3 Business Council Companies Leave Chamber

Over the past two weeks, three utilities – PG&E, PNM Resources, and Exelon – made public decisions not to renew their membership in the U.S. Chamber of Commerce.  These three companies are members of both our Business Environmental Leadership Council (BELC), as well as the U.S. Climate Action Partnership (USCAP), of which we are a founding member.  We have been asked a lot recently to comment on the significance of these moves, and whether other companies will follow suit. 

The decision by these companies to exit the chamber is another clear indication that the political dynamic surrounding climate change legislation has changed dramatically in the last several years. No longer can businesses be counted on to march in lockstep opposition to mandatory greenhouse gas legislation. In fact, today the companies involved in USCAP and other progressive business coalitions have emerged as some of the biggest and most effective supporters of comprehensive climate change legislation. Business support was critical in moving climate change to the top of the Congressional agenda, and will likely be the deciding factor in steering legislation to enactment.

While we do not comment on the internal decision-making of the companies with which we partner, in the case of PG&E, PNM Resources, and Exelon, the time had obviously come when the differences between their strong commitment to Congressional action on climate change was irreconcilably at odds with that of the Chamber. In his letter to Tom Donahue, CEO of the Chamber, PG&E CEO Peter Darbee wrote:

“A case in point is the Chamber’s recent much-publicized call to put climate change science ‘on trial.’ We find it dismaying that the Chamber neglects the indisputable fact that a decisive majority of experts have said the data on global warming are compelling and point to a threat that cannot be ignored … To the extent … the Chamber earnestly believes these questions should be heard in a courtroom, let’s recall that the U.S. Supreme Court opined on the threat of climate in a 2007 decision. ‘The harms associated with climate change are serious and well recognized,’ the Court wrote.”

Indeed, the Center’s BELC has four main principles, to which all of our companies must commit:

  1. We accept the scientific consensus that climate change is occurring and that the impacts are already being felt.  Delaying action will increase both the risks and the costs.
  2. Businesses can and should incorporate responses to climate change into their core corporate strategies by taking concrete steps in the U.S. and abroad to establish and meet greenhouse gas (GHG) emission reduction targets, and/or invest in low and zero GHG products, practices and technologies.
  3. The United States should significantly reduce its GHG emissions through economy-wide, mandatory approaches, which may vary by economic sector and include a flexible, market-based cap-and-trade program.  Complementary policies may also be necessary for sectors such as buildings, electricity generation, forestry, agriculture, and transportation that will help drive innovation and ease the transition to a low-carbon economy.
  4. Climate change is a global challenge that ultimately requires a global solution.  A post-2012 international climate framework must establish fair, effective, and binding commitments for all developed and major developing economies, including absolute economy-wide GHG emission reduction targets for developed countries.

In the end, each company must decide to what groups and coalitions it belongs, and how the company’s stated values and public policy goals align with those groups and their constructive (or counter-productive) positions.  As the debate over climate legislation moves forward in Congress, we expect that more companies will be looking closely at how these positions align.

Tim Juliani is a Senior Markets & Business Fellow and Manager of BELC Relations