Hiding in the Crowd: Climate Lobbying under Consumer and Investor Scrutiny

• In Event: Transparency in Climate Politics: Evidence from China, Europe, and the US

Abstract

Across the globe, investors and consumers are becoming increasingly concerned about climate
change. With this concern comes a heightened interest in the climate conduct of large firms, including their lobbying activities. At the same time, governments are pushing for more regulation to reduce greenhouse gas emissions, and affected companies have a clear incentive to lobby on such policies. In this paper, I ask how companies adjust their lobbying strategies to avoid backlash from climate-conscious consumers and investors. I argue that companies change the observability of their lobbying by adjusting whether they take a position individually or let an industry association lobby on their behalf. Less climate-friendly firms, I argue, shift their lobbying into industry associations, which makes it less attributable. In contrast, more climate-friendly firms become more likely to lobby by themselves. To test this, I draw on lobbying data from the European Emissions Trading System and utilize an extensive new dataset of companies’ association membership. Drawing on responses to policy consultations, I first show that association lobbying tends to be less climate-friendly than individual firms’ lobbying positions. I then leverage cross-company variation in exposure to consumer and investor pressure to show that companies respond to potential pressure by strategically selecting whether to lobby alone. In addition, I examine the conditions under which associations decide to take a lobbying position. Associations are highly active and powerful lobbyists, yet how they interact with member companies is poorly understood. This paper provides one step toward closing that gap.

Author

• Christina Luise Toenshoff, Leiden University