Calls for Transparency Around Corporate Political Spend Are Growing Louder. Just 31% of America’s Largest Companies Currently Disclose.

Calls from both the American public and shareholders for greater transparency into corporate spending on political campaigns and lobbying efforts are not new, but they have grown louder and more insistent in recent years. Corporate America’s response to the attack on the U.S. Capitol on January 6, 2021 brought greater attention to if, and how, companies disclose their lobbying spend and contributions they make to political candidates. 

A 2022 survey from JUST, Ceres, and Public Citizen found 80% of Americans think it is very/somewhat important for companies to disclose their political donations and lobbying. And 81% would support federal requirements on political spend and lobbying. Participants in focus groups reaffirmed the importance of greater transparency, suggesting that the American public would trust a company more if they clearly disclosed their actions, including spend on political and lobbying activities. The public wants to see that companies are following through on their commitments – especially as political spend is seen as affecting the regulatory processes that protect workers, the environment, and communities. 

Companies’ hesitancy to clearly disclose political and lobbying spend has long been a source of scrutiny from shareholders. Investors have continued to push for more public data as reporting requirements on political contributions vary by state, making clear, detailed information even less accessible. As proxy season gets underway, investors’ focus is only intensifying. A recent report from As You Sow analyzing ESG-related shareholder proposals found one in five were on “political influence,” including lobbying and contributions, second only to climate. 

Given this heightened call for transparency – and the opportunity companies have at hand to increase trust – we took a look at if and how Russell 1000 companies disclose their political spend and/or lobbying efforts through public-facing corporate materials. 

Key Findings

• Just 31% of the Russell 1000 disclosed spend clearly through their brand’s public-facing online presence for both political and lobbying behaviors, while 44% of companies did not provide disclosure on both political contributions and lobbying spending. 
• Of the JUST 100, 84% provide disclosure on both political contributions and lobbying spending, compared to only 25% of the companies outside of the JUST 100.
• Companies are less likely to disclose lobbying spending than political contributions. Across the Russell 1000 companies we rank:
  • 55% disclose that they made political contributions or explicitly stated that they did not make political contributions. 
  • 32% of companies who disclosed that they spent money on lobbying efforts or explicitly stated that they did not partake in lobbying. 
• Utilities and Energy industries have the highest percentages of companies that disclose clearly on both political transparency metrics, with 82% of Utilities companies providing transparent political disclosure. 
• Technology and Finance industries had the lowest rates of political transparency. Software emerged as the overall industry laggard, with 72% of companies providing no disclosure on both political contributions and lobbying spending.

The state of political spend disclosure

Across the Russell 1000, our analysis found that 31% of companies disclosed spend for both political contributions and lobbying clearly through their brand’s public-facing online presence. On the other hand, 44% of companies did not disclose both political contributions and lobbying spending. Of the remaining companies, 24% disclosed political contributions, but not lobbying spend. Less than 1% of companies disclosed their lobbying spending, but not their political contributions.   

While disclosure of political spending is low across the full Russell 1000 companies within the JUST 100 – the top 100 companies in our 2023 annual Rankings – provided significantly more disclosure on their political spending than the remainder of the Russell 1000. Of the JUST 100, 84% provide disclosure on both political contributions and lobbying spending, compared to only 25% of the companies outside of the JUST 100. Similarly, only 1% of the JUST 100 provide the lowest level of disclosure with no mention of either practice, compared to 49% of the rest of the companies in our Rankings.

Lobbying spend is less often disclosed than political spend

Overall, companies were less likely to disclose lobbying spending than political contributions. Across the Russell 1000 companies we rank, 55% disclosed that they made political contributions or explicitly stated that they did not make political contributions compared to 32% of companies who disclosed that they spent money on lobbying efforts or explicitly stated that they did not partake in lobbying. Following this trend, 67% provided no information on their lobbying spending compared to 44% of companies who did not provide disclosure of their political contributions.

Utilities and Energy industries most likely, Tech and Finance least likely to disclose

Across all 36 industries JUST Capital analyzes, Utilities and Energy had the highest percentages of companies that disclosed clearly on both political transparency metrics. Utilities emerged as the clear overall leader with 82% of companies within the industry providing transparent political disclosure. Energy-related industries such as Energy Equipment & Services and Oil & Gas followed similar patterns of disclosure, with the largest shares of companies in those industries disclosing transparently on both lobbying and contributions. 

Technology and Finance industries had the lowest rates of political transparency. Software emerged as the overall industry laggard, with the lowest percentage of disclosure on both political transparency data points – 72% of companies within the industry provided no disclosure on both political contributions and lobbying spending. Computer Services, Internet, and Technology Hardware follow a similar pattern of behavior, with the smallest share of companies disclosing both, the largest share disclosing neither, and the second largest share disclosing only political contributions. 

Finance l industries similarly struggled to disclose their political and lobbying behaviors. Consumer & Diversified Finance was the overall runner-up behind Software for least transparent disclosure as 67% of companies in this industry provided no disclosure. Banks and Capital Markets follow a similar pattern, with the largest percentage of companies within these industries choosing not to disclose on both political and lobbying behaviors. 

While disclosure may seem risky, transparency and trust go hand in hand for the American public. Providing more disclosure and transparency on their political behaviors is one way companies can help curb the public’s growing distrust of large corporations. The leading industries in this space are no strangers to scrutiny, and have benefitted from clear disclosures that allow them to stay ahead of messaging, reduce reputational risk, and increase trust in consumer confidence. Interestingly, the laggard industries in this space are now under scrutiny that the leaders have long occupied. 

As activist shareholders and the general public continue to demand greater transparency in how companies follow through on commitments to their stakeholders, lobbying and political spending has increasingly been raised alongside the social and environmental efforts these funds are seen as helping or hurting. To weather scrutiny in the public square, companies looking to increase trust can ensure that their political and lobbying spends match their brand values and public commitments, and transparently disclose their spending.

To unpack your company’s political disclosure performance in the 2023 Rankings and gain insights into how to improve on the issues that matter most to the American public, please reach out to corpengage@justcapital.com.