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This module assesses whether the company has a policy on what action to take when industry organisations to which it belongs are found to be opposing “climate-friendly” policies; whether it is not on the Board or providing funding beyond membership of any trade associations that have climate-negative activities or positions; and whether the company is not opposed to any significant climate relevant policy and/or supports climate friendly policies.

All of the companies sampled, with the exception of Tesla, show some level of engagement with a trade association or regulatory body; and yet none of the companies have a publicly available, reactive and embedded policy on engaging with trade associations, as would be widely considered best practice.

Overall most of the sample was lagging on all indicators related to policy engagement. Ford, Groupe PSA, General Motors and Renault are moderately advanced outliers with better defined positions relating to policy engagement and trade associations. Renault documents a cross-company coordination process between strategic departments to establish positions on policies and trade association membership. Ford details a process of engagement with trade associations in which it assumes a case-by-case policy approach to monitor policy positions related to climate change.

Another key indication of good policy engagement is a company’s stated position on significant climate regulations. Only slightly more than half of the companies have publicly disclosed any type of position on significant climate-related regulation. For example, General Motors demonstrated a positive position on the proposal of a US Zero Emissions Vehicle mandate, advocating targets for electrifying light duty passenger vehicles. Groupe PSA demonstrated support for a broad range of climate related policies such as setting Co2 fleet emissions from the world harmonized light duty vehicles test procedure testing procedure, supporting electric vehicle incentive policy as well as supporting a carbon tax in France and the EU. Renault provided a positive stance on circular economy policies promoting battery recycling and end-of-life vehicle recycling initiatives.

Notably, the Chinese companies in the sample, largely manufacturing for the Chinese market, operate in a significantly different policy environment from companies selling in the other large regulated markets of the US, Japan or EU. Six of the seven Chinese companies sampled are either fully or partially state owned and adhere to a highly regulated national market.

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