Some 78% of firms provide no public disclosure about their climate-related lobbying activities, a new study by Danu Insight has found.
According to the study, Silent Influence: Are companies failing to govern their climate lobbying?, corporate lobbying is a ‘hidden force that shapes and regularly undermines climate policy’, with a significant information data gap between companies that openly disclose their climate lobbying activities, and whether they have effective internal governance structures in place to manage it.
The analysis, which analysed the public disclosures of more than 8,500 listed companies around the world, applied two proprietary frameworks – a Climate Lobbying Transparency Framework, which assessed disclosure of direct and indirect lobbying, and a Climate Lobbying Governance Framework, which evaluated internal policies, board oversight, and alignment checks with stated climate goals.
Climate lobbying governance
As it found, some 75% of firms show no evidence of having a climate lobbying governance process.
Some 1,857 businesses achieved a low score (of 1 or 2) in Danu Insights’ assessment, indicating that they have disclosed some reference to how they manage their climate lobbying risk, but the associated policies or processes remain unclear.
In addition, less than 4% of companies appear to have sufficient governance structures in place to manage climate lobbying risks and ensure adequate alignment.
Strategy misalignment
‘Insufficient lobbying governance processes often leads to misalignment between companies’ stated climate commitments and their lobbying actions, through inconsistent lobbying positions or membership in trade associations, which can inadvertently undermine net-zero policy,’ the report noted.
‘The lack of corporate accountability around climate lobbying, through public data, may also pose reputational and financial risks to investors and other stakeholders.’
As the study noted, businesses with high governance scores are more than six times more likely to also have high transparency scores.
Danu Insight described the ‘widespread deficiencies’ in climate lobbying transparency and governance as representing ‘significant unmanaged risks’ for companies and investors, calling on governments to standardise and regulate lobbying reporting frameworks. Read more here.
