Lobbying as a substitute for sustainability? Corporate political engagement and CO2 emissions

Following the sharp increase in the extent and scope of lobbying activities observed recently in the United States (US), this work examines how corporate lobbying activities affect environmental outcomes, focusing on US firms. Resource dependence, neo-pluralist, and institutional theories suggest that lobbying activities may act as a substitute for environmental commitment. To test this idea, we use a panel of S&P 500 firms from 2014-2022 and we estimate a dynamic model where CO 2 emissions are explained by lobbying contributions. Our results show a significant and positive effect of lobbying activities on total CO 2 emissions, implying that political engagement allows firms to delay costly transitions toward greener technologies. Sectoral analysis reveals that the emissions-increasing effect of lobbying is most pronounced in energy, technology and utilities, whereas it is weak or negative in financials and real estate. The findings point to a divergence between ESG evaluations and environmental performance and underscore the need for more transparency in ESG metrics.