Studies show that companies continue to exert political pressure on governments. Large and powerful private companies are affecting regulatory changes, primarily in relation to social and environmental issues, through active lobbying, membership in advisory committees and other traditional political channels.
Defining CSR and Political CSR
Defining the difference between Corporate Social Responsibility (CSR) and Political CSR has long tested scholars. However, CSR can be used as an umbrella term for a variety of concepts and practices, all of which recognize that companies have a responsibility for their impact on society and the natural environment. Some companies take this beyond legal compliance and the liability of individuals.
One of the most important things that companies need to establish is transparency. Companies who are using their influence to shape political policy also need to be honest about their political agenda.
According to a University of Michigan study, of the Fortune 500 global companies, four-fifths now issue sustainability reports, describing a wide variety of environment-friendly activities. However, there are two sides to this. While on the surface, these reports show the company to be committed to a cause, there is fine print that should be taken into consideration. Think tanks such as the Property and Environment Research Center advocate “free-market environmentalism,” frustrated that government intervention to protect the environment has gone too far, while non-governmental organizations (NGOs) such as the Rainforest Action Network have embraced “private politics,” engaging directly with corporations to advocate for change because they feel that government intervention has not gone far enough.
Who Is Responsible?
Traditionally, funding for social and environmental welfare has been the responsibility of the state. However, the private sector has been increasingly providing support and influencing segments of social and environmental concerns.
The diversity of business interests mean that their involvement in public policy is complex. Businesses do not want to be vocal about concerns that could potentially damage the interests of their shareholders. Some companies will support policies that enhance sustainability, while others will oppose them. But more importantly, companies and their CEOs who are actively politicising their business with CSR declarations need to be transparent about their politics.
Should Your Business Develop a CSR Declaration?
When choosing which cause your business will declare responsibility for, it is important to ensure that the cause agrees with your company values. While most businesses will have some declaration of duty of care towards employees rights and environmental issues, a CSR means taking the next step and becoming an active voice regarding the issue.
Businesses who choose to fundraise for environmental concerns, or release impact statements, or launch product lines that make claims to support sustainability need to ensure that they do, in fact, support the cause they are advocating for. Many fast fashion companies have made claims that they use ‘organic’ or ‘sustainable’ materials, however, on closer inspection, these claims hold little weight. While these multinationals’ profits are little affected by counterclaims about their commitments, stakeholders often do not want to be associated with businesses who are shown as insincere.
