Political institutions, in particular parliaments, adopt laws that guide citizens and companies. As quite a few laws limit the freedom of action of individuals, to the benefit of society at large or the environment, there is often open opposition against certain legislative proposals from pressure groups. This is often the case with laws that regulate companies.

The financially strong (and mostly bigger) corporations are organised in lobby groups that seek to influence politicians involved in the legislative process. Such groups regularly try to dilute legislative proposals prior to any parliamentary debate, to make laws less burdensome for companies.

Lobby groups throughout the EU tell politicians on many occasions that some legislative proposals create ‘administrative burdens’ for business, which would lead to unreasonably high costs if implemented. This vague umbrella term has been frequently used in past years to stop or change legislative proposals that aim for better employee rights, environmental protection and better supervision of economic activities. A classic example for successful lobby activities is the CSR Guideline of the EU, the original intention of which was to make reporting on CSR strategy and implementation mandatory for tens of thousands of companies in the EU. They would have had to report annually on their approach to strengthening environmental protection, workers rights and other positive societal effects of their activities. Lobby groups advised politicians that such a guideline would endanger companies’ success, as reporting would cause extremely high costs, particularly for SMEs. Since they could not prevent the guideline, they successfully approached politicians to limit its scope.

Lobby groups also like to influence legislation on converting a fossil fuel dependent economy into a sustainable energy economy. They often tell concerned politicians that their legislative plans are too ambitious and too expensive for business. They frequently use jobs –or the loss of jobs- as an asset in their communication with politicians. It is not clear whether many companies will really lay off employees. In most cases it seems highly unlikely, considering the damaging effect any environment-related job cuts would have for the reputation of companies. Also, the costs involved for companies are massively exaggerated by lobby groups and often do not reflect real situations. Be that as it may, for politicians that would like to be re-elected, the prospect of job cuts provides for a good incentive to limit potential costs of laws for companies. This, however, dilutes the goals of legislation, which are particularly important in the context of decarbonising the economy. A law that is too weak to produce results is useless. But we need results to prevent a climate catastrophe for humans.

Financially strong lobby groups are often successful in their activities, since they have nearly unlimited access to Members of Parliament and of the EU Commission. In the absence of a strong citizen lobby group, no politician is immune to pressure of business lobby groups. Industry lobby groups have even gained permanent access to planning units of the EU Commission, which are involved in the drafting of legislative proposals. Lobby groups ‘help’ EU planning staff to draft proposals for EU laws, taking care that they don’t hurt their own interests. Such laws must be converted into national law by all EU Member States. Hence, they address the entire European Union.

More Info

Where can I get more info on lobby groups?

The non-profit organisation ‘Corporate Europe Observatory (CEO)’ has published various background pieces on activities of lobby groups with the EU Commission. This includes analysis of corporate lobby groups’ influence on certain proposals, such as free trade agreements with non-EU countries, business-friendly revisions of proposals for EU laws with an ecological or social dimension and special fields such as regulating the growth of genetically modified crops in the EU.

http://corporateeurope.org