The Pitfalls of Aligning CSR Goals with Public Policy Work

The Pitfalls of Aligning CSR Goals with Public Policy Work

Can a company take on sustainability initiatives -- and promote their green credentials -- while also lobbying behind the scenes to halt, slow or weaken environmental legislation?

That was the dilemma faced by members of the U.S. Chamber of Commerce in 2009: Companies working toward smaller carbon footprints found themselves under scrutiny for their membership in the business lobbying group, which opposed the climate legislation then working its way through Congress.

A bill ultimately failed to pass the Senate and the hubbub largely disappeared, but the example illustrates the tightrope companies must walk to balance lobbying efforts with CSR initiatives. The situation forced some like Pacific Gas and Electric Company (PG&E) to take a hard look at whether the groups with which they were associated shared the same values.

"We decided to take a step back and say at this time, our association with the Chamber was not aligned on such an important issue," Melissa Lavinson, PG&E's director of federal environmental affairs and corporate social responsibility, said during a workshop at the 2011 Ceres Conference in Oakland this week. "We thought we should just part ways at that point and reassess at another time." Ceres badge

Lavinson and other business leaders explored the dilemma and challenges of aligning their corporate social responsibility stances with public policy or lobbying efforts. It comes down to companies backing up their green talk with action -- or fear the potential backlash.

A couple of recent cases in point:

• Environmental groups called out American Airlines and United on Wednesday for promoting their environmental records during Earth Day last month while also suing to block the European Union for holding "all airlines accountable for their global warming pollution resulting from flights to, from and within the European Union." The companies are reportedly lobbying U.S. government to rule the law invalid. 

• American Electric Power scored kudos this week, earning a first runner-up nod for its most recent CSR report in the Ceres-ACCA North American Awards for Sustainability Reporting. The company also received flak for its efforts to stall some EPA emissions regulations, prompting a new ominous-sounding campaign by several environmental groups, who are asking the power generator "to publicly name the number of lives it wants Congress to sacrifice to give AEP and other polluters delays and rollbacks of national limits on toxic air pollution."

But it isn't always easy to align sustainability and public policy positions, especially when you consider a company like VF Corporation, a diverse apparel company whose brands run the gamut from The North Face and Jansport to 7 Jeans and John Varvatos. The North Face has been an active player in sustainability for many years, but its approach may not effectively apply to VF's other brands, which have diverging interests and customer bases.

"We're looking at what it actually means for this $8 billion company to actually become more sustainable," said Letitia Webster, VF Brands' director of corporate sustainability. "That's really the business challenge when you think about policy and policy changes, is how do you find the common denominator that we can all rally around as a company, and then we can actually communicate and address policy that makes sense for our business." 

Even if a company does wade into the public policy arena, its actions may be misunderstood or misconstrued. EMC, for example, had concerns with elements of an electronics waste bill in New York City that the company felt were unimplementable, such as pick-up at residences, which some took to mean the industry resisted e-waste management programs in general.

"I had people say this: 'Oh, so your industry wants to send waste scrap overseas to poison children?'" said Kathrin Winkler, EMC's vice president and chief sustainability officer. "No, not really. We'd like to implement it in a way where we have good oversight of it and we're not spending more of our investors' dollars in doing it ... We're constantly getting caught in the you-better-back-something-you-really-don't-like, or else we're going to attack the company."

Another challenge for some companies to align public policy and sustainability goals, interestingly, is an apparent lack of concern. In other words, companies may not feel the need to take a stance or promote their sustainability efforts if stakeholders aren't clamoring for it.

"One of the big barriers is the demand for it from stakeholder constituents, really our customers, consumers and our shareholders," said Webster of VF Corporation. "Frankly, we're not getting asked. Our CFO, our board of directors are not getting asked by shareholders what we're doing around sustainability and why we're not promoting policies."

Rob McGarrah, counsel of the AFL-CIO Office of Investment, agreed.

"Virtually every company we've begun these dialogues with has said, 'You know, we just didn't even know our shareholders cared about this issue."

Or, maybe just a small slice of investors care -- perhaps the same investors.

"The more it's the same investors saying it," Winkler said, "I think the less it gets heard."

As the old saying goes, sometimes you're damned if you do and damned if you don't. A great example: Winkler remembers receiving a very angry shareholder letter asking why EMC hadn't withdrawn from the U.S. Chamber of Commerce during the bitter climate change debate in Congress.

"I find it an amusing anecdote because the reason, which I put delicately in the letter," Winkler recounted, "was that we were not members of the U.S. Chamber of Commerce."

Image CC licensed by Flickr user Allie_Caulfield.