Report highlights ‘profound’ lack of transparency in corporate climate lobbying

More than three quarters of listed companies share zero information about their direct or indirect climate lobbying activities and how these are governed, according to a new report by climate tech nonprofit Danu Insight.

The organisation leveraged web scraping and AI to collect information about climate lobbying from a variety of corporate sources, covering over 8,500 listed companies around the world. It found that most (78%) provide zero public disclosure about their direct or indirect (through business associations) climate policy lobbying, and 75% show no evidence of having any kind of climate lobbying governance process.

This lack of transparency and appropriate governance may help explain why so many companies’ advocacy efforts – particularly through the trade bodies they are members of – are misaligned with their climate goals.

Correlation between climate advocacy governance and transparency

Danu Insights also highlights the strong correlation between governance and transparency when it comes to climate advocacy. 

Less than 4% of listed companies appear to have strong or comprehensive governance structures in place to manage climate lobbying risks and ensure alignment with their climate targets – but these are over six times more likely to also have high transparency scores.

“This finding suggests that having robust governance processes in place may lead companies to be more transparent about their climate lobbying,” the nonprofit notes, adding that the reverse also holds true.

Read also: Unilever wants trade associations to take a more active climate advocacy stance

Insufficient details about lobbying positions

Overall, 830 companies (9.6%) disclose participating in climate lobbying, but without sufficient details about which policies they target or what outcomes they seek.

This means investors have almost no insight into the lobbying positions of companies in their portfolios.

“The widespread deficiencies in climate lobbying transparency and governance represent significant unmanaged risks for companies and investors, potentially undermining climate policy progress and exposing investors to reputational and regulatory risks,” the report warns.

Danu Insight recommends that investors use the findings of its report to engage with companies around climate advocacy and to integrate climate lobbying disclosure assessments into ESG fund criteria. In addition, the organisation suggests that governments standardise and regulate lobbying reporting framework to improve transparency.