Climate Exposure Drives Firm Political Behavior: Evidence from Earnings Calls and Lobbying Data

When and how do firms engage in climate politics? We argue that regulatory concerns, business opportunities, and physical risks activate policy preferences and lobbying efforts. We measure firm-level exposure to opportunity, regulatory, and physical aspects of climate change based on discussion in quarterly earnings call transcripts for 11,705 publicly traded firms between 2001 and 2023. We estimate the effect of climate exposure on climate lobbying instances (extensive margin), amount (intensive margin), and targets (political entities). We find that more exposed companies, especially in terms of opportunities and regulation, are more likely to lobby. The type of climate exposure, both absolute and relative to industry peers, dictates whether firms lobby, how much they spend on lobbying, and their choice of government target. Taken together, our findings demonstrate the importance of disaggregating firm-level perceptions of climate impacts to understand patterns in political activity.