Corporate climate lobbying has rightfully received a lot of attention from investors and civil society. Yet corporate lobbying on the ‘S’ in ESG is equally very much a live issue. And it can lead to severe human rights impacts.
- Just three months before the train derailment which led to the release and fire of toxic chemicals with adverse environmental and health impacts, the US railway company Norfolk Southern urged lawmakers not to strengthen legislation that would have allowed better responses to derailments and other emergencies. The company has lobbied against stronger safety rules for years, fending off concerns from employees and shareholders alike.
- Yet corporate lobbying isn’t inherently negative – in fact, it can lead to positive human rights impacts. Looking at Japan, the Japan Business Federation Keidanren encourages its 1,500 members to increase wages, thus supporting the government’s efforts to what might lead to the largest wage increases in 26 years.
At EIRIS Foundation, we are working to build up a public platform to share analysis on companies’ and trade associations’ lobbying efforts on human rights. Laudes Foundation enabled us to undertake an initial test run and scoping exercise. We spoke to nearly 40 stakeholders from civil society and the investment community who confirmed the need for such data and provided valuable feedback. We are keen to hear from additional stakeholders interested in the topic.
We also worked closely with InfluenceMap to assess whether their tried and tested methodology and approach of assessing climate lobbying can be replicated in the ‘S’ field. Can it? The short answer is: yes. We focused on six companies and six trade associations from different sectors and geographies. We assessed to what extent consultation responses and other documents supported or opposed legislative proposals focused on human rights due diligence and ILO core labour standards. What did we find? As in the climate space, trade associations engaged policy makers more often and more in depth than companies, warranting a focus on such groups.
- The good: One trade association proactively advocated for the integration of a gender lens approach in a legislation. Another non-European association proposed expanding EU legislation to include non-EU companies (i.e., including its members).
- The bad: Trade associations lobbied more strongly against human rights legislation than companies. Companies and associations typically didn’t oppose legislation entirely but opposed critical aspects. Some advocated to limit the supply chain scope or remedy for victims.
- The ugly: The poorest scorers were US companies and trade associations. Stakeholder engagement was a particular sticking point, with a number of entities opposing any such mandatory efforts. This comes as a blow at a time when the Corporate Human Rights Benchmark shows that voluntary measures failed, with less than 5% of companies including rightsholder engagement in their human rights due diligence processes.
What next? Having been granted further funding from Laudes Foundation for 3 years, we are keen to hear from any stakeholders interested in the initiative. In the upcoming months we plan to work on refining the research methodology in consultation with diverse groups of stakeholders. Starting from early 2024 we intend to assess companies and trade associations in the apparel, finance, renewable and mining sectors on their lobbying efforts on legislation on human rights due diligence and the ILO core labour standards.
Want a learn more about lobbying an. d human rights?
- UN Working Group on business and human rights and (2022), “Corporate influence in the political and regulatory sphere: ensuring business practice in line with the Guiding Principles on Business and Human Rights”
- Corporate Europe Observatory, ECCJ and Friends of the Earth Europe (2021), “Off the hook? How business lobbies against liability for human rights and environmental abuses”
- Business & Human Rights Resource Centre, “Mandatory Due Diligence” and “Companies & Investors in Support of mHREDD [mandatory human rights and environmental due diligence]”
Interested in resources for investors?
- The Good Lobby Tracker will track disclosure standards on corporate political engagement of ESG rating providers
- PRI (2022), “The investor case for responsible political engagement”
- OECD, PRI (2022), “Regulating Corporate Political Engagement: Trends, Challenges and the Role for Investors”