The forthcoming article “Climate exposure drives firm political behavior: Evidence from earnings calls and lobbying data” by Christian Baehr, Fiona Bare, and Vincent Heddesheimer is summarized by the author(s) below.
As the world races to decarbonize, firms are increasingly on the front lines of climate politics. Some champion bold policies; others resist them. What explains these divides? How do firms translate their diverse climate experiences into political action?
We develop a framework that links different types of climate exposure to distinct forms of corporate political behavior. Climate exposure is multidimensional: some firms see climate policy as a source of market opportunity, others as a regulatory constraint, and still others as a physical threat to assets and supply chains. Our framework highlights how these exposure types shape firm decisions to lobby based on variation in motive, policy good type, and expectations about the timing of impact. Crucially, what matters is not just the type of exposure, but its degree relative to competitors – firms that are more exposed than their peers have stronger incentives to act politically. Opportunity exposure generates incentives to push for ambitious policies that expand markets; regulatory exposure triggers efforts to shape or slow costly rules; and physical exposure (damage from floods, heat, or storms) rarely mobilizes lobbying at all.
To test this theory, we combine a novel text-based measure of climate exposure, drawn from 20 years of corporate earnings-call transcripts, with comprehensive U.S. lobbying data covering more than 11,000 publicly traded firms. Firms most exposed to opportunities and regulation compared to others in their industry are substantially more likely to lobby on climate issues and to spend more when they do. The type of exposure also predicts where firms lobby: opportunity-exposed firms target innovation-oriented agencies like the Department of Energy, while regulatory exposure directs attention to the Environmental Protection Agency and Congress.
A case study of the automotive industry illustrates the mechanisms at work. Within the same sector, firms such as Ford and General Motors, more exposed to electric-vehicle opportunities, actively supported clean technology and infrastructure policies, while Toyota, facing higher regulatory risk, lobbied to slow emissions standards. These within-industry contrasts exemplify how relative exposure shapes corporate strategy.
Taken together, our findings suggest that climate politics are not a zero-sum contest between corporate winners and losers, but rather a complex arena in which firms weigh not only the direct risks and opportunities of climate action but also those faced by their closest rivals. Theoretically, the paper contributes a new framework for understanding how multidimensional, relative exposure across opportunity, regulatory, and physical dimensions shapes firms’ political behavior. Empirically, it integrates large-scale earnings call and lobbying data to capture how these perceptions translate into action. By linking these insights, we show that corporate engagement in climate policy is dynamic and uneven, with important implications for how business power will shape the trajectory of decarbonization.
About the Author(s): Christian Baehr is a Ph.D. Candidate in Politics at Princeton University, a Graduate Affiliate of the Niehaus Center for Globalization and Governance, and a Graduate Fellow with the Princeton Sovereign Finance Lab, Fiona Bare is a Ph.D. candidate in the Department of Politics and a 2025-2026 Prize Fellow in the Social Sciences at Princeton University, and Vincent Heddesheimer is Ph.D. candidate at the Department of Politics at Princeton University. Their research “Climate exposure drives firm political behavior: Evidence from earnings calls and lobbying data” is now available in Early View and will appear in a forthcoming issue of the American Journal of Political Science.
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