Ethical Performance
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Firms told: ‘lobby for good’

February 2009

Too few companies use their lobbying powers to push for beneficial social change, says a new paper.

Authors Kyle Peterson and Marc Pfitzer, directors at the US-based consultancy ESG Social Impact Advisors, argue that while an increasing number of businesses are examining whether their lobbying positions conflict with their corporate responsibility policies and programmes, only a small minority progress to ‘lobbying for good’ on social issues relevant to them.

Among exceptions are the cosmetics multinational Mary Kay, which successfully lobbied the US government to renew its Violence against Women Act in 2006, and General Motors, whose Safe Kids campaign contributed to an increase in the number of US states with laws on using child car seats from two in 2002 to 45 in 2008.

The paper, published in the latest issue of the Stanford social innovation review, says many companies decide against lobbying for good because they fear it could invite scepticism and suspicions of a hidden agenda – such as trying to boost the sale of their products.

Businesses also like quick results, and may find the task of influencing lawmakers on social issues ‘complicated and tedious’. Positive outcomes take years, and sometimes never happen. In addition, some companies think lobbying for good is not a role for business.

The authors of the paper claim, however, that lobbying has the potential to be ‘one of the most powerful forms of CSR’ because business has so much influence in the corridors of power.

CQ MoneyLine, a body that monitors lobbying, says US companies spent $2.6billion (£1.77bn) on talking to federal government, while ActionAid says European companies spend between €750million and €1bn ($995m–$1.33bn, £677m–£900m) annually on lobbying the European Union.

The paper argues that businesses should appreciate that lobbying for good is a way of building better relationships with policymakers. ‘Rather than merely partnering with policymakers to cut the ribbon on a donated building, lobbying for good requires a much more substantive form of engagement,’ it says.

The authors cite the case of Levi Strauss, whose government affairs team recently persuaded Guatemala’s labour ministry to strengthen its labour laws. As a result, they claim, ‘the US government now perceives the company as an industry leader and comes to Levi Strauss to discuss textile trade issues’.

However, the paper warns that the growth of lobbying for good will require resistance against two typical ‘knee-jerk reactions’ – one from critics in non-governmental organizations who believe corporate lobbying in any form is undemocratic and bad for society, and the other from corporate managers ‘who look to lobbying merely to defend the status quo’.

Some aspects of corporate lobbying in the US are expected to become more difficult now that Barack Obama has moved into the White House. One of the first acts of the new president last month was to introduce a rule barring anyone in his administration from working on an issue they have dealt with previously as a lobbyist. Anyone leaving the administration also now has to agree not to work as a lobbyist for two years.

ESG Social Impact Advisors | Global | Lobbying

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