By Rory Sullivan, Robert Black, Richard Perkins and Clare Richards

The issue of corporate lobbying activity by companies on climate change, and how responsibly it is carried out, is fast becoming a central issue for global investors. This commentary explores the actions investors can take to ensure that corporate lobbying does not undermine implementation of the Paris Agreement.

Setting the scene

Lobbying by companies on climate change refers to efforts by companies and their agents to directly or indirectly influence climate-significant policy decision-making by political or bureaucratic actors.

Not all corporate climate change-related lobbying is bad. Nor is such lobbying always in conflict with climate change goals. In fact, there are many examples of companies lobbying governments for regulations and policies that help the private sector to contribute to domestic and international climate change goals – one is the We Mean Business Coalition, another is the pro-regulatory lobbying by some businesses which contributed to the adoption of the EU’s Emissions Trading System. And investor networks such as the Institutional Investors Group on Climate Change (IIGCC) and the Principles for Responsible Investment (PRI) have also consistently pressed governments to take stronger action on climate change.

However, it is true that lobbying by companies, particularly those in high-carbon sectors, and their trade associations has often been a significant barrier to the ratcheting up of policy ambition and commitments needed to meet the goals of the Paris Agreement on climate change. A recent example is how the European natural gas industry sought to weaken key elements of the EU Green Deal in 2020–2021 through obscuring the relationship between gas and greenhouse gas emissions and through amplifying political concerns around security of energy supply, as revealed by analysis from InfluenceMap.

Delays in the adoption and implementation of climate change policy expose investment portfolios to weather-related risk. Delays also expose the companies in these portfolios to the risk of rapid and unpredictable changes in climate change and energy policy. Furthermore, lobbying against progressive climate change policy can damage the reputation of industry sectors and of industry associations, undermining their reputation for sustainability or corporate responsibility and, potentially, their social licence to operate.

Four areas where investor action would make an immediate, positive impact

1. Investors should adopt a holistic definition of climate lobbying

A clear definition would enable investors and other stakeholders to better hold lobbyists to account, signify well-defined actions for lobbying (e.g. joint interventions) and support governance frameworks for responsible lobbying.

The definition should be clear that responsible climate change lobbying:

  • Covers both (a) direct lobbying, where there is direct contact between the lobbying party and public policy decision-makers (examples include meetings with policymakers and engagement with them at conferences, participation in stakeholder consultations, the creation of pro- or anti-regulation alliances and coalitions); and (b) indirect lobbying, where the aim is to influence public policy by shaping and mobilising support from the public and other stakeholders (examples include corporate social responsibility (CSR)/sustainability reports that express climate commitments, the use of mass media and social media, the funding of think tanks and climate sceptic groups, the funding of policy and research studies).
  • Covers the entire policy life cycle.
  • Encompasses all policies that – directly or indirectly, explicitly or implicitly – deal with climate change mitigation and adaptation, loss and damage or disaster risk management.
  • Includes both the lobbying of domestic policymakers and the lobbying of international organisations such as the secretariat of the United Nations Framework Convention on Climate Change.
  • Covers the activities of the company itself and the activities of its trade associations, alliances and other coalitions.

2. Investors should encourage companies to adopt formal policies on responsible climate change lobbying

Corporate policies are important because they set the direction for a company’s lobbying efforts. Once adopted, such policies are generally translated into corporate objectives and targets, and companies develop management systems and processes to ensure that these policies are effectively implemented. Such policies may have both positive (i.e. creating an obligation on the company to act in a particular way) and negative (i.e. prohibiting particular actions) dimensions.

3. Investors should encourage companies to publish annual political impact statements

Any company that carries out direct or indirect climate change-related lobbying should report, at least annually, on its lobbying activity, including the activities of its agents, its trade associations and the alliances and coalitions of which it is a member. It should provide an assessment of how those activities have impacted the adoption and/or implementation of climate change policy and the extent to which these have helped meet the stated aims of the Paris Agreement. Where there is misalignment between lobbying activity and a company’s public position on climate change, the company should explain the discrepancy.

4. Investors should encourage companies to lobby in support of effective climate policies

Conceptions of responsible climate lobbying should move beyond the principle of not lobbying in a way that is contrary to the public interest. Under an expanded view of corporate political responsibility, companies with the requisite capabilities ought to actively consider whether they can and should lobby in support of the adoption and timely implementation of effective climate policies that meet the aims of the Paris Agreement. Companies should also consider lobbying to ensure climate concerns are integrated into non-environmental policies.

Companies are duty-bound to facilitate the Paris Agreement

In conclusion, the Paris Agreement has now been ratified, accepted or approved by almost 200 countries around the world. Companies based in these countries should, therefore, consider themselves to be bound by the Paris Agreement. They should also support effective implementation of the Agreement, and should ally with other concerned stakeholders to create supportive coalitions for effective climate action.

This commentary is based on the policy brief ‘Company lobbying and climate change: good governance for Paris-aligned outcomes’, published by the Grantham Research Institute.

Dr Rory Sullivan is CEO at Chronos Sustainability and Visiting Professor in Practice at the Grantham Research Institute. Robert Black is Manager, Responsible Investment at Chronos Sustainability. Dr Richard Perkins is Associate Professor in the Department of Geography and Environment at LSE and an Associate of the Grantham Research Institute. Clare Richards is Senior Engagement Manager at the Church of England Pensions Board.

The authors would like to thank the Church of England Pensions Board, AP7 and BNP Paribas Asset Management for supporting this work, to develop a means of assessing and governing corporate climate lobbying. To access the resulting Global Standard on Responsible Climate Lobbying, visit

The views in this commentary are those of the authors and do not necessarily represent those of the Grantham Research Institute.

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