Lobbying and climate goals: Corporate alignment with the Paris Agreement

Climate finance and carbon markets were emphasized as vital areas at the 2024 UN Climate Conference (COP29), highlighting the urgent need to increase financial support for climate initiatives. Current commitments fall short of meeting the Paris Agreement on climate change goal of limiting global warming to 1.5 degrees C. The private sector’s involvement is essential; governments alone cannot address this challenge. Many businesses have pledged to achieve net-zero and carbon neutrality, but success requires strategic lobbying and advocacy beyond internal policies. Companies must ensure transparency in their lobbying efforts and align their advocacy with climate objectives. By coordinating these efforts with Paris climate accord goals, businesses can enhance their reputations and demonstrate consistent commitment to climate action.

Within our ESG Scores and data, underpinned by the S&P Global Corporate Sustainability Assessment (CSA), we assess how effectively companies oversee, review and disclose their processes to align their lobbying and trade association activities with Paris Agreement objectives.

The CSA is an annual evaluation of sustainability practices covering about 14,000 companies worldwide. In this review, we analyze 12,813 public companies’ disclosures on their climate alignment lobbying efforts in 2024 across 62 industries.

Figure 1 indicates that 18% of companies have implemented programs to align their lobbying activities with the Paris Agreement. The utilities and materials sectors reported the highest levels of disclosure, at 30% and 27%, respectively, largely due to strict regulations requiring their alignment with the agreement. In contrast, only 6% of companies in the healthcare sector have established such frameworks. A significant 82% of companies have not aligned their lobbying and trade association activities with the Paris Agreement, which could undermine their reputations and cast doubt on their genuine commitments to climate initiatives.

Figure 2 shows the initiatives that companies use to oversee, review and disclose their climate-related lobbying activities and trade association memberships to ensure alignment with the Paris Agreement. Only 14% of companies have implemented reporting mechanisms for their direct climate-related lobbying efforts and the climate policy positions of their trade associations. Furthermore, only 11% have created processes to review and monitor public policy engagements and lobbying activities to ensure consistency with the climate accord. Finally, a mere 2% of companies have a clear framework to address misalignments between the climate change policy positions of trade associations and their own corporate climate stances.

While some companies provide public reports detailing their processes for monitoring, assessing and disclosing climate-related lobbying activities and trade association memberships to ensure alignment with the Paris Agreement, a noticeable gap exists. The level of advancement in reporting varies significantly, as processes are not uniformly developed across sectors.

Companies must uphold their commitments amid rising anti-climate policy pressures. They should improve internal policies, ensure transparent reporting, and engage in strategic lobbying to support public advocacy and align with the Paris Agreement. Active participation in public campaigns and partnerships demonstrates their commitment to climate action. Companies also need clear communication strategies to manage backlash against climate initiatives.

By refining their strategies, businesses can reinforce their climate commitments, influence public policy and maintain credibility. Reporting on governance frameworks for public policy engagement and addressing misalignments with trade associations’ climate policies are essential. Implementing transparent lobbying procedures and collaborating with climate-focused associations can enhance sustainability efforts and contribute to global climate initiatives. Transparency is vital for maintaining credibility and driving impactful changes for a sustainable future.