European companies’ muddled message on climate

Welcome back. Can a company be considered “responsible” if it says all the right things in public — but still lends its weight to lobby groups that are pushing policymakers in a very different direction? With corporate lobbyists in Brussels working hard to shape the next phase of EU green policy, this seems like a good moment to consider that question . . . 

CORPORATE LOBBYING

Who’s speaking for Europe’s companies?

The EU’s leaders have been at pains to stress their keen attention to the voice of business, as they develop the next stage of their green growth strategy. Perceived opposition from industry is driving a rethink on various planks of the European Green Deal. But which voices are they hearing — and do they actually represent the priorities of European companies?

New research from the think-tank InfluenceMap has raised some interesting questions on this front. It found that big European businesses have become significantly more supportive of green policies in the public positions they’ve taken — but their industry lobby groups have proved much less so.

In 2019, it found only 3 per cent of nearly 200 companies studied were fully supportive of “science-aligned policy” in their climate advocacy, while 34 per cent were deemed completely “misaligned”. Today, 23 per cent are fully aligned (and a further 29 per cent “partially aligned”), while the misaligned portion is down to 13 per cent.

Definitions of what constitutes “alignment” are of course open to debate (details of InfluenceMap’s methodology are here). But the significant change in these scores is notable. Still more so is the divergence between the policy positions of individual companies, and of the industry associations that represent them.

Among the associations studied by InfluenceMap, the share of those deemed fully supportive of science-based policy rose much more modestly, from 2 per cent in 2019 to 12 per cent today.

Bodies such as the We Mean Business Coalition have been warning for several years about the “lowest common denominator” effect in industry associations that advocate only policies that can be supported by the least ambitious of their members.

That effect is apparent in the InfluenceMap data, which assigned grades from A to E for all the companies and associations studied. Six of the eight automotive companies studied scored between B- and C-; the four cement companies covered all scored between B and C-. But both industry associations — the European Automobile Manufacturers’ Association and the European Cement Association — got a lowly D+.

There are various possible explanations for what is going on here. One is that, when association members thrash out their common position, companies strongly opposed to green policies have been able to overwhelm the lukewarm support of their more progressive peers. Another more cynical theory is that companies have been happy to let their industry bodies push back on green rules — while taking more supportive public stances in their own corporate position, to protect their image and avoid alienating EU authorities.

There were a few higher scorers among the business associations. Perhaps unsurprisingly, renewable energy lobby groups all scored highly. The highest scorer, with a grade of A-, went to the Corporate Leaders Group — a relatively small initiative with 17 members in Europe, including energy businesses Iberdrola and EDF, and the European businesses of US tech giants Amazon, Google and Microsoft.

A point worth remembering here is that much corporate lobbying still happens without full transparency. The InfluenceMap scoring is based only on publicly available information — and may therefore have given flattering scores to companies that have quietly pushed against climate policies while taking more positive stances in public.

As recent work by HEC Paris professor Alberto Alemanno has highlighted, investors still face a serious shortage of information to assess how far companies’ lobbying activities align with their sustainability claims. Pressure from money managers could yet lead to improved transparency in this area, and push companies to think more carefully about the positions taken by their industry associations.

Some businesses are already talking publicly about this issue — notably Unilever, which gets a B grade from InfluenceMap but is part of some trade groups that score much worse.

Last month, Unilever said eight of its 26 industry associations had examples of “misalignment” with its own climate policies, down from 14 of 27 the previous year. “We believe that most of the industry bodies we work with could be doing more,” Unilever said. If they don’t, companies will need to consider whether membership is worth the reputational risk.

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