Celebrating a decade of progress on corporate climate advocacy
María Mendiluce
This article was first published in Reuters.
Over the past decade, the business community has significantly evolved in its approach to climate action. Traditionally viewed as part of the problem, many companies have transformed into key players in the global effort to combat climate change. This shift has been driven by a growing recognition that sustainability is not only a moral imperative but also a strategic necessity for long-term business success.
In the United States, tech giants such as Google’s parent company Alphabet, Apple and Amazon have been instrumental in pushing for the adoption of renewable energy standards across various states. These companies have committed to sourcing 100% of their energy from renewable sources, setting a powerful example that has encouraged states to adopt more aggressive renewable portfolio standards. Their commitment has been crucial in accelerating the transition to clean energy within the U.S. and keeping up momentum even when the political context for progress has sometimes fallen away.
The European Green Deal, a comprehensive plan aimed at making Europe climate-neutral by 2050, has also seen substantial influence from major corporations. Companies such as IKEA, Unilever, Nestle and Danone have actively shaped the deal, particularly in areas related to circular economy practices, carbon neutrality and sustainable supply chains. Their involvement has helped ensure that the Green Deal is not only ambitious but also practical and aligned with the needs of businesses.
The United Kingdom’s net-zero legislation, which legally binds the country to achieving net-zero greenhouse gas emissions by 2050, was heavily influenced by businesses such as BT Group, HSBC and National Grid. These companies were part of a broader coalition that advocated for the adoption of this ambitious target, demonstrating the private sector’s critical role in shaping national climate policy.
In Brazil, businesses such as Natura & Co have been critical advocates for the National Policy on Climate Change. Their influence has been essential in ensuring that the policy focuses on reducing deforestation, promoting reforestation, and increasing the use of renewable energy. Additionally, companies in the biofuels industry, including Raizen and Cosan, have played a significant role in shaping the RenovaBio policy, which promotes the use of biofuels in transportation and contributes to Brazil’s commitments under the Paris Agreement.
Over the past year, more than 250 businesses have signed up to the Fossil to Clean campaign letter, urging governments to phase out fossil fuels. When the letter was first released last year, it was instrumental in getting language into the UAE Consensus at COP28, which signalled the beginning of the end of fossil fuels. This campaign, with the support of businesses, will continue to focus on advocating for the transition from fossil to clean to be integrated into the next round of country targets, with a call for action at New York Climate Week in September.
The past decade has proven that businesses can be powerful agents of change, capable of driving large-scale reductions in greenhouse gas emissions and promoting sustainability across industries. More companies than ever are committing to science-based targets and integrating climate risks into their core business strategies. They are seeing the benefits of advocating for climate policies, including reducing risk, emissions and costs, improving regulatory certainty, gaining a seat at the policymaking table, creating a level playing field for sectors and competitive advantage for economies.
Yet, for all the progress, there is a notable gap between corporate climate ambition and the actual practice of engaging in coherent policy advocacy. Despite half of the S&P 100 companies in the United States having science-based targets, only 19% publicly supported the Inflation Reduction Act, the largest climate investment in U.S. history.
The growing importance of corporate advocacy in shaping climate policy has led to increased scrutiny of companies’ climate goals against their political activities. This misalignment has drawn attention, with groups now holding companies accountable for their actions, demanding more responsible, consistent practices, and closely monitoring and rating corporate performance in climate advocacy. These external pressures, driven by investor demands, enhanced scrutiny and new standards, create a powerful incentive for companies to do better.
Companies have a range of tools at their disposal such as directly engaging with policymakers, mobilizing their networks, and leveraging corporate activities to influence climate policies. To accelerate climate action, companies must publicly commit to climate advocacy in line with their committed target, establishing governance processes for lobbying activities, and engaging colleagues across the organization. If businesses are serious about making change happen, they need to assess their trade associations and address misalignments, even if it means leaving associations that do not support climate goals aligned to 1.5 degrees Celsius.
The evolution of business climate action over the past decade shows that companies are engaging more effectively in developing and driving climate action. However, to meet the scale of the threat posed by climate change, businesses must make the bold decision to speak out, helping to shape the best policies for the broader business community that are necessary to the future of countries and economies.