How can a large company become involved, ethically, in global politics?


This is probably the most fundamental question facing really large companies in the next twenty years.

At least, those large companies with a commitment to ethics and sustainability.

Which, among the really big ones, is most of them.

In the last fifteen years we've seen many large businesses begin to dip their toes in the political waters. 

This has almost always, understandably, been through collective action.

The first couple of these were probably initiatives such as the Extractive Industry Transparency Initiative (EITI) and the Kimberly Process, amongst others.

These two became specifically involved in politics, unlike some of the other issue or industry based groups, such the Ethical Trading Initiative or International Cocoa Initiative, to name a couple. 

Their engagement has been more with companies, communities, and NGOs, with the odd political foray.

They have had a predictably slow and uneven passage, but EITI in particular, seem to be making steady political inroads with regard to the challenge of revenue transparency, extractive firms and richer and emerging market states.

Much more recently, issue/sector agreements such as the 2013 Accord on Fire and Building Safety in Bangladesh are bringing garment retailers into a political space they have little experience of, if they want to drive real progress. (The alternative is to create a few islands of factory sourcing excellence whilst neighbours occasionally burn and collapse around these, which won't work for campaigners or consumers)

Looking more broadly, the other two groups that stand out for me are the WBCSD and the WEF.

To break down the acronyms a little, these are the World Business for Sustainable Development and the World Economic Forum (WEF)

(One might try and add the UN Global Compact in here, but for me they are too unfocused and poorly governed to be effective beyond their regional networks, which do a good, if limited job

These two, the WBCSD and the WEF, have attempted to drive sustainability and corporate responsibility hard onto government agendas through the collective power of their assembled brands and the reports that are then produced. (Vision 2050 by WBCSD in particular)

These efforts, whilst laudable, have had limited impact.

Governments, dominated either by popular unrest and falling growth, or the short term nature of democratic cycles, (often both) struggle to focus on calls for action by 2020 or 2050.

So what's to be done? To discuss that we have to accept a few things, namely:

1) Big business cannot be on the path to increased sustainability without having a holistic plan without major issue gaps (Unilever, Sainsbury's, Coca-Cola Enterprises, PepsiCo, Puma/PPR etc. etc.)

2) These plans cannot be realised without cross-industry action and collaboration

3) That collaboration can only have limited impact without political changes (incentives, regulation and enforcement, name and shame etc.)

4) That political changes are inevitably short term and based predominantly on self-interest by political parties or dictator-style systems

5) Given 4) - Governments will not change incentive or regulatory systems significantly on their own and do not have the resources, talent or time to think through what these change may look like and how they will be enforced and affect the electorate

So if we accept all this: How can a large company become involved, ethically in global politics?

I say global because the issues (sourcing, corruption, deforestation, climate, bad bureaucracy, dumb incentives, outdated systems) are global. So are the companies. That's obvious.

What can you do, as a large company, to help contribute to systems change that tackles these challenges?

This is the toughest question facing CEOs such as Paul Polman at Unilever or Indra Nooyi at PepsiCo, when they have time to think about it.

Here are a few ideas for companies who want to engage in this most difficult of questions:

1.     First, build a proper global policy and research team. Fund them and keep them, let them educate themselves, and your management team, on the issues, materiality and possibly, issue by issue solutions 
2.     Develop defensible (first) and ambitious positions on issues. That might be water policy or labour standards enforcement. The positions of course are first governed by materiality, secondly by global significance for your business and your stakeholders
3.     Look again at point 2 above. How ambitious are you being? If your company is to meet ambitious targets you need to engage beyond your own company and even your own value chain
4.      Push hard at the forums and associations where your company is a member so that they are at the top of their game, or closer to it, rather than, like an infantry unit, marching at the pace of the slowest member. If they can't speed up, leave, publicly and/or create a leadership group
5.     Advocate systems change on easier win issues first. Where is the low hanging fruit which you and your fellow companies can push on via your industry or issue body? How far can you go, and what can you expect to gain, and by when? Do you start regionally with like-minded companies? Maybe, as long as the ambition to go further exists, that's fine
6.     Do not donate to political parties anywhere. Demand that your suppliers do not either. You can't stop employees donating, but make it clear that's on their own time
7.     Take a public position that corporate political donations are wrong. But acknowledge that governments desperately need skilled help. Switching lobbyists back and forth into government (as happens in the UK) does not help build the capacity that's needed. Think harder. For example BP funds the Oxford Centre for the Analysis of Resource Rich Economies. What can your company - or industry - do that helps contribute to long lasting capacity building for better decisions?
8.     Be transparent about dealings, financial or otherwise with government. It may cost you a contract or two, but the long term impacts are worth the trade-off. Not all conversations need to be on the record though, and acknowledgment that some are off the record and when, is a tough balance
9.     Take criticism on the chin. Many people hate the idea of large companies having a position on anything. The argument that "there's no such thing as business ethics, only the ethics of individual business people" still holds much sway. Having a long term position is something that's very new for a company, particularly given that long term position, as part of a sustainability plan, must be seen to withstand several leadership transfers
10.  Hire lawyers (there's two words I thought I'd never write) to make sure you are not falling afoul of anti-cartel regulations when you negotiate with peers and competitors on pre-competitive issues (supply chain basic standards, climate change, corruption etc.) If that competition law is the problem: what can your policy team - and other stakeholders and companies - suggest needs to be amended about it to drive progress?
11.  Find existing and new progressive organisations to support and challenge them to go further, faster. For example the Institute for Human Rights and Business is becoming more vocal and practical (look at their work on Burma) and need long-term support
12.  Make it clear to investors that this part of strategy, and educate them as to why careful, long term engagement in progressive, collaborative and multi-stakeholder driven systems change is vital to future success
13.  Always think collaboration. The term may have negative overtones in some cultures so rename it if you have to. Do remember that very few companies, if any, changed much of anything on their own. We all love our icon stories about the Body Shop or Ben and Jerry's, but the reality is that leadership companies, possibly with exceptions of Patagonia and Interface (then not now) have always achieved more in partnership than alone
14. Institutions and social capital matter more than you know. These two areas are not well understood. The first is how fundamental governance happens on a day to day basis, the second is how people feel about that, at any one time, and their level of trust as a result. In emerging markets institutions are almost always weak. Most business/NGO CR partnerships do not yet aim to address the fundamental capacity, resource and design challenges of institutional development and longevity. This must change. Look at Bangladesh as an example.

I did suggest at the beginning of this piece that the challenge is the biggest one facing sustainably-minded large companies in the next twenty years and beyond.

There are only a handful of companies thinking part-time about the above.

Many of my suggestions may be naive, ill-judged or simply mistaken, but one thing I can guarantee you is that many more companies will soon start to think about the title question than are today.

The question is when, exactly. 

(Here's a new interactive resource that might be useful, take a look)
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