Why do green firms support anti-climate legislators?
New research reveals corporate hypocrisy on climate change. Guosong Xu argues that green firms make political action committee contributions to anti-climate change legislators to enhance the value of their firms.
As governments around the world ramp up efforts to redefine climate rules, big corporations are increasing their political engagements to wield influence over climate priorities. By the end of 2020, large companies included in the MSCI Index donated at least three times more money to political candidates in the U.S. than they did at the beginning of the 1990’s, according to our recent paper (Fich and Xu, 2022). However, due, in part, to the opaque disclosure of corporate political activities, little is known about who are making these donations (climate leaders or brown firms), and which candidates receive firms’ backing (environmental obstructionists or pro-climate politicians).
The prevailing view on corporate engagement in the environmental regulation process is that firms with worse environmental records will back politicians who obstruct pro-climate policies, and that environmentally proactive firms will benefit from these policies. The intuition is that pro-climate firms have an intrinsic interest in pursuing a green political agenda when they overtly adhere to a philosophy of “doing well by doing good” (Benabou and Tirole, 2010). In practice, however, climate leaders often bear the largest burden from their sustainability commitments (Fisher-Vanden and Thorburn, 2011). Moreover, climate campaigners often claim that many corporate climate policies are merely attempts to greenwash. For example, U.S. Senator Sheldon Whitehouse said that “despite the statements emitted from oil companies’ executive suites about taking climate change seriously and supporting a price on carbon, their lobbying presence in Congress is 100 per cent opposed to any action.” We investigate these claims by studying the implications of corporate climate engagement in the legislative process.
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Πηγή: blogs.lse.ac.uk
