Climate policy advocacy is incredibly powerful, but businesses must do more
Sophie Punte, Policy Director, We Mean Business Coalition
It is safe to say that climate ambition has become mainstream. More than 2,000 companies with a combined market capitalization of $38 trillion have committed to setting science-based targets with SBTi. That’s over one third of the global economy. But to build a business case for deep and long-term investments, drive scale and turn targets into concrete action, companies rely on governments to provide an enabling policy environment and level playing field.
At present, Nationally Determined Contributions (NDCs) and long-term targets set by governments are set to limit warming below 2.3°C according to Climate Action Tracker. To keep the world on track for 1.5°C and avoid the worst impacts of climate change, governments need to raise NDC ambition further, set underpinning regulations and make the necessary investments. Only with the acceptance of citizens and other stakeholder groups, including business, can governments deliver this. It is therefore essential that businesses engage in policy advocacy, showing that business backs ambitious climate policy and bringing their expertise on what it will take to put it into practice.
Time and again, we see how powerful the business voice can be, especially when companies band together. In 2020, a campaign coordinated through Coalition partner CLG Europe boosted the EU’s confidence on raising its climate ambition. Referencing this campaign, Ursula von der Leyen, President of the European Commission, said in her State of the Union Address: “Our economy and industry can manage this [ambitious climate target]. And they want it too. Just yesterday, 170 business leaders and investors – from SMEs to some of the world’s biggest companies – wrote to me calling on Europe to set a target of at least 55%.”
Similarly, in 2021, the We Mean Business Coalition mobilized 400 American businesses to sign a letter in support of President Biden’s 50% emission reduction target by 2030. Biden’s Climate Envoy John Kerry subsequently went on CNN to speak about how important business backing was, and the more ambitious target was duly announced.
We also ran policy campaigns for Japan’s climate target, the G7 Summit in Italy, and the EU’s ‘Fit for 55’ policy package as part of the EU Green Deal. These successes paved the way for greater ambition at the G20 Summit last October and COP26 the month after. Our open letter calling on G20 leaders, among others, to halve emissions by 2030 and end support for coal, was signed by 778 businesses, representing US$2.7 trillion in annual revenue, and employing 10 million people.
More than 1,000 businesses joined these policy advocacy campaigns via business sign-on letters, meetings between policy makers and businesses, letters to Ministers and Heads of State, and communication via mainstream and social media.
But we can do more. The number of companies that advocate for ambitious climate policy is the tip of the iceberg compared to the number that could. And companies are sometimes inconsistent, taking a pro-climate stance while in parallel undermining climate policies through trade associations with conservative views. Or, when the rubber hits the road, falling back into traditional opposition to ambitious policies, as we saw with the EU Emissions Trading Scheme and the US Inflation Reduction Act (IRA) recently. Without a strong pro-climate voice from business, such as 40 companies expressing support for the IRA through Ceres, the vocal few with most to lose from the transition to a net-zero economy will chip away at the climate policies the world needs.
To counter this, Ceres, the B Team and several other organizations have drafted guidelines and tools to help companies with ‘responsible policy engagement’ or RPE. These are incorporated into the We Mean Business Coalition’s new step-by-step guide to corporate climate action, The 4 A’s of Climate Leadership (advocacy is one of these As alongside ambition, action and accountability). Companies aiming to be strong and consistent in their advocacy:
- Make a public commitment to advocate for ambitious climate policy, and engage key stakeholders
- Publicly advocate for bold, science-based climate policies, and call out those that obstruct the 1.5°C pathway
- Align the climate policy advocacy of the company’s trade associations, alliances and coalitions with the goal of net zero by 2050
- Allocate advocacy spending to advance climate policies, not obstruct them
- Disclose in accordance with the three disclosure asks of the Global Standard on Responsible Corporate Climate Lobbying.
The opportunity now is to take this global by developing a harmonized RPE Framework. It’s something we will be exploring with partners over coming months, with the aim of ensuring that companies that have set science-based targets are truly advocating for ambitious climate policies to halve emissions by 2030 and reach net zero before 2050.
We know that the progressive business voice will be essential to secure effective policy that can deliver the scale of change needed. We know that policy makers want to hear it. The challenge now is to ensure more businesses are speaking up, to powerfully and unequivocally call for the climate action they and the world need not only to survive, but to thrive.