Mixing business with politics: Does corporate social responsibility end where lobbying transparency begins?

Alvise Favotto,Kelly Kollman

doi:10.1111/rego.12275

Alvise Favotto, Kelly Kollman

Open Access

https://doi.org/10.1111/rego.12275

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Journal: Regulation & Governance	Publication Date: Oct 16, 2019
Citations: 13	License type: CC BY 4.0

Affiliation: University of Glasgow

Abstract

AbstractScholars increasingly have argued that the future effectiveness and legitimacy of firms' corporate social responsibility (CSR) activities are dependent on more transparent forms of lobbying to ensure firms' policy positions are aligned with their CSR commitments. Very little empirical work, however, has systematically analyzed firms' lobbying disclosures or examined how these firms coordinate their lobbying and CSR activities. We address these empirical questions by analyzing the CSR reports of 150 corporations from Germany, the UK and the US over an 18‐year period and by conducting interviews with the CSR managers of these firms. We find that corporations have become more transparent about their public policy advocacy over time, thus acknowledging that lobbying is a CSR issue. For most firms, however, this commitment to transparency appears to be largely ceremonial. Few firms disclose the specific policy positions they advocate or sufficiently coordinate the work of their lobbying and CSR units to foster greater alignment of these activities. These modest changes in lobbying transparency appear to be driven by legitimacy concerns and, in a few instances, by governance gaps firms perceive to be relevant to their future business interests.

Highlights

Since the 1990s, large transnational corporations (TNCs) have come under pressure to make transparent and improve the social and environmental impacts they have on society
We seek to address these empirical lacunae by answering the following research questions: (i) How transparent are large, western TNCs about their lobbying activities and have they become more transparent over time? (ii) Do TNCs disclose sufficient information to gauge the alignment of their corporate social responsibility (CSR) and public policy positions? (iii) To what extent do TNCs coordinate the work of their CSR and public affairs1 units to improve the quality of their lobbying disclosures and to better align these two activities? We address these questions by analyzing the CSR reports published by 150 large TNCs in three prominent western economies – Germany, the UK and the US – from the late 1990s to 2013 to evaluate systematically what firms disclose about their lobbying behavior
Our findings reveal that over the 18 years under scrutiny firms have become more transparent about their public policy activities in their CSR disclosures, rhetorically acknowledging that lobbying is a CSR issue

Summary

Introduction

Since the 1990s, large transnational corporations (TNCs) have come under pressure to make transparent and improve the social and environmental impacts they have on society. Lock and Seele (2016)) have argued further that the alignment of firms’ public policy and CSR positions is only likely to come about through more deliberative forms of corporate lobbying in which firms apply the CSR norms of transparency, social accountability, and dialogue to their lobbying activities to forge a common understanding with their stakeholders about the proper role of government regulation in addressing collective societal problems (Lock & Seele 2016). This literature posits that both the effectiveness of political CSR and large corporations’ social license to operate likely depend on firms moving from more instrumental to more deliberative forms of lobbying.

Political CSR and public regulation

Data and methods

Discussion

Findings

Conclusion

The breakdown of Krippendorff alpha for policy areas is as follows