Interview with Thomas O’Neill, Influence Map

EIT Climate-KIC partner Thomas O’Neill is Research Director and Co-Founder of InfluenceMap, an organisation that sees corporate lobbying as the primary obstacle to climate change legislation. Featured on Forbes’ 2018 30 under 30 list, O’Neill is leading the development of InfluenceMap’s corporate lobbying analysis and FinanceMap, a tool that provides public-facing metrics and analysis of the asset management sector through a climate lens. 

To measure and score corporate influence on climate change policy, the team at InfluenceMap developed a comprehensive process of examining a series of publicly available and reliable data sources (e.g. legislative consultations, respected press, CDP responses) and querying them against a set of climate change policy and legislation.

In their last briefing, “The ECB’s Pandemic-related Corporate Bond Purchasing,” released on 15 April, the think tank shows that the European Central Bank’s bond buying programme includes oil majors Shell, ENI and Total, a decision that doesn’t align with the EU’s climate goals, according to InfluenceMap.

“When bailout programmes are carried out in an opaque way, civil society and broader democratic oversight are excluded from any knowledge and capacity to influence the process,” warns Thomas O’Neill, Influence Map.

Why did you decide to track developments of COVID-19-related government interventions? And can you explain the importance of transparency of interactions between companies, financial institutions and government policy mechanisms during crises like COVID-19?

“During a crisis, governments often declare states of exceptions, where the usual rules do not apply, and we see massive transfers of wealth from the public to private companies. These transfers are often unaccountable, hidden deep enough in the financial system that determining what happened can take years to deconstruct and, even if the data does become available, the results are only truly accessible to individuals with knowledge of the financial system. This was true of quantitative easing after the 2008 financial crisis, and the danger is we see the same through the massive bond purchasing programs in the EU and US in response to the COVID-19 crisis. 

Transparency is key, because when these bailout programs are carried out in an opaque way, civil society and broader democratic oversight are excluded from any knowledge and capacity to influence the process. Corporate lobbyists with privileged access to the centres of power are able to co-opt decision making and ensure they are the recipients of cheap or free public money.  In the case of the EU, the priority for lobbyists will be to ensure the EU does not apply its own standards, agreed through the EU taxonomy for sustainable activities, to the bailouts.”

On 18 March, 2020, the European Central Bank (ECB) launched the Pandemic Emergency Purchase Programme (PEPP) to purchase European government and corporate bonds. Under the PEPP, the ECB will buy €750 billion worth of bonds over 12 months, to keep large companies financially solvent. Can you explain how the corporate bonds purchased under the PEPP will impact the future of the European economy?

“Bonds are effectively loans to companies and are often the primary mechanism by which big companies recapitalise themselves and invest in new productive processes. During a crisis, governments will buy bonds over a short period of time to stop otherwise profitable and or socially valuable companies from going bankrupt. The danger is governments will end up propping up and owning, and carrying substantial financial risk for, companies that even before the crisis were not financially viable or indeed desirable. We may see this in the US with the Federal Reserve bailing out US shale companies—many of which have close ties to the administration.”

The ECB did not disclose the monetary amount spent on each corporate bond, but what you noticed is they purchased bonds of fossil fuel production companies such as ENI, OMV, Royal Dutch Shell and Total. Did this come as a surprise to you?

“The ECB bought the bonds of six oil and gas companies over the last three weeks. The annual revenue of these companies is $646 billion, a figure that is close to the entire bond bailout problem. I wonder whether Royal Dutch Shell had to ask the ECB to buy its bonds because it was a bit low on cash, or did someone in the ECB decide buying this bond was the best way to serve the EU economy? Or was zero non-financial consideration given to the merit of buying any one company’s bond, which is equally problematic? Either way, the purchasing is very unlikely to be compatible with the Intergovernmental Panel on Climate Change’s recommendations on state support for fossil fuel companies or the European Green Deal. This is critical, as we know from the response to the 2008 financial crisis, that a fraction of the public money spent could have transformed the composition of the EU economy. The same will be true now.

Without scrutiny and proper transparency, decisions made by the ECB in a matter of days could undermine years of EU policy-making aimed at transitioning our economy (EU Sustainable Finance Action Plan, etc), by financing the fossil fuel value chain for years to come through the PEPP programme.”

You also worked on research on Corporate Climate Lobbying during the COVID-19 crisis. Could you explain a few trends you have identified on how lobbyists are using the COVID-19 crisis to advocate in a manner counter to the Paris Agreement?

“There are two main corporate lobbying objectives: Remove or delay government regulation and ensure they receive government funding. For example, the automotive lobbyist, the ACEA (European Automobile Manufacturers Association) has suggested the virus may prevent automotive companies from meeting European climate regulation, which is pretty unconvincing—especially coming from a group that has spent the last 10 years lobbying against CO2 emissions standards. Unfortunately, in the US, oil and gas companies were successful in achieving an open-ended suspension of the EPA’s enforcement of environmental laws, which is an example of the inevitable absurdity when corporate lobbyists capture governments.”

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