The latest insights from the We Mean Business coalition

A snapshot of corporate advocacy and investments under the CSRD

More EU firms than ever before are actively taking up advocating for climate policies – according to promising new data from InfluenceMap. But still many more have the opportunity to make Responsible Policy Engagement (RPE) a core part of their strategy to address climate risks – and to disclose their activities in order to meet growing investor and regulatory requirements.

Against this backdrop, the first companies are beginning to report under the EU’s Corporate Sustainability Reporting Directive (CSRD), which is part of a broader push to improve corporate disclosure to enable the delivery of the EU’s Green Deal. Given it is the inaugural year of CSRD reporting, we wanted to capture a snapshot of how early adopter companies have been interpreting the CSRD guidance around political influence and lobbying.

In this piece, we provide a high-level view of the type of information the CSRD suggests companies disclose as it relates to this topic, a summary of our key findings, examples of best practice and areas for further refinement. We start and end by making the case for why more companies should seize the opportunity of practicing – and confidently talking about – responsible policy engagement.

Why practice – and disclose – corporate advocacy?

Thousands of companies have set science-based climate targets backed up by transition plans to both reduce climate-related risks and create new business opportunities. But to turn these goals into reality business needs the right policies and incentives in place. By leveraging their influence – both direct and indirect – companies can provide policymakers with real economy inputs and feedback that will ensure that the policy and regulatory frameworks governments put forward support corporate investment, growth and resilience.

This is the premise of our approach to RPE, through which We Mean Business Coalition and our partners support companies with tools and practical resources to enable them to advocate for supporting climate policies.

A critical step for companies who practice RPE is reporting. Without disclosure, it is difficult for investors and other stakeholders to grasp how companies are delivering their transition plans. To support companies in creating a dedicated corporate policy engagement and trade group misalignment reports, we released a new template earlier this year.

Reporting has moved further up the corporate agenda in the last few years, especially as the reporting deadlines have grown closer for the EU’s CSRD.

What does the CSRD ask of companies?

In the Governance section of the CSRD, there is a specific request for companies, when relevant, to disclose their “political influence and lobbying” activities (ESRS Governance 1-5 or G1.5). Throughout this piece we will use these two terms as well as political engagement and corporate advocacy interchangeably.

The ESRS Governance guidelines indicates companies should articulate the rationale behind their political engagements, which topics they are engaged on and the money spent to influence those outcomes, both directly and indirectly through trade groups, thinktanks and other lobbying bodies.

If a company deems political influence and lobbying as material to their business operations as part of the Double Materiality Assessment, they are encouraged to follow the G1.5 disclosure guidance and supporting points found in the guidance’s Appendix.

While the agreed interpretations and best practice for the ESRS will be iterative after more years of reporting, there are five main topics that companies are encouraged to report on:

1. Oversight responsibility: Representative(s) in your administrative, management and supervisory bodies responsible for overseeing political influence and lobbying activities.
2. Political contributions (direct, indirect or in-kind): Total amount spent both directly and indirectly, broken down by country/geography and by type of recipient (e.g., political party, lobbying association, trade group, etc.). And non-monetary (in-kind) contributions, including an explanation of how the value is calculated.
3. Lobbying activities and positions: Main topics covered by lobbying efforts, the organization’s key positions on these topics, and how these activities connect to material impacts, risks and opportunities identified in the materiality assessment.
4. Transparency registration: Whether the organization is registered in the EU Transparency Register or equivalent member state register, including the name and identification number.
5. Public administration connections: Whether any board or management members have held positions in public administration, including regulatory bodies, within 2 years prior to their appointment during the current reporting period.

However, there are some nuances around whether companies disclose on G1.5 as with other sections of the CSRD. Firstly, CSRD is being phased in, but for now only mandated for larger companies listed in the EU and who meet certain thresholds. The intention is that it will expand beyond the larger, listed companies in the years to come (pending EU final decisions relating to the Omnibus package).

Additionally, just because a company has deemed the topic material, it doesn’t necessarily mean that they are required to disclose investments in this area. Specifically, advocacy investment amounts will be reviewed against financial materiality thresholds, and if they do not meet the company’s thresholds, they can opt out of disclosure.

Please note that next month, our Coalition colleague Dr. Jane Thostrup Jagd will publish a much more comprehensive analysis of early CSRD reporting trends, looking specifically at the 100 largest listed EU companies, including some other interesting advocacy examples not covered here.

Key findings from early adopters’ CSRD reporting

We reviewed a selection of 21 CSRD-aligned reports* from companies across EU member states and industries for the 2024 fiscal year. We were pleased to see that the majority (62%) mentioned political influence and lobbying in some form. However, approaches and the level of detail varied widely.

We were particularly interested in whether companies shared corporate advocacy objectives and related expenditures – as a true marker of climate leadership is when a company’s advocacy expenditure aligns with the policies they support.

The 13 companies that did report against G1.5 fell into one of the following buckets: 

• Followed the guidance to the letter: The majority of companies followed the ESRS Governance guidelines very closely, addressing each of the 5 areas mentioned above (i.e., oversight responsibility, political contributions, lobbying activities and positions, transparency registration, public administration connections).

• High level detail but shared much more information elsewhere: Some addressed their corporate advocacy commitment in their CSRD, but didn’t share as much robust information as they do in their separate Climate Policy Engagement reports.

• Kept details to a minimum: Several companies acknowledged some advocacy activity but indicated that they invested nothing towards engagement or didn’t mention an investment figure at all.

The remaining 8 companies (38%) deemed the topic immaterial and/or did not mention political influence or lobbying in their reports. 

Overall, it’s encouraging to see so many companies engaging with advocacy within their disclosure, especially given it is so new. We hope that this analysis can help strengthen corporate reporting on political engagement with time.

A definitional challenge

For the companies that chose to keep the details on political influence and lobbying to a minimum, this decision was likely driven by a narrow definition of this term – especially as it relates to investments in this area. That is, in thinking that investments that are political in nature strictly pertain only to giving money to a politician or political party.

Interestingly, the sections that directly precede G1.5 are G1.3 and G1.4, which raise questions about “prevention and detection of corruption and bribery” and “incidents of corruption or bribery,” respectively. The placement of G1.5 directly following corruption and bribery may be casting a negative shadow in terms of how corporates chose to interpret the G1.5 guidance. Indeed, based on how some companies framed the topic, political influence was often interpreted as a liability (i.e., financing a particular political part, which is seen as potentially corrupt or an example of bribery), as opposed to a material activity to assist in the delivery of business objectives.

This perspective overlooks the fact that businesses can meaningfully shape forward-looking policies through a variety of tactics. Companies can engage in a wide range of political influence activities – direct advocacy, active trade association involvement, thought leadership – that support commercial objectives while also positively shaping the policy landscape, without violating their Code of Conduct.

Best practices in action 

• Corporate advocacy as a material, positive impact: Companies like Ørsted and Unilever explicitly frame advocacy as a positive force. Ørsted identifies lobbying as a material positive impact that enables them to “contribute to the development of policies and legislation relating to the build-out of renewable energy.” Similarly, Unilever has stated that it “is actively lobbying governments, regulators and other third parties to influence policies and regulations that will help to drive change in four key areas: climate, nature, plastics and livelihoods.”

• Sophisticated governance systems: Leading companies have established robust oversight structures. Vestas exemplifies this with a Public Affairs department that provides quarterly board reporting, ensuring Executive Management and Board oversight through a formal management system that aligns policy engagement with the Paris Agreement across all jurisdictions. Similarly, EDP Renováveis has established clear governance through its Stakeholder Management team, which coordinates Interest Representation governance, management and impacts.

• Trade association accountability: Iberdrola stands out for its systematic approach to trade association alignment, providing crucial transparency about its indirect influence. The company conducts annual assessments of all associations based on their alignment against their sustainable development, human rights and climate goals, which is detailed within its CSRD. Its latest analysis found that 72% of organizations they participate in are aligned with their sustainability positions, with 28% classified as neutral.

• Granular investment details: Ørsted sets the standard for offering an incredibly detailed investment disclosure, breaking down its €6.16 million (46 million DKK) advocacy spend by region and category – differentiating between lobbying firms, trade associations, NGOs and think tanks. This provides stakeholders with clear visibility into how investments in political influencing and lobbying is deployed across different channels. Additionally, while most companies prohibit direct political contributions, Iberdrola is unique in disclosing actual political contributions, providing detailed breakdowns by country (€905,828 total), explaining the non-partisan nature of these contributions.

• Two way transparency: Endesa stood out for including government subsidies as part of its disclosure. Unlike most companies that focus solely on outgoing political contributions, Endesa provides stakeholders with the full picture of its government relationships by reporting on financial support received. This more holistic view of the company’s engagement with public entities represents a distinctive level of transparency.

Opportunities for refinement

• Consistency on costs: There are notable differences in how companies define and account for lobbying expenditures. While some companies made detailed reference to their lobbying agenda, they subsequently reported €0 or no investments, even when the CEO or other senior leaders are listed as the key lobby representative. Investments in dedicating Executive or Board time toward these activities could reasonably be included as part of the related costs. Additional guidance on accounting for lobbying costs, especially as it relates to more individualized or informal moments of direct advocacy, will be critical to making sense of the various investments that companies are putting towards influencing policy outcomes.

• Transparency among highly regulated players: Several companies that shared that they invest nothing in political engagement operate within highly regulated industries where proactive government relations to help navigate rules and ensure compliance is a core part of standard business practices. We hope to see more action and transparency among highly regulated industries as it relates to climate policy in future reporting, especially among those have set a target with the Science-Based Target initiative.

• More integrated reporting: Some companies are already going above and beyond by producing standalone corporate advocacy/policy engagement reports that offer a robust view of their advocacy activities. These commendable, comprehensive standalone reports represent a significant commitment of resources and provide exceptionally valuable transparency about political activities. As CSRD reporting matures, organizations have an opportunity to better integrate these more robust corporate advocacy disclosures across reporting outputs, offering stakeholders a more complete and consistent picture of their policy engagement.

The case for corporate advocacy

CSRD gives companies a valuable platform to articulate the thinking behind their political engagements and demonstrate alignment with their climate commitments. When done right, advocacy becomes a powerful differentiator, helping companies create a policy environment that accelerates climate action – making it more easily achievable and cost-effective.

Forward-thinking businesses are already demonstrating that advocacy isn’t just about compliance – it’s about creating value. By leveraging their influence for good, companies can support the building of regulatory frameworks needed to achieve the Paris Agreement while gaining efficiencies in their own business and becoming more resilient to climate risks.

Corporate advocacy is essential for creating the policy environment needed to address a changing climate and reduce the impact of climate risks. The most successful companies will be those that embrace this responsibility and turn their influence into impact.

For those looking to up their game, and even for those just getting started, we encourage you to learn more about Responsible Policy Engagement and leverage the resources found within our Framework.

*We reviewed 21 CSRD-aligned sustainability reports from fiscal year 2024 across a range of sectors and EU regions, using the Sustainability Reporting Navigator  (created by Ludwig Maximilian University of Munich) and additional research. Special thanks to Victor Wagner, Research Assistant and Doctoral student at LMU, for his support in helping us navigate the Sustainability Reporting Navigator data. 

The reports CSRD-aligned for the 2024 fiscal year were from the following companies: Airbus, CocaCola Europacific Partners**, Demant, DSV, EDP Renováveis**, Endesa, Iberdrola**, Lundbeck, Netcompany, Novo Nordisk, Nykredit Group, Ørsted, Pandora, Ringkjøbing Landbobank, Rockwool, Royal Schiphol Group, Spar Nord Bank, SSAB, Tryg, Unilever and Vestas.  

**We Mean Business Coalition partners with various companies both directly and through our partner organizations and associated grants. The three companies marked with a double asterisk (**) have acknowledged their work with WMBC and our coalition partners in their reports.