How can companies use their lobbying to drive a net zero future?
12 December 2018 – Dylan Tanner, Executive Director and Co-Founder of InfluenceMap on the need for the companies to use their lobbying for good and drive change at the pace and scale required for a net zero future.
The Paris Agreement was unique for the breadth of support garnered from a large number of the world's largest corporations. Throughout the Agreement’s negotiation, CEOs shared the stage with world leaders and pledged investment and realignment of their business models. Supported by groupings such as the We Mean Business coalition, over 1,000 global corporations and investors signed on to a range of efforts towards a 'low carbon revolution'. In short, in 2015, business seemed to become a proponent of ambitious action on climate change, rather than an obstacle.
Yet with the ink barely dry on the Paris Agreement, this support appeared to fade. In February 2016, a coalition led by the US Chamber of Commerce successfully halted, via a Supreme Court decision, the implementation of the US government's most ambitious climate policy measure – the Clean Power Plan. The US government rolled back key climate-motivated vehicle efficiency standards this summer; the culmination of a lobbying process initiated by the global automotive industry prior to Trump’s inauguration as President. In Europe, climate policy remains under threat from trade groups such as BusinessEurope, which effectively opposed and undermined ambition with regards to the EU’s flagship policy, the Emissions Trading Scheme, throughout 2015–2017.
These same trade associations count names like Google, Proctor & Gamble, Pfizer, Toyota and Intel as key members – all companies who have made strong climate commitments. So why does this misalignment persist? The explanation is simple. Companies tend to focus their strategic lobbying on a small number of issues that ultimately affect their survival. For the fossil fuel economy, climate policy is one of these, and this priority is reflected in the intensity of lobbying from both individual companies and their trade groups.
Despite the Paris Agreement, vested interests remain a key blockage to ambitious climate policy, as they continue to deploy effective lobbying to block urgent policy progress throughout the world. This comes as the UN Intergovernmental Panel on Climate Change (IPCC) Special Report on 1.5 degrees (IPCC) and others warn of accelerating climate change risks, warnings amplified by vivid images of weather-related catastrophes around the world in 2018.
However, if deployed tactically, the combined political capital, the technology, healthcare, finance and other sectors (largely uninvolved in climate policy advocacy at present) has the potential to overcome this policy blockage. For example, sometime this summer, the combined market value of Facebook, Amazon, Alphabet, Microsoft and Apple exceeded $4 trillion, not far behind the aggregate $5 trillion market value of the entire global oil and gas production sector. Despite this shift in economic power towards non fossil fuel related sectors, the balance of lobbying efforts on climate remain firmly skewed towards the negative, with many powerful sectors and companies on the sidelines, as outlined in InfluenceMap’s 2018 release Corporate Lobbying – How Companies Really Impact Progress on Climate.
Some progress has been made to correct this. The recently announced Climate Action 100+ process, designed to corral the power of the world’s largest institutional shareholders to engage with the world’s most climate-critical companies clearly has lobbying on its radar (£). A growing group of powerful companies are strategically lobbying for a policy pathway to match their energy transition plans, including Unilever and European utilities like Enel and Iberdrola.
These moves are promising, but the 'silent majority' of global corporations in sectors like finance, tech, retail and healthcare, most of whom have strong top line ambitions in climate, need to wield their economic clout especially in key cross-sector trade groups to ensure their positive climate positions prevail. The tools to do this clearly exist. The UN published its Guide for Responsible Corporate Engagement in Climate Policy in 2013 outlining the scope of activities constituting influence on policy. The We Mean Business coalition and its partners provide convening power for joint corporate efforts on policy engagement. InfluenceMap’s global analysis of the climate lobbying landscape provides a framework for companies to assess misalignments including with key trade associations. Genuine corporate climate leaders need to show the leadership and good governance to address these misalignments and further, deploy real political capital towards shifting policy aligned with their climate goals. The A-List of Climate Policy Engagement identifies 20 global companies who are doing just this. They all have something in common – a mandate to act decisively on climate policy engagement from the very top of the company.
According to Christiana Figueres, former Executive Secretary of the UNFCCC, "domestic legislation on climate is the absolutely critical, essential, linchpin between action at the national level and international agreements". Now more than ever, the hugely powerful forces of finance and positive corporations need to throw their political weight behind mandated regulators and allow them to do their jobs on climate.