CSR Needs CPR: Corporate Sustainability and Politics

Abstract : Corporate social responsibility has gone mainstream, and many companies have taken meaningful steps towards a more sustainable future. Yet global environmental indicators continue to worsen, and individual corporate efforts may be hitting the point of diminishing returns. Voluntary action by the private sector is not a panacea-regulatory action by the public sector remains necessary. Such public sector progress will be more likely if it is supported by influential segments of the business community. Recent court rulings in the U.S. make it easy for companies to hide their political activities from the public, yet the indicators of CSR used by ratings agencies and socially responsible investment funds mostly ignore corporate political action. We argue that it is time for CSR metrics to be expanded to critically assess and evaluate firms based on the sustainability impacts of their public policy positions. To enable such assessments, firms need to become as transparent about their political activity as many have become about their CSR efforts, and CSR rating services and ethical investment funds need to demand such information from firms and include an assessment of corporate political activity in their ratings. † We thank the Albert and Elaine Borchard Foundation for their generous financial support.