September 26, 2023


Business&Finance Specialists

Big Companies Are Funding a Campaign to Kill the Climate Bill

7 min read

Four years ago, when President Donald Trump announced that he would take the United States out of the Paris Agreement, the world’s largest companies leapt into action.

Tim Cook, Apple’s CEO, personally beseeched Trump to remain in the pact. Bob Iger, Disney’s chief executive, resigned from a White House advisory council in protest. Goldman Sachs’s CEO, Lloyd Blankfein, sent his first-ever tweet just to denounce the exit. Within days, hundreds of U.S. companies had signed their own Paris Agreement pledge, promising to cut their climate pollution more than 26 percent by 2025, as compared with 2005 levels.

Today, many of those same companies—including Apple, Amazon, Walmart, Nike, Target, and dozens of others—are funding efforts to kill the Democratic reconciliation bill, which contains significant climate provisions that would allow the U.S. to meet its Paris Agreement goals.

This campaign is a quieter one. The companies are financing it through their membership fees in pro-business trade groups such as the Business Roundtable, a coalition of CEOs that lobbies for corporate-friendly policy.

That campaign seems to violate those same companies’ climate commitments. The bill would eliminate nearly 1 billion tons of carbon in the next decade, according to an analysis from the Rhodium Group, an energy-research firm. Its climate provisions “would be the largest single portion of a comprehensive plan for the U.S. to meet its nationally determined contribution” under the Paris Agreement, Trevor Houser, a partner at Rhodium, told me.

Because of the long timelines involved in actually building zero-carbon infrastructure—it can take several years to permit, construct, and connect a solar or wind plant to the power grid—the bill almost certainly represents the country’s final chance to meet those 2025 goals, Jesse Jenkins, a mechanical-engineering professor at Princeton, told me. “We’re already talking about 2022 spending, which leaves just three years ’til 2025. If this bill doesn’t pass now, the window to move the needle has closed,” he said.

“It’s either this [bill] or no federal policy, and that means that we would miss the 2025 Paris goals, and the 2030 ones too, probably,” he said.

The Business Roundtable is one of the leaders in the fight against the bill. It has dispatched C-suite executives to meet with lawmakers, and it has orchestrated an expansive opposition campaign that includes TV and radio commercials, in-person lobbying, and more than $150,000 in Facebook ads displayed to users in purple states. In one such ad, the group warned that the reconciliation bill would be “bad for Montana workers and the economy.”

If a worried Montanan went to see who ran that ad, a list of the Business Roundtable’s well-credentialed members was only a few clicks away. It includes Tim Cook, the Apple CEO; Sundar Pichai, the CEO of Google’s parent company; Doug McMillon, Walmart’s president and CEO; and the leaders of Target, Nike, 3M, and more.

The Business Roundtable says that it opposes the bill because it would raise taxes on companies and some high-income spending. “Congress has unnecessarily tied climate action with $1 trillion in tax increases on job creators, which we strongly oppose, and trillions in non-climate-related spending,” Joshua Bolten, its president and CEO, told me. “There is no policy reason to link strong action to address climate change with unrelated, harmful tax policy and substantial spending, which would not only worsen Americans’ already dangerous debt burden but also undercut the competitiveness of the U.S. economy, businesses, and workers.”

It’s true that Democrats are pursuing their entire domestic agenda in a single bill, as a procedural move to avoid some of the strictures of the Senate filibuster, which Senate moderates such as Joe Manchin of West Virginia have said that they will not alter. Because that move can only be used several times at most during a session, the party’s program has been crammed into one piece of legislation.

But while the substance of the Business Roundtable’s concern seems to dwell on the reconciliation bill’s new tax measures, the group is not distinguishing between its climate programs and its tax measures in its advertisements. Its intent is to kill the partisan reconciliation bill while preserving the bipartisan infrastructure bill, which does not contain the same robust climate policies.

The reconciliation bill’s tax provisions—which would finance some of the climate spending—are also opposed by ExxonMobil and the American Petroleum Institute, a fossil-fuel trade group. Those oil giants have run hundreds of thousands in Facebook ads opposing the reconciliation bill’s tax hikes, according to Axios.

The Business Roundtable’s opposition is surprising because, in 2019, the group issued an influential statement rejecting the idea that corporations are accountable solely to their shareholders. Companies should also “protect the environment” and respect their workers, suppliers, and communities, the statement said.

Some members of the Business Roundtable have distinguished the climate programs in the bill from its tax policy. Lisa Jackson, a vice president at Apple and a former EPA administrator, has said that Apple supports a clean-electricity standard, a mechanism in the bill that would require utilities to generate more of their electricity from zero-carbon sources every year. After receiving an inquiry related to this story, Amazon announced that it supported “investments in the infrastructure and [reconciliation] bills to lower emissions in key sectors like energy and transportation.” (Earlier this year, it also endorsed raising the corporate tax rate.)

Netflix, LinkedIn, and 3M, three other members of the Business Roundtable, have also explicitly endorsed a clean-electricity standard.

But none of those companies has left the Business Roundtable, meaning their membership dues are still funding an effort to kneecap the bill. “We can engage with organizations—even when we might have differing perspectives on certain issues—to raise awareness and understanding on issues of importance and drive collective action,” Sean Lynch, a spokesperson for 3M, told me.

Apple declined to comment on the record for this story. Target and Nike did not respond to multiple requests for comment.

Other members of the Business Roundtable said that the group does not speak for them. ​​“Walmart continues to support the Paris Agreement and advocate for strong and cohesive U.S. climate policy, but has not taken a position on any specific bill,” a spokesperson told me in an email.

Jenkins, the Princeton professor, said that these comments didn’t go far enough when those companies remained in the Business Roundtable, which is “actively working to sink the whole thing.”

“It’s one thing to say, ‘We have legitimate, serious concerns about the corporate-tax increase, but we support the climate provisions’—but that’s not how [the Business Roundtable] has approached the reconciliation bill at all,” he said.

“A bunch of firms have been publicly supportive of this bill or some federal climate policy. They’re stepping out and trying to lead. But I don’t think you can do that while supporting trade groups that are actively trying to tank the policy.”

Jenkins contrasted the Business Roundtable with the Edison Electric Institute, the trade group that represents investor-owned utilities. Like the Business Roundtable, its membership is divided on the bill: Some, such as Exelon, the country’s largest utility, have enthusiastically endorsed it; others, such as the Ohio-based American Electric Power, are more skeptical or openly opposed. As such, the institute had stayed “lukewarmly neutral” on the bill, Jenkins said.

It’s not 2001 or even 2009 anymore. With rare exceptions, the largest companies in America no longer bankroll explicit climate denial as they once did, either directly or indirectly. Dozens of powerful firms have committed to reducing their climate pollution in the next decade and achieving net-zero by 2050 or earlier. Many executives have also pledged support for some sort of ideal, though curiously unspecified, federal climate policy.

But that hypothetical support isn’t enough to reduce emissions, and with climate change so far advanced, delay and procrastination amount, in practice, to a kind of denial. As much as executives might want to wait for a perfect climate bill, packed only with inexpensive provisions and stripped of all inconveniences, 40 years of federal inaction on climate change should make it clear that no such bill is coming. Climate change is a difficult problem and it will require powerful people—the ones who care, at least—to compromise. If this reconciliation bill fails, then the history of climate action in the U.S. suggests that lawmakers will not try again until 2032. By that time, the world’s average temperature will have likely already cruised past 1.5 degrees Celsius.

Executives may not like some aspect of the reconciliation bill, and they should say so: That’s life in a democracy. But if this bill fails in its entirety—which is the outcome that the Business Roundtable hopes to achieve—then that would be a damning indictment of U.S.-style liberal capitalism. It will be clear to people at home and abroad that American society circa 2021 cannot sufficiently organize itself to actually fight climate change, and the CEOs’ platitudes about the Paris Agreement will be revealed as just that. The hotter, angrier, and poorer world that will result will not take them seriously, and neither should we.