Why Sustainability Should Include Political Activity – Professor Tom Lyon in the California Management Review
February 19, 2019 at 07:30 AM EST
Corporate social responsibility (CSR) and sustainability initiatives have gone mainstream, but they are missing something important: They ignore corporations’ political actions, including lobbying and campaign funding, which can drastically alter corporations’ environmental and social impact. In some cases, companies cynically engage in the strategy of “talking green while lobbying brown.” Corporations report on social and environmental sustainability metrics but typically not on political ones, which can allow them to get away with irresponsible lobbying activity.
In “CSR Needs CPR: Corporate Sustainability and Politics,” published in California Management Review, authors Thomas P. Lyon et al. argue that corporations should be as transparent about their corporate political responsibility (CPR) as they are about their environmental and social responsibility. Assessments of corporations’ social and environmental performance should include their support for (or opposition to) public policies that affect sustainability, they argue.
Still, most companies do not provide information about their political activity. “It is understandable that companies prefer to keep their political activities secret, and that they are wary of backlash when their involvement in the public arena is exposed,” the researchers wrote. In fact, “New research shows that firms that have faced a social movement boycott shift their political action away from campaign contributions and towards more covert forms such as lobbying or CEO donations.”
Also, some companies appear to be using their sustainability initiatives as cover for their political efforts to block change. For example, Rhode Island Sen. Sheldon Whitehouse has written about the oil industry: “Given the industry’s massive conflict of interest, there is every reason to believe they are playing a double game: trying to buy a little credibility with these public comments while using all their quiet lobbying muscle to crush any threat of bipartisan action on the carbon pricing they claim to espouse.” Lyon and his team argue that such secrecy is problematic, and “This sort of two-faced strategy makes a mockery of ‘corporate social responsibility’ and turns it into a public relations gimmick.”
Metrics for political activity
Other organizations have moved in this direction as well. The Organization for Economic Cooperation and Development has issued guidelines for transparency and integrity in lobbying. These developments “suggest we are at the cusp of a new wave of demands for political accountability,” the researchers wrote.
What companies can do to embrace transparency on political activity
The concepts of sustainability should be broadened to include a more holistic understanding of how a company affects the social and natural world. “[A]s demands for political transparency grow, it will become increasingly difficult for companies to execute a strategy that involves contradictions between virtuous public statements and self-serving lobbying and other political activities,” the researchers wrote.
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KEYWORDS: university of michigan, Erb Institute, Thomas P. Lyon, political activism, political transparency, sustainability reporting, California Management Review, CSR Needs CPR: Corporate Sustainability and Politics