Soft Law Engagements and Hard Law Preferences: Comparing EU Lobbying Positions between UN Global Compact Signatory Firms and Other Interest Group Types

Onna van den Broek

doi:10.1017/bap.2021.2

Abstract

AbstractAlthough corporate social responsibility (CSR) has gone “mainstream,” the relationship between CSR and corporate political activities (CPA) has received little scholarly attention. This is problematic because firms potentially have a more sizable impact through their lobbying activities for socially and environmentally beneficial (or unbeneficial) public policies than through their own operations. This paper investigates if, and how, UN Global Compact signatory firms differ in their policy preferences on key EU proposals compared to other interest groups. To capture state-of-the-art data on firms’ policy preferences, I draw from the INTEREURO database, which includes firms’ lobbying positions on forty-three directives and twenty-seven regulations covering 112 public policy issues in the European Union. Statistical results show that Global Compact signatory firms significantly lobby for stricter regulation than non-signatory firms and industry associations, however, their positions are still lower than nonbusiness groups. These results are similar across various public policy issues and suggest that the regulatory preferences of firms’ participating in soft law CSR initiatives are more aligned with stakeholders' interests. This paper contributes to public policy literature exploring the relationship between hard and soft law as well as literature studying the political representation of divergent interest.

Highlights

Introduction “We still see a widespread disconnect between businesses’ aspirations towards responsible corporate citizenship and their own lobbying efforts
To gain a better understanding of the data, I start by examining the median (ME) policy preferences of Global Compact signatory firms and non-signatory firms in the final sample relative to the median outcome, median reversion-point (RP), and median preferences of the European Commission (EC), industry associations, and nonbusiness interest groups
All median preferences are policy proposal specific rather than firm specific; put differently, they correspond to lobbying activities on specific proposals and policy issues

Summary

Introduction

Introduction “We still see a widespread disconnect between businesses’ aspirations towards responsible corporate citizenship and their own lobbying efforts. Kinderman has refuted Gjølberg’s finding by studying the role Nordic governments, business associations, and companies played in the negotiations over the European Union’s corporate transparency Directive 2014/95/EU They found that Nordic countries have strong CSR performances, this did not translate into strong support for more stringent regulation.. The paper marks a methodological advance on existing studies by being both policy specific as well as encompassing a broader array of policies—rather than solely focusing on corporate accountability policies—in a quantitative manner Fourth, it attempts to capture a more thorough picture of lobbying by gathering firms’ policy preferences directly from policymakers instead of focusing on third-party data or self-identified policy positions, which are common approaches in existing studies. I provide tentative evidence that Global Compact signatory firms prefer more regulation and are more aligned with stakeholders’ interests than other firms and business groups

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Conclusion