Why Does Climate Lobbying Matter?
Since the Kyoto Protocol of 1997, implementation of climate-motivated policy has been hindered worldwide by corporate lobbying
Climate change is increasingly manifesting around the world. Past international environmental crises – such as acid rain or ozone depletion – have been remedied only by strong political governance and binding regulation. By comparison, the policy response to climate change has been starkly inadequate. For example, 20 years after Kyoto, fewer than 15% of emissions are covered by binding carbon pricing systems. This inaction is due to unprecedented lobbying by industry with ties to the fossil fuel economy. A number of key regulations that have suffered are highlighted on the map.
- Lawsuits from trade groups in 2015-2016 halted the US Clean Power Plan
- Industrial lobbying has hindered the EU’s flagship Emissions Trading Scheme from its introduction in 2005
- Since 2015, climate rules on vehicles have been compromised in the US and the EU by auto industry lobbying
- Vested interests are directing Japan to pursue a coal future at home and in SE Asia
- Industry capture of UN bodies for shipping and aviation has undermined the development of critical climate policy for the sectors
Without addressing such persistent negative lobbying, global progress on climate change remains unlikely.
The Evolution of Climate Lobbying
While tactics have changed, critical regulation continues to be blocked and the prevailing narrative on climate remains under siege
Since the prospect of regulation began to appear likely in the late 1980s, corporate lobbyists have employed two strategies to hinder climate policy progress. Firstly, capture of the public narrative on climate change (including climate denial) and, secondly, direct lobbying to block or dilute binding regulatory measures.
In the past, companies like Exxon have sought to weaken the scientific consensus on climate through adverts, strategic CEO messaging and the funding of think tanks. However, as the global climate consensus has strengthened, this strategy has evolved; for example, companies have conceded that climate change is man-made but have continued to question the extent of its impact or consequences for business.
At the same time, corporations with involvement in the fossil fuel value chain have challenged regulation head-on by stressing its potentially negative impact in terms of jobs and growth. Since the Paris Agreement in 2015, the worst of these lobbying activities have been increasingly pushed behind the scenes as companies outsource them to powerful trade associations. For instance, in 2018 the automotive industry relied on the Alliance of Automobile Manufacturers to roll back US vehicle emissions standards.
Carbon Policy Footprint
Lobbying represents potentially the greatest impact a company has on climate change
Various criteria are used to measure the impact of individual companies on climate change. Scope 1 and 2 emissions, disclosed by companies since the late 1990s, are used to assess the direct greenhouse gases (GHG) emissions from sources owned or controlled by a company and also the indirect emissions resulting from generating purchased electricity.
Increasingly, Scope 3 emissions – that is, those indirect emissions that occur in a company’s value chain – are being assessed for the coal, oil and gas production sectors as well. However, these measurements fail to take the potential systemic impact of other corporate activities on climate into account.
Crucially, groups and companies which work to hold back key climate policies may have a far more negative impact on climate change than an assessment based solely on their Scope 1, 2 and 3 emissions would indicate. In contrast, those companies which lobby in support of climate policies may have a positive impact.
To address this gap in the analysis, in 2017 InfluenceMap introduced the concept of the Carbon Policy Footprint for corporations. These footprints are not measured in tons of GHGs, but instead compare the impact that a company or trade association is having on the development of climate policy.
InfluenceMap’s Assessment Method
Our Methodology is objective, relies on company-own disclosures and allows like-for-like comparisons
Our scoring methodology is applied to all companies and trade associations using the same formula. It relies on a consistent set of objective benchmarks.
- The definition of “policy influence” is derived from the 2013 UN Guide for Responsible Corporate Engagement in Climate Policy.
- All company or trade association positions are measured against a benchmark of “Paris-aligned” climate and energy policy put forward by relevant regulatory bodies, including the EC Directorate-General for Climate Action and national climate regulators.
- All company and trade association assessments are based on thorough analysis of their public disclosures, including legislation consultations, websites, financial filings and transcripts of CEO and senior management messaging.
- For each company, hundreds of pieces of evidence are assessed and scored. These are aggregated with an algorithm to compute metrics that indicate corporate behavior.
The resulting analysis, accompanied by a set of metrics, is objective, relies mostly on the company’s own statements and allows direct comparison of companies and trade associations. Full details can be found here.
The Corporate Climate Lobbying Landscape
A corporate battle has emerged over Paris-aligned climate policy
Following the establishment of the Paris Agreement in 2015, the proportion of the world’s largest industrial companies in InfluenceMap’s survey directly opposing climate policy has decreased from 45% to 30%. However, this promising trend is countered by ongoing opposition to binding climate policy from powerful trade groups and an uptick in opposition from the automotive and coal sectors over the last three years.
The current lobbying landscape sees the majority of industrial companies in sectors like retail and healthcare not strategically involved in climate policy. The fossil fuel value chain continues its opposition countered by an increasing number of tech, utility and consumer goods companies (e.g. Apple, Unilever) who want strong policy to support their climate goals.
- InfluenceMap’s A-List of Climate Policy Engagement identifies the growing number of powerful companies supporting ambitious climate policy in a strategic manner.
- The automotive sector has successfully watered down and compromised climate motivated vehicle rules since 2015 - lobbying of US standards is notable.
- Many utilities are now pushing hard for strong renewables policy to support their transition, particularly in Europe (Enel, Iberdrola). However, some (e.g. RWE, Japanese utilites) are still pushing hard for coal-based energy policy along with coal value chain players like Glencore.
Trade Associations Blocking
90% of the world’s largest industrial companies retain links
to trade groups opposing climate policy
Globally, many powerful trade associations remain actively engaged in lobbying against climate policy and regulations, representing perhaps the most significant political blockage to climate action in-line with the goals of the Paris Agreement. Since 2015, there has been limited effort by corporates to address their indirect impact on climate through these third-party organizations.
Cross-sector trade groups including the US Chamber of Commerce, BusinessEurope and Japan's Keidanren are among the most influential negative lobbyists on climate policy, despite purporting to represent a diverse set of companies and business models. Reflecting the corporate capture of the climate policy process in general, this is explained by a highly vocal but minority group of companies within these trade groups capturing its policy positions. As a result, these trade associations' activities are increasingly at odds with the climate strategies and values of the majority of their members.
The issue of corporate misalignment with their key trade groups on climate is now firmly in shareholders’ cross-hairs. Powerful investor action at mining giants BHP and Rio Tinto in 2017-18 and inclusion of climate lobbying in the agenda of the Climate Action 100+ (backed by $28 trillion in assets) attests to this growing trend.
Lobbying by the Oil Majors
This sector presents a particularly strong force against ambitious climate policy
The fossil fuel production sector, particularly the oil and gas majors, continue to represent a highly influential and negative influence on Paris-aligned climate policy, globally.
As they are increasingly under pressure on climate, many (e.g. Shell, Eni, Total) have introduced PR campaigns to stress their support for top line (and non-binding) measures like the Paris Agreement and a carbon price.
However, they retain leadership positions in powerful trade associations that oppose policy streams around the world, which will reduce demand for their products (e.g. vehicle standards, electric vehicle policy, ambitious carbon taxes and strong renewable policy). In doing so, the sector is increasingly fighting progressive companies who would benefit from these same policies (e.g. utilities, RE100 signatories).
A central pillar of the oil and gas industry’s lobbying strategy is trying to position gas a permanent part of the future energy mix and as part of the solution to climate change. This position is often accompanied by opposition to robust renewable and clean energy regulation.
InfluenceMap continues to assess and report on the disconnect between the oil/gas lobbying on climate change and their increasingly positive top-line PR statements. (e.g. Big oil and the obstruction of climate regulations, October 2015)
We use our knowledge base on climate and energy policy engagement to generate sector, country and policy-specific deep-dive reports
- InfluenceMap's Corporate Capture of the IMO releases from 2017 and 2018 exposed disproportionate influence by shipping interests in the UN body's climate process and enabled 12 countries including Australia to demand reform, citing InfluenceMap’s work.
- InfluenceMap's widely cited research into how much big oil is really spending on climate lobbying was presented by Senator Sheldon Whitehouse to the US Senate floor in 2016.
- InfluenceMap's September 2017 Carbon Policy Footprint report reformulated how corporate impact on climate change should be understood and was covered extensively by the global mainstream business press.
- InfluenceMap's April 2018 'A-List of Climate Policy Engagement', covered extensively in global sustainability press, identifies the powerful companies most strategically supportive of climate policy
- InfluenceMap's April 2018 report on US auto lobbying tracked a two-year plan to successfully undermine US GHG emission and CAFE standards and generated increased scrutiny on companies including Ford, GM and Toyota.
How InfluenceMap’s Content is Used
Our analysis and metrics are used by over 200 investors
globally and feed into the Climate Action 100+ process
How InfluenceMap’s Content is Used
Many progressive companies engaged in positive lobbying
use our work
InfluenceMap in the Media
Our work has been cited in over 1,000 media pieces in
25 countries since 2015