Lobbying for Good
Peterson, Kyle, Pfitzer, Marc, Stanford Social Innovation Review
In their efforts to be socially responsible, most companies fail to wield their most powerful tool: lobbying. Yet a few corporations-from Mary Kay, to Royal Dutch Shell, to General Motors-are increasingly leveraging their deep pockets, government contacts, and persuasive prowess for the cause of good. Not all kinds of socially responsible lobbying are created equal, however. The authors discuss which forms are best for companies and for society.
? June 15, 2005, six Mary Kay independent national sales directors drove their pink Cadillacs up to the U.S. Capitol. Congress was discussing whether to reauthorize the Violence Against Women Act, and the saleswomen spoke to legislators about the importance of renewing it. Since the 1980s, Mary Kay Inc. had worked to stem violence against women. Not content with just making donations, the company set its sights on a much bigger prize: advocating more than $500 million in additional federal funds to combat domestic violence, sexual assault, and stalking. In addition to teaching its independent sales force about the issue, the company educated legislators about domestic violence through its government relations department. Combined with the advocacy of dozens of other groups, Mary Kay's efforts paid off: President George W. Bush signed the reauthorization into law in January 2006.
Mary Kay's Cadillac sally aside, much corporate lobbying has a poor reputation, particularly among nonprofits that battle corporations over environmental, health, and consumer fairness legislation. Even corporations with kinder, greener practices sometimes support legislation that directly contradicts their socially responsible image. For example, Toyota, creator of the eco-friendlier Prius, joined other carmakers to lobby against tougher fuel economy standards in the United States, according to an article in the January 17, 2008, issue of The Economist.
All this influence doesn't come cheap. In 2006 alone, U.S. companies spent a record $2.6 billion on federal lobbying, according to CQ MoneyLine, a lobbying tracking service. Meanwhile, for the entire period from 1998 to 2004, nonprofit organizations spent only $222 million on federal lobbying, reports the Center for Public Integrity. Likewise, in Europe, companies spend between euro750 million and euro1 billion ($1.1 billion to $1.4 billion) annually to lobby the European Union, according to ActionAid International. Seventy percent of these European lobbyists represent a business interest, whereas only 10 percent work for social issues. These vast quantities of money-both in the United States and Europe-flow with little public accountability, note two British research organizations, SustainAbility and AccountAbility.
Yet corporate advocacy need not always be self-interested. Some companies, such as Mary Kay, are using their face time with lawmakers to lobby for good. Traditionally, nonprofits promoted social issues in the halls of power. But corporations, with their carefully cultivated connections, wider lobbying leeway, and proficiency in influence, are often better equipped to make the case for stopping domestic violence, improving safety on the roads, thwarting climate change, and fostering economic development-to name just a few social change efforts.
Accordingly, some companies are steering government dollars to social problems, changing laws, and encouraging new approaches to government services. At the same time, some nonprofits are finding that the fastest path to the heart of legislation may be through corporate partners with political clout. Sometimes corporations send an army ofblue-suited lobbyists; other times all that is needed to turn the tide on an issue is a simple letter, phone call, or voice on a committee.
Not all corporations lobby for good in the same ways, however. Drawing on our consulting experience with dozens of global companies in the United States and Europe, we lay out three different targets of lobbying for good: generic social issues, which are critical to society but not immediately consequential to a company's business; value chain social impacts, which are the footprints a company leaves behind through its normal operations; and social dimensions of competitive context, which are the external conditions (e. …