New Study: Silent Influence

Are companies failing to govern their climate lobbying?

Danu Insight unveils Silent Influence, the most extensive data-driven study to date on how over 8,500 publicly listed companies worldwide disclose and govern their climate lobbying activities. This is accompanied by a new publicly available database.

Key Findings:

• 78 % of companies say nothing about either their direct climate lobbying or the lobbying done in their name or by their trade associations.

• 75 % show zero evidence of a governance process to keep that lobbying in check.

• Less than 4% of companies appear to have strong or comprehensive governance structures to manage climate lobbying risks and ensure adequate alignment of their direct and indirect influence.

• Good governance matters: firms with robust oversight are 6× more likely to be transparent about their lobbying than the average company.

• Sector disparities: Traditionally scrutinised companies in the Utility, Energy and Materials sectors lead on disclosure, whilst newly resource-intensive companies in the Tech sector trail far behind.

• Europe tops the regional table for both transparency and governance; Asia lags, suggesting a huge opportunity (and risk) for investors.

"Companies should be required to be transparent about their climate policy lobbying, just as they are their GHG emissions. This report's findings and the evident lack of transparency and governance should concern investors about being misled or the inadequate management of companies’ material lobbying risks. This is particularly important as most companies do not understand what they and their trade associations are lobbying for and against. We know that when they do audit their lobbying, they often take proactive and meaningful actions to align their lobbying with their publicly stated climate values."

- Thomas O'Neill, Director, Danu Insight.

Why lobbying governance matters?

Misaligned or hidden lobbying undermines net-zero policy, misleads investors, and creates reputational and regulatory risk. Good lobbying governance is one of the most effective steps to drive progress on this issue.

The report finds less than 4% of companies scored ‘strong’ or 'comprehensive' through aligning their lobbying efforts, which includes both direct lobbying and lobbying through trade associations, by establishing a clear policy and management process to monitor and ensure the alignment of its climate lobbying activities, while also designating specific individuals or groups, such as the CEO, head of ESG, or relevant working groups, to oversee these efforts.

This is needed as lobbyists often see their role as preventing legislation, particularly in the climate space, where new policy overwhelmingly imposes costs on industry. The lobbyists employed are usually highly knowledgeable about the legislation they seek to influence, but not necessarily about alternative, climate-aligned solutions. Conversely, companies undergoing transition need lobbyists who take a different stance and are willing to support climate-friendly legislation. Public affairs teams also operate across numerous jurisdictions globally. Without clear internal policies and management, irregular lobbying is likely. 

Similarly, aligning trade associations with company values is also essential for building coherent, effective climate policy globally. These well-funded and politically entrenched groups are unlikely to disappear. Auditing trade associations’ lobbying activities is vital for identifying which companies are funding which groups, and what positions those groups are taking. This allows companies to push for alignment between the trade associations they empower with the goals of the Paris Agreement.

Without these audits, companies remain in the dark about how their trade associations engage with climate policy. Further, they cannot navigate the already challenging task of assessing whether their lobbying is truly aligned with the Paris Agreement—and therefore, whether they can credibly claim to be a Paris- or Net Zero-aligned company.

Our report has shown that current lobbying disclosures and governance are widely inadequate, making this, in turn, a change opportunity for companies and investors.

Our proposition is that if thousands of companies effectively manage their climate governance, it will significantly support lobbying and policy outcomes that are aligned with the goals of the Paris Agreement.

What are the Sector and Continent Trends?

Data analysis reveals distinct patterns when companies are grouped by industry sector or continent. As illustrated in the graph below, average scores for both climate lobbying transparency and governance vary considerably across different sectors.

Companies operating in sectors generally understood to be highly exposed to climate-related policy and transition risks tend to demonstrate higher levels of disclosure.

Notably, the Utilities sector shows the highest average transparency score by a significant margin, followed by Energy and Materials. These sectors also lead, albeit with lower average scores overall, in climate lobbying governance. This suggests that companies facing more climate pressure (e.g. from regulators, transition challenges, or stakeholder scrutiny) are more likely to disclose their lobbying activities and implement governance structures.