Fans of popular political dramas such as “House of Cards,” “Veep” and “The West Wing” can recognize the often troubling influence of lobbyists in politics. While these shows are fictional, it’s well known that large corporations spend billions each year to sway policies and influence elections to benefit their bottom line. Although some of this spending is disclosed, much remains hidden from shareholders, stakeholders and the public. And because so much is undisclosed, it can be very difficult to gauge just how much corporations are steering public policy from behind the scenes. United Church Funds (UCF) is therefore working to bring greater transparency to this murky field of corporate influence.
What Is Lobbying?
At its best, corporate lobbying can help shape policies that promote job growth and technological advancement or champion legislation that benefits society as a whole. Companies in healthcare, for instance, often lobby for funding for medical research or public health programs that can lead to improved treatments and better access to healthcare.
Then there is the underside of corporate lobbying overshadowing these benefits. For example, mining companies routinely lobby against safety regulations and environmental protections, promoting policies that favor short-term gains over long-term sustainability. Financial institutions, too, have historically lobbied to roll back consumer protections, weakening oversight intended to safeguard the public. Industries such as tobacco, alcohol and fast food have also used lobbying to delay or weaken public health regulations, pushing back against initiatives like advertising restrictions or labeling requirements.
How Much Is Spent—and Where?
In 2023, corporations reported spending $5.6 billion on lobbying, and that is only what has been reported. The health sector, particularly pharmaceutical companies, spent the most, at least $754 million in 2023. The tech sector spent at least $342 million on lobbying, a significant portion focused on regulations related to Artificial Intelligence (AI).
Much of the undisclosed corporate lobbying is funneled through trade associations and so-called “dark money” groups operating at national and local levels. Publicly traded companies often contribute to political nonprofit trade associations, such as the U.S. Chamber of Commerce, which are allowed to lobby on behalf of members without disclosing individual donors. This lack of transparency makes it nearly impossible for the public to understand the full extent of corporate influence on policymaking.
Why Responsible Investors Care
Responsible investors who seek to avoid doing harm with their investments are calling for greater transparency. Investors want to know if companies are lobbying for policies that are detrimental to people and the planet.
More broadly, investors and the general public want to know that the markets are managed with a focus on fairness and transparency. Investors should know if a handful of companies in their portfolio benefit from rules that protect those who lobby the most at the expense of smaller companies that are unable to compete.
Transparency in lobbying would require that Big Oil, Big Pharma and Big Tech disclose all the money they are spending to influence public policy. In the last two years, UCF has led shareholder resolutions at Meta (Facebook) and Alphabet (Google) to increase their lobbying transparency. In 2024, 41% of independent shareholders voted in support of UCF’s Alphabet shareholder resolution, which suggests that many investors support additional transparency.
A Call for Raising the Standard in Corporate Lobbying Transparency
The landmark 2010 Citizens United Supreme Court ruling that generally opened the door to corporate political spending created downstream effects such as enabling unaccountable lobbying practices. To address these issues, there has been a growing call for increased transparency and accountability. Initiatives like The Responsible Lobbying Framework encourage companies to abide by a higher standard of conduct than current law requires. This framework emphasizes the importance of lobbying that is transparent and upholds the highest values of corporate social responsibility.
While lobbying can sometimes drive beneficial change, the lack of transparency and the potential for abuse highlight the urgent need for responsible practices. By raising the bar on transparency, companies can reassure the public that their influence on policy promotes a flourishing and sustainable economy, not just their own short-term interests. As a part of UCF’s investment oversight, we will continue to call on companies to commit to diligent oversight of lobbying practices and full transparency.
Learn more about UCF’s Responsible Investing initiatives.
Stay up-to-date and be the first to know about new resources, market updates and initiatives that can support your church/organization’s financial goals. CLICK HERE to subscribe to our monthly newsletter.