and the picture there is far from complete. As my colleague Celia wrote the other day, we don’t know what we don’t know.
Inappropriate Corporate Influence over the Process Persists
Many of the country’s leading companies have taken contradictory actions when it comes to climate change science while pumping a tremendous amount of resources into influencing the discussion. Corporations skew the national dialogue on climate policy in a variety of ways—making inconsistent statements across different venues, attacking science through industry-supported organizations, and taking advantage of the secrecy allowed them by current legal and regulatory structures.
Solutions are complex, but include the following, centered around transparency and accountability:
- Companies should disclose more information on how they influence the conversation on climate change and other issues of public interest.
- Congress should investigate ways to require more disclosure of corporations’ political activities.
- The SEC should require companies to disclose their political contributions and should specifically require that climate change be addressed in reports on business risks.
- Investors and consumers should continue to work both individually and collectively to demand transparency, accountability, and integrity in the private sector.
- The media should be mindful of potential conflicts of interest among the experts and other individuals they rely on for information, and disclose such conflicts when found.
On these points, we should all be able to agree.