We recognise that corporations are manifestly involved in the progress of policy and legislation formation (in all areas, not only climate change) affecting their business and they regard the need to do this as part of their operating model. Research has indicated that this influence likely extends beyond the activities normally associated with the word "lobbying" (e.g. donations to clearly motivated political actors) and includes the domination of the public discourse on climate change science and policy via their hugely powerful and funded messaging tools (e.g. advertising, PR, social media, access to influential meetings) as well as the use of influencers like trade associations and advocacy groups. Details of our analysis of corporate influence in climate change policy can be found here.
We stress here that our assessment and scoring platform does not claim to measure actual corporate influence over the climate change policy process. Such an assertion would need to involve vastly more cause-and-effect substantiation, which we do not attempt. Rather we assess and score corporations on a variety of activities that respected authorities (e.g. the UN's Caring for Climate) have asserted are highly likely to influence policy. On this site when we use the term "corporate influence" it should be regarded in this context.
A process of global, regional and national consensus building, policy formulation and legislation/fiscal measures on climate change has been underway for the last two decades and is on-going. In our assessment of corporate influence, we consider the process from consensus forming on climate science to legislative interventions at various levels and take this process to be "climate change policy". We consider regulations/laws and guidelines as well as fiscal interventions such as carbon taxes and continuation of subsidisation of coal, for example. Importantly, we consider amendments to mainstream regulations and fiscal policy driven by or affecting climate change. See here for our informal database of major climate policies and regulations in the EU, US and Japan.
To measure and score corporate influence on climate change policy, we have developed a comprehensive process of examining a series of publicly available and reliable data sources (e.g. legislative consultations, respected press, CDP responses) and querying them, for each corporation, against a set of climate change policy and legislation related queries (e.g. position on a carbon tax, energy efficiency standards). We score each data source/query intersection (or cell) on a 5-point scale, with clearly consistent evidence and guidelines for our scorers. There are 96 such scoring cells at present and the organizational score for each corporation is computed over these, by our proprietary algorithm that accounts for weightings and irrelevant data sources/queries. This is combined with a relationship score, which is a reflection of the external influencing agents that have links with the corporation. The combination of the organizational score and relationship score places each corporation in a performance band so they may be compared. Details of our method are here.
Our analysis and scoring is focused on an organization's comments, interactions and influence on policy and legislation. We do not consider internal strategy, activities and performance of a company on climate change related issues, such as CO2 emissions, use of various energy forms and the company's business activities if these have no direct relevance to policy and legislation forming. There are numerous other research streams (e.g. CDP.net) dealing with corporate performance on climate and we do not wish to widen our remit where adequate coverage exists.
If a particular query does not apply to a data source (e.g. external data sources do not apply to transparency queries), OR for a particular corporation the data is unavailable (e.g. due to our research limitations, or it does not disclose through a voluntary scheme like CDP), we mark the weighting cell with "NA" (not applicable), and the weighting is set to zero. Its original weighting is redistributed evenly through other data points for this query. If no evidence is available (after a search) for a particular cell, it is marked "NS" or not scored with the same impact on the weightings as NA. So each organization has its own specific weighting matrix depending on data availability and relevance. This means that a company will not be impacted by its lack of involvement in policies that do not affect it and conversely will be more accurately assessed for those that do.
To measure and score corporate influence on climate change policy, we have developed a comprehensive process of examining a series of publicly available and reliable data sources (e.g. legislative consultations, respected press, CDP responses) and querying them, for each corporation, against a set of climate change policy and legislation related queries (e.g. position on a carbon tax, energy efficiency standards). We score each data source/query intersection (or cell) on a 5-point scale, with clearly consistent evidence and guidelines for our scorers. There are 96 such scoring cells at present and the organizational score for each corporation is computed over these, by our proprietary algorithm that accounts for weightings and irrelevant data sources/queries. The organizational score is expressed as a % with 100% representing very supportive influence on climate policy. We note here that a corporation and an influencer (e.g. a trade body, chamber of commerce, advocacy group) are scored in exactly the same way to arrive at their respective organizational score.
A corporation, as well as its organizational score will have a relationship score. It is computed by aggregating the organizational scores of the Influencers (trade bodies etc.) it has relationships with, weighted by both the strength of these relationships and the relative importance of the Influencers towards climate change policy. A corporation will have a number of relationships with Influencers mapped in our database. In turn these Influencers will themselves have organizational scores as computed by exactly the same method as was done for the corporations. Such relationships vary in nature and strength and we account for this in our assessment by assigning relationship strengths. For example a trade association may have 2000 member corporations with 10 of them on its executive committee. The 10 executive committee members would have strength of 8 compared to 3 for the regular members, for example. Details of how we compute this can be found here. The relationship score is expressed as a % with 100% representing very supportive influence on climate policy. In general if a corporation's organizational score is roughly equal to its relationship score the corporation's positions and interactions with climate policies are in line with those of the key influencers it has relationships with. If the organizational score is much higher than its relationship score, the trade bodies and other influencers the corporation is involved in are misaligned with the corporation on climate policy.
For Corporations, the organizational scores and relationship scores are combined to result in an Overall Rating that places the Corporation in a performance band. There are 20 performance bands from A+ (representing a total score from 95-100%) through to E- (a score of 25-30%), with scores below 25% falling in the red "F" band. So it is a relative scale. Most companies fall within the 45-55% band that indicates they are neither actively obstructing nor supporting the climate policy process. A score of 60% or more indicates the company is actively supporting polices and regulations towards a low carbon future. Conversely lower than a 40% band generally indicates obstructing behavior. As different sectors face differing regulatory issues, it is most useful to compare the performance bands of corporations within the same sector.
Our scores may also be regarded as a measure of a corporation's readiness in the case of a shift towards a low carbon regulatory regime, based on the assumption that their support for this originates from a forward thinking competitive strategy. For example, a corporation who is actively supporting low carbon laws and measures may also be engaged in a strategic shift in its own activities in this direction, thus potentially giving it competitive advantage if legislation should move swiftly to disfavor GHG emissions. Conversely a corporation engaged in overt or covert obstruction of climate change policies may be unlikely to be strategically shifting its activities in a similar manner. This analysis may be pronounced in sectors which will be heavily affected by a fast shift to a low carbon regulatory regime but are not engaged in selling GHG emitting fuels directly, such as the automotive, electric utilities and chemicals processing related sectors. Moreover, some research suggests that political donations are followed by decreased shareholder returns. We will be actively analyzing our results from this regulatory readiness viewpoint, with selected partners in the future.
Climate change policy and regulations will increasingly affect all corporations regardless of sector, but clearly some will be affected more than others depending on region and regulation. Our performance bands are perhaps best used when corporations from the same sector are compared. A great example is the automotive sector, where manufacturers who are strategically positioning themselves for a low carbon future will support accelerated CO2 emission standards as bolstering their competitive position. Similarly comments can be made about energy intensive users like chemicals, building materials and utilities. Comparing the InfluenceMap performance band of BMW with that of Google, in isolation of information on how these companies perform with respect to their direct competitors may not be as meaningful.
We choose the top 100 of the 2014 Forbes Global 2000 not including state owned enterprises (e.g. Sinopec) and financial companies and the two largest privately held companies, Cargill and Koch Industries. We also include Tesla Motors, a groundbreaking company which has gained financially from zero emission vehicle legislation in California and is likely on the cusp of breaking into the Forbes list we are concerned with. An analysis of corporate influence on policy by a state owned enterprise is not clear, hence our omission for the time being. Financial firms take up 40% by number of the top 100 and resource limitations mean we have not prioritised these in our initial launch. In addition, we choose the top 35 private sector trade associations, federations and advocacy groups that represent the interests of companies, based on a mix of criteria (a) their influence on policy in general and size and (b) how active they are on climate policy and legislation, both assessed by numerical metrics. We purposely did not select any climate specific organizations in the initial phase, to avoid cherry picking from a list of hundreds.
We recognise that China accounts for roughly a quarter of global GHG emissions and that policy and regulations from its governmental system, along with adherence by the corporate sector is extremely important to a low carbon future for the planet. Most of this corporate sector, especially the fossil fuels, chemicals and automotive sectors remain under government control if not majority ownership. So the meaning of corporate influence over climate policy requires additional analysis and detailed in-country research of China state-owned corporations. We will endeavor to undertake this in the near future, as resource constraints mean this was not possible in our initial launch.
The US Lobby Act of 1995 places certain disclosure requirements on lobbyists and corporations and provides for official databases, which are in part used by well respected NGOs such as OpenSecrets.org. We do not uses these extensively for two reasons. Most importantly, the motivation of the lobbying spend is not sufficiently clear for InfluenceMap to link to specific climate change regulatory strands. Most global multinationals fund a range of political targets for a range of reasons and we do not feel the links are solid enough for this to be one of our data sources. Secondly our analysis of corporate influence stretches far beyond traditional lobbying spend. CEO messaging, trade association capture of technical details of regulations, public facing capture of the climate change debate and other means may be equally or more effective tools. That said, we will use this data if carefully and convincingly analysed by the media or research group so the links to climate change policy are clear.
Service sectors like retail and telecommunications do not have nearly as much engagement and influence (whether positive or negative) on climate policy as the energy and manufacturing sectors. So there are very few data points on which to base our query and score. Hence a single piece of evidence on a particular query (e.g. disclosure) could distort the organisation's score and performance band. We recognise ours in an imperfect system in this regard and encourage users to compare companies within sectors and also examine the pieces of evidence we have collated rather than focus too much on the overall score. We include an engagement intensity metric to provide a measure of the extent to which the company is engaging on climate change policy matters. It is a number from 0 (no engagement at all) to 100 (full engagement on all queries/data points). Clearly the energy companies will have a far greater level of engagement that retailers. Note that this is the reason we excluded financial firms from our initial ranking - they are numerous in the Forbes top 100 but have very little engagement on climate regulations.
The engagement intensity (EI) is a metric of the extent to which the company is engaging on climate change policy matters, whether positively or negatively. It is a number from 0 (no engagement at all) to 100 (full engagement on all queries/data points. Clearly energy companies are more affected by climate regulations and will have a higher EI than, for example retailers. So an organization’s score should be looked at in conjunction with this metric to gauge the amount of evidence we are using in each case as a basis for scoring. On our scale, an EI of more than 35 indicates a relatively large amount of climate policy engagement.
Our database contains over 10,000 pieces of evidence backed up by what we consider respected publicly available external sources relevant to our subject matter and the organizations we are ranking. We add to this database daily as new information is available and our scores change in real time. We welcome input from interested parties should any typographical errors, mistakes, perceived misinterpretation of data or other issues be noted, and we stand ready to review our information as comments are made available. We further point users to our Terms and Conditions for issues relating to the appearance of external data on our site and reliance on our platform.
We have a system of receiving alerts from hundreds of web sites with our preset searches and monitor these alerts daily, adding evidence and revising scores in real time. We also encourage interested and knowledgeable parties to comment on and contribute to our website and we will add to our database provided credible documentation exists.