CSR and corporate lobbying

Since the turn of the century, large corporations in Western democracies have come under pressure to show that they are socially and environmentally responsible actors. This has been accompanied by a drive to ensure companies lobby public officials in more transparent and less narrowly instrumental ways. Until recently, efforts to promote corporate social responsibility (CSR) and responsible forms of lobbying have largely taken place independently. CSR and corporate sustainability have come to prominence through mostly voluntary, multi-stakeholder initiatives (MSIs) such as Fairtrade, while lobbying transparency has generally been fostered through state regulation in the US and European democracies.

As a result few companies, even those with strong CSR policies and reputations, consider their lobbying activity to be a CSR issue. In a study two of us recently published in Regulation & Governance we found that only a minority of large corporations in Germany, the UK or the US included lobbying activity in their CSR disclosures. Even fewer offered a detailed account of the environmental or social policies they advocate, despite the impact such lobbying efforts can have on the sustainability issues these companies claim to champion.

Lack of openness about their public policy advocacy makes companies vulnerable to accusations of a particularly pernicious form of CSR-washing: one in which firms use their reputation for good to facilitate de-regulatory lobbying, often in the same areas as their CSR commitments. In a prominent example oil multi-nationals, Shell and BP, both of which promote their commitment to decarbonization, recently have been called to appear before a US Congressional committee to explain ‘misleading’ climate lobbying.

Such concerns have led sustainability activists, NGOs and even members of the investor community to question these corporations about the alignment of their well-publicised CSR commitments and their much less visible lobbying positions. As Tom Lyons and his collaborators argued in a widely cited article, corporate social responsibility needs to be matched by corporate political responsibility.

Despite growing apprehensions about CSR-washing and the power of corporate lobbying, we know very little about how companies’ CSR commitments shape their relations with policymakers. We know even less about the policy positions these corporations advocate. It was these concerns and questions that led us to undertake research supported by a Leverhulme Trust grant to examine these relationships more closely.

Specifically, we looked at how the CSR reputations of large corporations operating in the UK affect the access these companies have to UK policymakers. We further examined if companies with stronger CSR commitments lobbied policymakers in different and more responsible ways than those with weaker commitments. Building on the work of Lyons and other scholars, we define responsible corporate lobbying as policy advocacy that is aligned with the social and environmental goals of corporate sustainability, offers policymakers high quality evidence to reach these goals and fosters genuine dialogue between business actors and policymakers about the proper role for state regulation in curbing the negative impacts of market activity.

By tracking the number of meetings FTSE 350 companies had with UK ministry officials, how often these companies appeared before particular Westminster committees and analysing the content of company committee testimony, we found, in unpublished results, that the CSR credentials of these corporations significantly shape both their access to policymakers as well as the nature and content of their lobbying. High CSR companies are more likely to meet with British policymakers, both ministry officials and legislators. Crucially, they are also more likely to engage in more responsible forms of lobbying than companies with less developed CSR commitments.

In their committee testimony, high CSR companies were more likely than low CSR companies to:

• discuss and support state interventions into the market via binding regulation

• offer policymakers sophisticated justifications for their policy stances and to use a broader array of reasons for their policy positions that include but also go beyond their market interests.

• mention their sustainability activities in their testimony and underpin their policy evidence with data drawn from these programmes.

However, it is important to emphasize that our findings suggest companies with strong CSR commitments lobby in a more responsible manner than low CSR organizations. These companies do not fully or even mostly meet the standards of responsible lobbying as laid out in the academic literature and advocated by civil society groups. Nor is their policy advocacy fully aligned with the social and environmental goals of corporate sustainability.

Despite the tendency for better CSR performers to engage in more responsible lobbying, their efforts remain largely geared towards instrumental economic goals rather than a broader notion of the public good. Although high CSR companies use a broader array of justifications for their policy stances than low CSR companies, including appeals related to the effectiveness of proposed measures, they only rarely used the language of ethical commitment or the public good when justifying these positions. Thus, the more responsible nature of high CSR companies’ lobbying does not mean that their interventions will lead to better welfare outcomes for society.

What do these findings imply about the regulation of corporate lobbying and the role that CSR can play in fostering more ethical forms of corporate political engagement? First, companies’ CSR policies and commitments appear to be associated with and encourage more responsible lobbying. Unlike some accusations of CSR-washing, large corporations in the UK do not predominantly appear to be using their sustainability activities to promote self-regulation or to argue against state regulation.

The findings also highlight that much more could be done to link companies’ CSR and ethical lobbying commitments. The following measures could be good places to start:

• A greater number of MSIs and rating schemes should follow the lead of organizations such as the Global Reporting Initiative and FTSE4Good and include lobbying disclosure in their reporting guidelines.

• Clearer and more specific standards of lobbying disclosure need to be developed within these soft law initiatives to encourage corporations to reveal the content of their lobbying and to make them publicly accountable for any misalignment between their policy advocacy and CSR commitments.

• State regulation of lobbying transparency could also be strengthened. More regulation should include requirements to disclose the content of corporate lobbying. To date most transparency laws have focused on disclosing which public officials corporate lobbyists meet and how much money companies spend on their policy advocacy.

Such soft and hard law measures could help to bring about two central goals of the responsible lobbying agenda: compelling corporations to give an account of the compatibility of their policy advocacy and CSR commitments & fostering better dialogue between corporations, policymakers and civil society actors about the proper role for state regulation in meeting key sustainability goals.

About the authors