Publication Benchmarking for change: corporate political expenditure and climate lobbying in Australia

ACCR investigates how major public companies in Australia disclose and govern their political expenditures and climate lobbying.

1. Executive Summary

1.1 Introduction

Businesses have an influential role in shaping Australian politics. Transparency and accountability for corporate political spending and lobbying are therefore essential to the healthy functioning of Australia’s democratic political system, and “fair, efficient and informed markets.”[1] The UN Principles for Responsible Investment (PRI) initiative, the Australian Council of Superannuation Investors (ACSI), the Investor Group on Climate Change (IGCC) and other groups concerned with responsible investment have all noted that stewardship to promote good governance of corporate political engagement is part of responsible investment practice. The important role of policy in Australia’s energy transition makes this all the more apparent.

Poor governance of corporate political engagement is also increasingly becoming a material risk to investors. This is especially the case when it comes to climate change and sustainability, as Australian regulators increase their scrutiny of ‘greenwashing’. Insufficient governance of political spending and climate lobbying activities can result in gaps between companies’ policies or positions on climate change and the action they take.

Yet, investors and other important stakeholders have limited insight into the political spending and climate lobbying activities of Australian companies. Australian disclosure requirements for political spending are less stringent than in the US and the UK.[2]

Change is afoot, however, with political support growing for greater disclosure of electoral and other political expenditures, and regulators prioritising enforcement on ‘greenwashing’ as more companies commit to aligning with the Paris Agreement and set net zero targets. Australian investor interest in companies’ climate claims and impact has also grown rapidly (albeit off a low base) in recent years, with shareholder resolutions relating to climate change growing particularly quickly.[3]

In this study, ACCR investigates how major public companies in Australia disclose and govern their political expenditures and climate lobbying. We analysed how well 50 leading ASX companies govern their political spending by using the CPA-Zicklin Index, the leading measure of transparency and accountability for corporate political expenditure. We then compared Australian companies' performance against the Index with the performance of leading US companies. We also assessed BHP, Origin, Rio Tinto, Santos and Woodside – all energy & resources companies in our sample of ASX companies which ACCR regularly engages with – against the Global Standard for Responsible Climate Lobbying, the leading investor-led framework for assessing Paris-alignment of corporate climate policy engagement. We focused on these companies because the energy & resources sector has been a major source of political spending in Australia and has demonstrated considerable influence on climate policy.

Our findings show that top Australian companies have poor governance and disclosure of their political spending, compared to the top 500 listed companies in the US. We also find that the five energy & resources companies we assessed do not have strong disclosure and governance of their climate lobbying. Moreover, there is a significant gap between these companies’ committed stances on climate policy and their advocacy efforts. US experience shows, however, that active and consistent investor stewardship can lead to marked improvements in company transparency. As more investors engage with companies to improve their political spending governance, US experience also shows high-performing ‘trendsetter’ and consistently low-performing ‘basement dweller’ companies emerge.

As Australia decarbonises and moves toward increasingly responsible investment practices, investors will need to actively engage companies on political spending and climate lobbying governance if they are to seize opportunities for leadership and avoid falling behind. ACCR encourages investors in Australia to use the CPA-Zicklin Index and the Global Standard for Responsible Climate Lobbying as tools for systematic, measurable engagement with companies – particularly in the energy & resources sector – to boost their accountability as corporate citizens in a decarbonising world.

1.2 Key Findings

  • Leading Australian-listed companies lag far behind US-listed S&P 500 companies on transparency and governance of corporate political expenditure. The 50 leading ASX companies we examined on average scored around a third as well as the US-listed S&P 500 on the CPA-Zicklin Index in 2022. They also scored lower than S&P 500 scores dating back to 2015, when assessments on this Index of companies began. None of the Australian companies scored as high as even the average score of the US companies and the majority scored in the bottom 20% of performance. The majority of US companies scored above 60%.
  • Company size and industry are not limiting factors for performance. There is only a weak relationship between market capitalisation and company performance. Critically, numerous small companies in Australia and the US perform as well as or better than the largest companies in their indexes.
  • The experience of US companies shows a clear and feasible pathway to improved disclosure and governance of corporate political expenditures in Australia. US companies have become markedly more transparent about their political expenditures since the CPA-Zicklin Index started. Disclosure of political expenditures is now mainstream amongst companies and the investor community.
  • Australian companies have likely made modest improvements to their political expenditure governance since 2016. 14 of 20 companies (70%) in ACCR’s 2016 pilot sample had improved by 2022. The average score of the 20 companies increased (by 4.61%).
  • Investor engagement is key to boosting political expenditure governance. US companies that agree to improve their political expenditure governance after being engaged by investors using CPA-Zicklin’s model perform almost twice as well on the CPA-Zicklin Index than companies that have not been engaged by investors. Moreover, even companies that do not come to agreement with investors perform 65% better than non-engaged companies on average. In Australia, no investors have filed shareholder resolutions specially on direct political expenditure.
  • None of five Australian energy & resources companies in our sample of top ASX companies that are a focus of ACCR engagements (BHP, Origin, Rio Tinto, Santos & Woodside) scored highly on the CPA-Zicklin Index. The climate policy engagements of these companies are also not broadly aligned with the goals of the Paris Agreement, according to assessments by the think tank InfluenceMap.
  • These five energy & resources companies do not generally perform strongly on the Global Standard on Responsible Climate Lobbying. Their average performance was only 55.7% and ranged between 39.3-75%. Most companies had a significant gap between their policies on climate lobbying and what they implemented and disclosed. Origin, scoring 75%, made similar commitments to other companies but outperformed them because it took more action on these policies.

1.3 Recommendations for investor stewardship

  • Investors should use the CPA-Zicklin Index and the Global Standard on Responsible Climate Lobbying to measure and improve the transparency and accountability of companies’ political expenditures and climate lobbying. The CPA-Zicklin Index and the Global Standard enable measurement of progress and, beyond the latter uncontroversially seeking alignment with the Paris Agreement, neither is prescriptive to management and boards. They also complement existing benchmarks – such as the Climate Policy Engagement Indicator of the CA100+ Net Zero Benchmark – by providing more granular insight into political spending and advocacy. Both are powerful tools for investors seeking to hold companies accountable to their stated ambitions on political expenditure and climate policy engagement over time. This is critical to ensuring business leadership in a democratic, decarbonising world.
  • The relatively low performance of Australian companies on the CPA-Zicklin Index means opportunities for investors to drive substantial change are plentiful. Investors can accelerate this change through increased engagement. This should be viewed as an opportunity to secure value amidst growing market awareness of corporate citizenship.
  • Investors should prioritise engagement with energy & resources companies given their track record of large political expenditures and negative influence on climate policy.
  • The Global Standard on Responsible Climate Lobbying can drive accountability for corporate climate policy engagement. Like the CPA-Zicklin Index, the Global Standard provides a systematic, scorable and investor-backed framework. The Global Standard’s focus on climate lobbying makes it distinctly useful as a tool for driving alignment of corporate climate policy engagement with the Paris Agreement. Investors can also use the Global Standard to help mitigate greenwashing risk created by ‘say-do’ gaps on climate policy engagement.
  • Investors should identify ways in which companies can improve disclosure and governance both in the short and long term. US companies have generally taken easier actions on the CPA-Zicklin Index first, but do gradually progress to more challenging actions in the longer run. Some outlier companies have also progressed rapidly, going from ‘laggard’ to ‘leader’ status within a year. This means investors should engage companies regularly and with a view to grow their ambition over the long run while not excluding the possibility of rapid action.

Shareholders seeking to engage with companies would therefore do well to help companies identify relatively more manageable improvements in the short term while also seeking to develop ambition to tackle more challenging matters in the longer term. This long term ambition and engagement is important given companies have, as a group, made gradual but ultimately marked improvements over time, rather than overnight. At the same time, investors should not shy away from seeking rapid change: twenty S&P 500 improved by over 50 percentage points between 2021 and 2022, with twelve of these being actively engaged by CPA-partner investors.[4]

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  1. ASIC Deputy Chair Karen Chester, 10 May 2023, ‘ASIC and greenwashing antidotes’, ↩︎

  2. ACCR, June 2016, ‘Corporate Political Expenditure in Australia’,, p4 ↩︎

  3. Lloyd Freeburn and Ian Ramsay, 2021, ‘An analysis of ESG Shareholder Resolutions in Australia’, UNSW Law Journal Issue 44(3), ↩︎

  4. Center for Political Accountability, October 2022, ‘2022 CPA-Zicklin Index of
    Corporate Political Disclosure and Accountability’,, p28 ↩︎

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