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Directive (EU) 2022/2464, known as the Corporate Sustainability Reporting Directive (CSRD), marks a significant step towards integrating lobbying and public affairs practices into corporate sustainability reporting. This approach is part of a broader evolution of Corporate Social Responsibility (CSR), which has moved from concepts such as Corporate Citizenship towards a growing focus on Corporate Political Responsibility.
The European Commission’s 2001 Green Paper contains one of the first definitions of Corporate Social Responsibility (CSR), described as a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders. This definition highlighted the importance of companies contributing to the improvement of society and to the protection of the environment.
In 2011, the European Commission broadened the concept, describing CSR as “the responsibility of enterprises for their impacts on society”: companies that embrace CSR therefore pursue not only economic objectives but also environmental sustainability and social well-being, promoting ethical and transparent practices and contributing to sustainable development.
In parallel, since the late 1990s, the Global Reporting Initiative (GRI) has encouraged the preparation of sustainability reports through voluntary adherence to a comprehensive and widely recognised reporting model. This model aims to improve the comparability, reliability and verifiability of information. Today, the GRI is the most widely adopted sustainability reporting standard worldwide.
Among the indicators it proposes, GRI 415: Public Policy is a specific standard focusing on the transparency of organisations’ activities in the field of public policy. It requires companies to report on how they manage their interactions with the political process, including aspects such as lobbying and financial contributions to political parties or causes.
The growing relevance of CSR practices, and their possible new dimensions, was explored in a 2019 paper by Alvise Favotto and Kelly Kollman, entitled “Mixing business with politics: Does corporate social responsibility end where lobbying transparency begins?“. In addition to examining the reporting of social responsibility (sustainability performance reporting standards, sustainability reports, etc.), Favotto and Kollman extend the common meaning of CSR to include the reporting of corporate lobbying activities. They argue that alignment between companies’ public policy positions and their CSR commitments can only be achieved through more transparent forms of corporate lobbying, in which companies apply CSR principles to their lobbying activities with the aim of building an open dialogue with their stakeholders.
In 2021, Bohnen was among the first European scholars to introduce the concept of Corporate Political Responsibility (CPR), which extends CSR to the political sphere of companies engaged in interest representation. CPR sets out a methodology for the transparent reporting of lobbying activities and political relations, underlining the importance of ethical and responsible governance. In particular, the author identifies four fields of action:
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More recently, the European Union has also embraced this approach, introducing lobbying disclosure for the first time with the adoption of Directive (EU) 2022/2464, based on the Global Governance Principles. These are the principles of the ICGN (International Corporate Governance Network), which provide a reference framework for effective corporate governance practices.
Directive 2022/2464, also known as the “Corporate Sustainability Reporting Directive” (CSRD), focuses specifically on corporate sustainability reporting and was designed to improve and standardise the sustainability information companies are required to disclose. Its aim is to increase companies’ transparency and accountability regarding their environmental, social and governance (ESG) impacts. The directive also broadens the scope of application compared with the previous Non-Financial Reporting Directive (NFRD) of 2013.
The CSRD therefore represents a significant step forward in promoting greater transparency and accountability in business practices. In this renewed context, the reporting of lobbying activities in particular becomes a key element in ensuring that companies operate ethically and consistently with their corporate culture, contributing positively to public debate and to policy decisions affecting collective well-being.
Of particular relevance within Directive (EU) 2022/2464 is Article 29b, which sets out the general principles and guidelines to be followed in sustainability reporting. This article is designed to ensure the quality of information and to provide a clear and precise reference framework for reporting.
Article 29b establishes a series of criteria and standards that companies must meet to ensure that the information they disclose is accurate, complete and verified. This ensures greater transparency and reliability of sustainability data, facilitating comparison between companies and strengthening stakeholder trust in business practices.
The most significant innovation introduced by Article 29b is the explicit inclusion of lobbying activities among the information companies are required to disclose under governance factors. Specifically, point (c)(iv) states that companies must report on “the undertaking’s activities and commitments related to exerting its political influence, including its lobbying activities“.
This is a fundamental step towards greater corporate transparency regarding companies’ role in political and decision-making processes. Lobbying activities, often perceived as opaque, are thus brought to light, giving all stakeholders – including citizens, regulators and investors – a clear and detailed view of how companies seek to influence public policy. Above all, the directive places lobbying among governance factors as a strategic element, rather than among the operational practices carried out, for instance, to ensure compliance with environmental and labour rights standards.
Delegated Regulation (EU) 2023/2772 supplements Directive (EU) 2022/2464 with regard to sustainability reporting standards, providing detailed guidance on how to implement the reporting of lobbying activities. The regulation has applied since 1 January 2024.
Lobbying activities are defined as activities carried out with the objective of influencing the formulation or implementation of policy or legislation, or the decision-making processes of governments, governmental institutions, regulators, institutions, bodies, offices and agencies of the European Union, or standard setters. In particular (non-exhaustively):
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Among the sustainability matters to be included in the materiality assessment under the “Business conduct” category is “Political engagement and lobbying activities“. This means companies must provide detailed information on their activities and commitments related to exerting political influence, including lobbying activities concerning material impacts, risks and opportunities. The disclosure requirement aims to ensure transparency on the company’s activities and commitments related to exerting its political influence, including the types and purpose of its lobbying activities.
The disclosure required under paragraph 27 includes, where applicable, the representatives in the administrative, management and supervisory bodies responsible for overseeing these activities. With regard to financial or in-kind political contributions, companies must disclose the total monetary value of financial and in-kind political contributions made directly and indirectly, aggregated by country or geographical area where relevant, as well as the type of recipient or beneficiary.
Where appropriate, companies must specify how the monetary value of in-kind contributions is estimated. The disclosure must also include a summary of the main topics covered by the company’s lobbying activities and its main positions on them, including an explanation of how these relate to the material impacts, risks and opportunities identified in the materiality assessment under the European Sustainability Reporting Standards (ESRS).
If the company is registered in the EU Transparency Register or in an equivalent transparency register of a Member State, it must provide the name of the register and its identification number. The disclosure also covers the appointment of any members of the administrative, management and supervisory bodies who, in the two years preceding their appointment in the current reporting period, held a comparable position in public administration, including regulatory authorities.
The regulation then provides an example of how lobbying disclosure could be structured:
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This example shows how companies should detail not only the resources dedicated to lobbying, but also the specific objectives they seek to achieve, the issues on which they are advocating and the results obtained.
The Directive is also being transposed in Italy: the Chamber of Deputies and the Senate have completed their examination of the Draft Legislative Decree transposing Directive (EU) 2022/2464, and, at the time of writing, final approval by the Council of Ministers is awaited for its entry into force.
EXPERT INTERVIEW: PROF. MARIA CRISTINA ANTONUCCI, PROFESSOR AT THE EXECUTIVE MASTER IN SUSTAINABLE MANAGEMENT, LUMSA
In your view, what are the main benefits and the greatest challenges companies will face in implementing CSR practices, particularly with regard to the reporting of lobbying activities?
First of all, including transparency on lobbying practices – understood as strategic activities led by corporate governance – among the activities to be disclosed in sustainability reports has the great merit of bringing this activity to the surface in the Italian system through the implementation of the European directive, even in the absence of dedicated national legislation.
The need to comply with the European directive – over a sufficiently long and progressive timeframe, from 2024 to 2028 depending on the type of company required to publish these reports – will allow companies that use lobbying and other instruments of political influence to disclose not so much the lobbying carried out as the purposes behind it, in two respects: as a lever for business development driven by governance, and in specific relation to the organisation’s declared sustainability policies. This public disclosure of the resources devoted to lobbying, and of the consistency of these activities with sustainability commitments, has the great advantage of building knowledge among corporate stakeholders and enhancing organisations’ public reputation.
Moreover, the provision for external assurance of reports, the system of public oversight and the introduction of penalties open the entire sustainability reporting process to a system of verification and control geared towards public trust in organisations – which are increasingly less bound to voluntary compliance with standards and increasingly engaged in dialogue with other organised stakeholders in the sustainability field.
These are substantial innovations (from compliance with international standards to European-level obligations) for a broad range of companies, but the process of adapting to European requirements can bring major benefits to the companies taking up this challenge.
How do you think Directive (EU) 2022/2464 and Delegated Regulation (EU) 2023/2772 will influence public perception and consumer and investor trust in companies?
The reputational benefits arising from corporate transparency and accountability open up new potential in a market where stakeholder chains – from consumers to investors – are increasingly sensitive to and aware of the strategic role of sustainability. Consumers now navigate the business landscape by choosing the companies that best meet the (environmental and social) sustainability standards that represent them. They will now have external assurance and control tools to verify companies’ sustainability practices. For investors, there will be more reliable and standardised data to assess the ESG risks associated with companies, enabling more accurate evaluations of sustainability performance. Access to detailed and comparable information will reduce uncertainty and increase confidence in investing in companies that demonstrate responsible management of ESG risks, supporting better-informed investment decisions.
Investors will also be able to carry out more effective comparative analyses across companies and sectors thanks to uniform sustainability reporting standards, improving the quality of investment decisions. All these elements strengthen systemic trust both in companies that embrace sustainability and in the overall system that verifies its methods and objectives.
Are you aware of established corporate best practices in reporting lobbying activities within CSR practices? What can we expect to find in Italian companies’ 2025 reports?
There is still ample room for development on this topic. Even the companies that stood out for their non-financial reporting in the annual award granted by the University of Pavia’s Observatory in 2023 presented some interesting elements – such as Banca Mediolanum, which disclosed the main regulatory bodies and institutions worldwide with which it maintains stable institutional relations. Moreover, among the award winners for sustainability reporting, Maire Group dedicates an extensive section of its Report to its code of ethics and business integrity policies, consistent with the internal regulatory framework and the international ISO 37001 standard. An always interesting reference, for the humanistic way in which the topic is addressed, is Brunello Cucinelli’s Sustainability Report, which frames institutional relations within “Human relations”, reflecting on the ethical management of activities with public administrations and regulatory bodies. I believe the new standards introduced by the regulation will integrate and harmonise the approaches companies have experimented with so far, more clearly distinguishing lobbying from anti-corruption matters. And I think this is good news for those who care about the distinction – well established among those who work in or study the sector – between two entirely separate fields.
How can companies balance their commitment to sustainability and social responsibility with economic and competitive needs, especially in light of the new provisions on lobbying disclosure?
Standardising reporting procedures, and leveraging the resources already deployed for existing corporate activities (Legislative Decree 231/2001 compliance, anti-corruption, whistleblowing) while extending their scope to the reporting of lobbying activities, seem to me the two most effective paths to balance sustainability with the needs of economic competitiveness. The directive has the great advantage of being easily and fully absorbed into the Italian system, and in many respects the identification of uniform standards allows the business community to embark on a governance sustainability path that is easy to adopt. Specialised training and the role of consultancies focused on these areas can play an important part for companies approaching these issues in a new way.
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Partner & Chief Innovation Officer ADL Consulting