My expertise is working with companies to match their political activity with ambitious climate action. I spent the last 4 years at the World Resources Institute and just started my own consulting outfit. Welcome to Connect the Dots, a monthly newsletter from ClimateVoice!
This month we’re looking at the different ways that companies engage on climate policy, and why it’s so important for companies in all industries to use their powerful political influence to support ambitious climate action.
Action Items
Below we break down three distinct ways that companies engage on climate policy. Which category do you think your employer falls into? As a starting point, think about what trade associations your company belongs to and what public positions your company takes.
Grab a colleague or two, review the three choices, and make an initial assessment.
The Big Picture
Most Companies Are Not Advocating for Climate Policy
To start, we need to make one thing clear – companies’ political influence is most often an obstructive force against climate action, not a supportive one. They might say they support the Paris Agreement or have a goal to go net zero by X date, but politically the bulk of their influence fights against policies that would help achieve this. Some companies even advocate for policies that make the climate crisis even worse.
Put simply, the head says one thing but the hand does another.
To better understand this problem, it helps to break companies into three broad groups.
We’ll call the first group the Obstructors. This is the group that is very intentionally working to thwart climate action. Most are in heavy-emitting sectors, such as oil and gas, and they’ve made an art out of talking green in public and then lobbying against climate regulation/legislation behind the scenes. These companies score PR points by saying the right things and setting ambitious-sounding goals, then they pour money into maintaining a political status quo that harms the planet.
Check out this blog from Union of Concerned Scientists for a good summary of how this plays out.
The second group of companies, and by far the largest group, is those who are generally unengaged on climate change policy. We’ll call them the Sideliners. They might have set climate goals, but it isn’t a top political priority for them. And because it’s not a priority, it’s extremely common for their advocacy impact to inadvertently resemble that of the Obstructors. More on how this happens below.
The last group is companies that consistently use their political influence to advocate for ambitious climate action; we’ll dub them the Strategic Leaders. ClimateVoice describes this type of leadership as “dedicating staff (perhaps through a trade association) to track an issue, be on top of developments in legislatures and regulatory agencies, and to engage regularly to support useful policies (and to stop the passage of bad policies). Crucially, it requires tracking what the opposition is doing to stymie progress, and engaging to counter that opposition.”
Other groups have similar definitions, which we’ll explore at a later date in addition to some of the best practices emerging in this space.
When Companies Stay on the Sidelines, the Polluters Win
So what’s so bad about those many companies who aren’t intentionally engaged with climate advocacy? Isn’t lobbying kind of a messy business anyway? It’s useful to look at this through the lens of climate scientist Michael Mann’s “climate war” metaphor. When it comes to lobbying and political influence, if only one side is playing the game, aka fighting the war, then there’s no question who is going to win.
Do we really want to give the oil and gas industry free rein to dictate our country’s climate policy? Are the Obstructors the group of companies we want to have the loudest voices in shaping our future?
We need more Sideliners to transform into Strategic Leaders. This requires them to take a hard look at what their political influence is actually doing, and to proactively and consistently align it in support of climate action. If they are absent from the fight, then we need them to step up.
After all, no business is immune from the impacts of climate change.
The Drivers for Responsible Corporate Advocacy
If Sideliners are looking for motivation to make a change, there is plenty out there. Many different stakeholders recognize how critical supportive corporate voices are on climate policy, and they are increasingly calling for action.
Investors are a key group. There are growing numbers of shareholder resolutions being proposed that would require companies to report on their political spending, and investor coalitions have penned public calls-to-action and set new standards for accountability.
There are also: increasing NGO campaigns calling for alignment, employee mobilization (ahem, ClimateVoice! But also these folks), and rating agencies such as CDP and InfluenceMap tracking and ranking corporate behavior on climate lobbying.
There are many other positive business synergies that come with responsible corporate climate advocacy, which we cover in the “Deeper Dive” section further down.
So Why Are So Many Companies on the Sidelines?
Momentum for companies to more strategically engage on climate policy continues to grow. However, it’s important to acknowledge that there are real dynamics that can make this challenging. This includes things like companies’ organizational structure, a financial reporting system that rewards short-term profits, memberships in trade associations, fear of backlash, and more.
You can read my breakdown of the seven largest barriers here, and we’ll be touching on them more throughout future issues of Connect the Dots.
The Nitty Gritty
Trade Associations and Climate Obstruction
Trade association membership is one of the trickier barriers at play. These are industry groups that companies join and pay money to for things like education, technical advice, networking, and, very importantly, to lobby the government on their behalf.
Many of the most powerful trade associations have historically lobbied hard against climate action. And they remain a huge obstacle in the path of bold climate policy.
In the U.S., the largest and most influential trade associations represent companies from across different industries, and naturally these companies have different views and priorities on all kinds of topics. This often leads to trade associations adopting “lowest common denominator” positions, or simply representing the position of those industries with the most to lose (or who are willing to pay the most). On climate, this results in representing the interests of the fossil fuel industry.
Historic investments from the IRA legislation combined with strong Environmental Protection Agency regulations will significantly reduce greenhouse gas emission in the U.S. Yet three of the country’s biggest trade associations did not endorse any of these policies.
Sideliner companies have a long-term stake in new climate policies and investments, but aren’t strategically engaged on public policy. In this vacuum, money they pay in dues to their trade associations is being put to work against their own interests.
There’s lots to get into here, and next month we’ll tackle the topic in detail.
For a Deeper Dive
The Business Case for Advocacy Alignment
Above we touched on the different stakeholders calling for greater leadership on corporate climate advocacy, but there is a strong business case as well. So, if you’re looking for more ammunition to make the case to your company’s leaders on why they should engage, consider the eight points below.
Coming soon...
Next month we’re going to go even deeper into trade associations, including the pitfalls, what emerging best practice looks like, and what you can do to learn more about your own company’s influence through these third parties.
Have a specific question about Responsible Corporate Advocacy that you’d like us to address? Shoot your questions to us with subject line "Connect the Dots."