Guide helps companies to align corporate sustainability initiatives and their influence on climate policy

While on secondment to influential environmental charity CDP, Ben Fagan-Watson from Policy Studies Institute has contributed to a major international study that aims to help multinational corporations report on their influence on climate change policy, and to align their corporate sustainability initiatives with their government relations, public affairs and policy work.

CDP works with market forces to motivate companies to disclose their impacts on the environment and natural resources and take action to reduce them, and now requests information from over 11,000 companies in 81 countries. As a result, CDP now holds the largest collection of primary climate change, water and forest risk commodities information globally. CDP regularly releases reports based on quantitative and qualitative analysis of this dataset, including analysis of the largest 500 companies globally, the S&P500, the FTSE350, as well as reports on companies that are particularly exposed to water or forest risks. Ben Fagan-Watson was Head of Government Relations at CDP for 12 months while on secondment.

The Guide was written by eight leading international organisations: three UN agencies, CDP, WWF, investor group Ceres, the World Resources Institute and the Climate Group. These guidelines will help companies engage in climate policy in a transparent and accountable way that is consistent with their sustainability commitments.

The Guide to Responsible Corporate Engagement in Climate Policy sets baseline expectations for companies to provide proactive, constructive input for governments to create effective climate policies. It helps companies to connect the dots between sustainability commitments, such as emissions reductions across their value chains and efficiency improvements, with their corporate policy positions.

There is a mixed record on public-policy engagement. In a recent survey of UN Global Compact companies, only 30 per cent have aligned their traditional government affairs activities with their corporate responsibility commitments, such as taking action on climate change.

The report comes as the role of business in policymaking has received increased attention at the UN Climate Change Conference (COP19) in Warsaw, Poland. Businesses and investors are also becoming more aware of the risks of climate change, and want clear and consistent climate policies in place to create a productive operating environment. The guide supports for progressive businesses lobbying in favour of a global, legal climate agreement by 2015, in order to support policymakers in bringing together a bold global deal.

To address calls for alignment by business, investors and other stakeholders, the guide establishes the core elements of responsible corporate engagement and translates that into three practical actions for companies to provide a constructive and positive voice on climate policy: 

  • Identify the company’s opportunity and legitimacy by creating an inventory of its influences on climate policy;
  • Align its positions and influences to ensure consistency and accountability; and
  • Report on climate change policy influences, intentions and outcomes using a three-tiered framework for transparency.

‘Engagement by the private sector that is collaborative, serious and solutions-oriented is vital, and can help ensure widespread support for sustainability, climate action and broader UN goals. With leading technological and social innovations already in place, there is enormous potential to produce results if greater scale is achieved’, said UN Global Compact Executive Director Georg Kell. ‘The time is ripe for enlightened business leaders to scale up corporate sustainability by engaging responsibly on climate policy, ultimately helping to drive energy efficiency, renewables and technology in a low-carbon economy.’

The business case for companies to engage responsibly in climate policy has strengthened as companies are increasingly asked to track and report their policy positions. Responsible corporate engagement can help a company to execute on its corporate strategy; create trusted relationships with government and generate regulatory certainty; enhance shareholder value; build and sustain public and stakeholder trust; and promote policies that protect against impacts from climate change.

‘When it comes to climate policy, many leading businesses are struggling to match their words and their actions. This report finds that seven of 10 businesses have not fully aligned their sustainability goals with government affairs practices’, said Andrew Steer, President and CEO, World Resources Institute. ‘Those businesses that are serious about addressing climate change will follow the actions in this guide.’

The Guide to Responsible Corporate Engagement in Climate Policy is the result of research and interviews with more than 75 business and policy leaders from more than 60 organizations across 20 countries. It was launched at a special session of the inaugural Caring for Climate Business Forum during COP19, on 19 November in Warsaw.

Download the Guide to Responsible Corporate Engagement in Climate Policy.