Mixing Business with Politics: Does Corporate Social
Responsibility End Where Lobbying Begins?
Alvise Favotto, University of Glasgow
Kelly Kollman, University of Glasgow
1
Overview
• Research Question:
– How [if at all] do firms incorporate information about their
political engagement in their CSR disclosure?
• Motivation:
– CPA scholarship:
• Firms attempt to influence government policy in favourable ways
through activity such as lobbying, campaign finance etc.
– Private CSR governance:
• Firms voluntary engage in CSR programmes aimed at improving the
relations they have on the societies in which they operate
– Very little work on the interaction of these two modes of
political behaviour
2
Overview
• Research Question:
– How [if at all] do firms incorporate information about their political
engagement in their CSR disclosure?
• Theoretical background:
– Private CSR governance:
• Increasing number of firms entering voluntary CSR schemes
• Compliance with schemes is likely to vary depending on issue covered (Anner
2012)
– Implications for transparency on political activity reporting?
– Business management literature:
• Models CPA-CSR relation in terms of alignment (De Hond et 2014)
• Mixed evidence on decision-making alignment
– Implications for alignment of CPA disclosure in CSR reporting?
3
Methods and Data
• Content analysis of the CSR reports
– 100 TNCs (50 US and 50 German) at 3 points in time (1995-99;
2005-06; 2012-13)
– Firms are drawn from Compustat Database
– Two sub-samples are roughly matched in terms of firm size and
mix of sectors
– Time periods represent formation of sustainability field.
– German / US comparison examines two different CSR traditions
• A self-generated coding frame: lobbying arena; lobbying areas
mentioned; firm’s position; integration
• Complement quantitative approach to TNC norm reception and
practice with qualitative textual analysis
4
100
90
80
70
60
Germany
USA
50
Aggregate
40
CSR reports
30
20
10
0
1995-99
2005-06
2012-13
Lobbying Reporting by German and US Firms over Time
5
3
2.5
2
Germany
1.5
USA
Aggregate
1
0.5
0
1995-99
2005-06
2012-13
Average Integration by German and US Firms over Time
6
5
4.5
4
3.5
3
Germany
2.5
USA
2
Aggregate
1.5
1
0.5
0
1995-99
2005-06
2012-13
Average Lobbying Areas Coverage by German and US Firms over
Time
7
Aggregate Lobbying Areas Coverage over Time
1995-99
2005-06
2012-13
100%
40%
77%
Taxation
0%
13.33%
38.89%
Climate Change
0%
26.67%
33.33%
Other Env.
0%
26.67%
38.89%
Labour reg.
0%
13.33%
22.22%
Sector
8
Lobbying Areas Coverage by German and US Firms over Time
1995-99
2005-06
2012-13
1995-99
2005-06
2012-13
Sector
0%
20%
57.14%
Sector
100%
83.33%
90.91%
Taxation
0%
0%
14.29%
Taxation
0%
33.33%
54.55%
Climate
Change
0%
40%
57.14%
Climate
Change
0%
33.33%
18.18%
Other Env.
0%
40%
35.71%
Other Env.
0%
33.33%
40.91%
Labour reg.
0%
0%
21.43%
Labour reg.
0%
33.33%
22.73%
Germany
USA
9
5
4.5
4
3.5
3
Germany
2.5
USA
2
Aggregate
1.5
1
0.5
0
1995-99
2005-06
2012-13
Average Area Position Disclosure by German and US Firms over
Time
10
Findings
• A growing number of firms give an account of lobbying activity in their CSR
reports, indicating they consider (at least rhetorically) their public policy
influence to be a CSR issue.
• US firms appear to be more likely than German firms to report on their
lobbying activity especially in recent years.
• Level of transparency is growing yet remains limited. The majority of firms
are reluctant to report on the details, and particularly their position on
lobbying issues (or carefully select ‘safe’ issues).
• German firms are more likely to (rhetorically) align their account of
lobbying activity with relevant CSR issues than US firms.
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Findings
• German firms discuss their political activity as part of engaging in
stakeholder dialogue on CSR issues
Part of our stakeholder dialogue is also to participate actively in the political
process, where we become involved and present our positions and viewpoints –
either in direct dialogue with politicians or via our work with associations.
Merck KGaA (2013 – p. 20)
• US firms use CSR reports instrumentally for communicate their position
As a retailer, importer, health-care provider and employer of approximately
375,000 team members by the end of 2013, we play an important role in
informing policy makers about many legislative issues. We advocate at all levels of
government, with think tanks, NGOs and trade associations to ensure that the
impact legislative and regulatory issues have on our business, industry,
communities and team members is well understood.
Target (2013 – p. 95)
12