Questions are rising about how companies should lobby on environmental issues, and the ways in which their lobbying is reported. In the US, for example, companies must disclose the subject of their lobbying, but do not have to disclose the position that they are lobbying for. This incomplete reporting opens them to concerns from consumers and investors.
In an age of increasing transparency, business leaders can expect more scrutiny, especially as concerns about the climate grow. While the politics and policies of climate change may be complicated, the message to a CEO is simple: there should be no question about where your company stands on climate policy.
Ikea Group has gotten the message, and is moving toward a transparent climate change policy. The company recently articulated its positions in this infographic. Thanks to internal leadership and partnerships with NGOs like WWF and the Climate Group, IKEA can now explain why climate change is relevant to its business interests and which policy actions it supports. Most importantly, it is taking these messages directly to policymakers throughout Europe, lobbying for ambitious, legally-binding 2030 targets for carbon dioxide emissions, renewable power and energy efficiency.
A Silent Majority
While some companies are stepping forward on climate change policy, many others have remained quiet. There are a variety of reasons for this silence. Some are wary of staking out a position on a politically-charged topic that might alienate customers. Others offer tepid public support, while privately lobbying against climate change policy. Many are simply struggling internally to understand business risks and opportunities, ensure consistent messaging, and find the capacity to engage in climate policy debates. However, regardless of the reason for their silence, some critics have argued that it prevents essential political breakthroughs on climate change.
So why (and how) are companies like Ikea stepping up to inform and advance climate policy? More importantly, what can other companies do to articulate their positions and demonstrate their leadership? My colleagues and I at the World Resources Institute worked with the United Nations and several esteemed partners on a Caring for Climate report to answer these questions and create a common standard for engaging responsibly in climate policy debates. This guide, which is informed by business leaders, policymakers, investors, and NGOs from nearly two dozen countries, represents a baseline for action and transparent reporting.
Shareholders and other stakeholders want to understand if and how companies support strong policy action to reduce greenhouse gas emissions and adapt to a changing climate. And, as Anne Kelly of Ceres has noted, silence does not equal neutrality: industry associations and other powerful interest groups can claim to be speaking for those companies who do not speak for themselves.
Increasing Attention and Interest
Investors are asking more questions. CDP, which is backed by more than 750 institutional investors representing more than $90tn in assets, is gathering information about corporate lobbying for the second year in a row. In 2014, it plans to extend its scope, scoring the quality of the disclosures that it receives. The group is currently exploring how to factor these responses into overall performance scores over time.
Meanwhile, outside groups are looking closer at what companies are saying and doing on climate policy. the Union of Concerned Scientists has been reviewing companies' and industry groups' actions and influences, and calling out inconsistencies between their public positions and those of their lobbyists.
Other organizations are exploring the possibility of updating past studies, like SustainAbility's Influencing Power. Another option that some are exploring is benchmarking companies to establish leaders and laggards.
Actions Speak Loudest
The bottom line for companies is that it pays to be proactive. Businesses that clarify their positions and are transparent about their influences can avoid any questions from investors, customers and NGOs. Further, supporting policies to reduce global greenhouse gas emissions now, instead of delaying for a few more years, would avoid some $5tn in additional costs, according to the International Energy Agency.
Being proactive means identifying where climate change creates long-term risks and opportunities. It means ensuring that a company's lobbyists, and its industry groups' lobbyists, are pulling in the same direction as the company's long-term interests. These actions help ensure consistent, transparent engagement. A company can:
Clarify its position: Companies like Microsoft have issued public statements to clarify that their membership in climate-change denying industry groups like Alec "is not an endorsement" of their views on climate or energy policies. At the very least, these statements ensure that obstructive industry groups cannot claim to speak for all members on climate change.
Join with others to make climate policy asks: Groups like Business for Innovative Climate and Energy Policy (Bicep) in the US or the Prince of Wales's Corporate Leaders Group in Europe help members develop positions, sign letters and meet directly with legislators. Broader partnership groups, like the UN's Caring for Climate initiative, also help companies connect with high-level officials and ministers to discuss climate policy priorities. These are opportunities to influence climate policy debates with a strong, collective, constructive corporate voice.
Recruit others in its industry to shape policies that accelerate markets for low-carbon goods and services: WRI's policy engagement guide, published with the UN and others, highlights how the lighting industry and the information and communications technology industry are advocating strong policies that promote energy efficiency and climate change adaptation.
Level the playing field: Companies can push for rules that ensure that all businesses are held to a standard of transparency when it comes to policy engagement.
In the months ahead, climate change will be on the agenda at all political levels—local, national and international. Scientists have outlined current impacts and future implications of climate change, as well as the ambition required to minimize the risk of the worst disruptions to communities around the world.
Individual companies can choose to let others delay actions and decisions for a global response. Alternately, they can take a leadership role, identifying and aligning their political influences, and helping to explain to customers, shareholders and stakeholders why and how they are helping advance ambitious, specific policies to address climate change.
Editor's Note: This article was originally published by The Guardian.