InfluenceMap: Pro-climate Lobbying Can Overcome Resistance
Examples of best practice by corporates are becoming more frequent, although indirect influence continues to fly under the radar.
Investors are increasingly alert to lobbying by portfolio companies against climate-positive legislation, but their increased scrutiny is helping to highlight best practice in advocacy in favour of laws supporting the net zero transition.
Nevertheless, think tank InfluenceMap, which tracks all forms of climate-related lobbying, is encouraging more companies with net zero commitments to actively support ambitious and robust climate-focused policies, following a drastic rise in challenges to sustainability-related rules globally.
“Typically, lobbying is associated with companies that have vested interest in blocking progressive policies,” Kendra Haven, Director of Projects at InfluenceMap, told ESG Investor.
In recent months, notable pieces of legislation globally have come under pressure from companies and governments, including the EU’s Corporate Sustainability Reporting Directive and Deforestation Regulation, as well as the US Securities and Exchange Commission’s climate risk disclosure rule.
The Intergovernmental Panel on Climate Change has identified “opposition from status quo interests” – primarily from fossil fuel companies upstream and downstream – as a key reason for the lack of progress on climate policy globally.
“We need companies [with net zero commitments] to provide a counterforce of positive lobbying to help tip the scale toward climate-related progress,” Haven said. “If a company that has committed to net zero doesn’t engage with policymakers positively on climate, they are leaving those battles to those with more negative vested interests who are louder and unrelenting on this issue.”
The passage of Europe’s Corporate Sustainability Due Diligence Directive – which requires firms to monitor and remediate environmental and human rights harms in its supply chain – was particularly long-drawn out and fractious, with trade bodies lobbying to limit its scope while many corporates and investors backed the legislation.
Best in class
A recent InfluenceMap report has identified 40 companies globally which are engaging with policymakers in ways which promote and support climate action.
‘Global Leaders in Climate Policy Engagement’ assessed companies across three areas: the extent to which their influencing activities align with climate-based science, how active and strategic they are in policy engagements, and the degree of transparency on indirect influence, through industry associations and other third-party groups.
To be identified as a leader in any of the three categories, companies had to have an organisation score at or above 75%, engagement intensity at or above 25% and relationship score at or above 50%.
“We want to put a spotlight [for investors] on the positive players that are doing a good job supporting the policy measures we need to see,” Haven said.
Twenty-three of the 40 best-performing companies are based in Europe, followed by nine in the US and eight across the Asia-Pacific region. Highly-rated companies include L’Oreal, General Mills and Japan-based Daiwa House.
EU energy management firm Schneider Electric is strategically engaged with the EU’s climate policy, the report said. This includes CEO advocacy on measures such as the EU Fit for 55 package, Europe’s Emissions Trading System and building energy efficiency legislation.
At COP27, more than 50 global companies collectively representing US$900 billion in annual revenue signed the Action Declaration on Climate Policy, committing to supporting Paris-aligned climate policy when engaging with policymakers.
Wielding influence
Tracking and reporting on indirect influence remains the most challenging facet of disclosures on lobbying, Haven conceded.
None of the APAC-based companies assessed by InfluenceMap demonstrated best practice in addressing indirect influence. In comparison, European power utilities Enel and EDF both published high-quality reviews of their indirect influence, as assessed by InfluenceMap.
“[Indirect lobbying] is the most nebulous area of the three [categories], because companies can be members of so many groups that are all advocating in their name, and they may not even be fully aware of all of them and the potential discrepancies in these groups’ positions versus their own,” said Haven.
Unilever was highlighted in the InfluenceMap report as a leader in this category, having reported on its indirect influence within its 2024 climate policy disclosure.
Earlier this year, academic research noted that expenditure on indirect lobbying amounted to 32% of direct anti-climate lobbying spending by US-based companies between 2001-22. The research also found that companies spent on average US$277,000 per year on challenging climate-related policies. In comparison, companies lobbying in support of climate policies spent an average of US$185,000.
Higher levels of transparency on climate-related lobbying are being driven in part by investor engagement and collaborative initiatives.
“Investors are increasingly demanding full disclosure of both a company’s direct and indirect influence, in line with existing frameworks,” Haven noted.
These include the Global Standard on Responsible Climate Lobbying, the UN High-level Expert Group’s ‘Integrity Matters’ report, and the AAA Framework for Climate Policy Leadership.
“These frameworks offer different ways of looking at lobbying with different levels of detail when describing what good policy engagement looks like and how to get there,” Haven said.
“Investors showing that they care about the issue is a big part of the story,” she added, asserting that firms that have incorporated the net zero transition into their strategies should consider pro-climate lobbying as critical to their business model.
“Many companies now have net zero and operational decarbonisation goals – so it would only follow that they need to see policy on the table that helps them to meet those goals.”
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