Increasingly, business leaders are stepping forward to help solve the crises facing society. The intersecting catastrophes of 2020 highlight the need for well-functioning institutions and an economy where financial performance translates into long-term human well-being. In response, companies have made bold commitments to support positive systemic change, focusing largely on voluntary measures such as internal people practices, supply chain policies, charitable contributions, community outreach and public communications.
Though many companies paused their political contributions following the January 6 Capitol attacks, most firms have not fully integrated “corporate political responsibility” (CPR) into their strategies for acting on these commitments. Every systemic issue depends on sensible, stable public policy and business is being called to support Sustainable Development Goals 16 and 17 (including effective, accountable and inclusive institutions and partnership). In addition, leaders are being challenged to ensure their corporate political activities (CPA) are not part of the problem, as business account for roughly 62% of all political contributions and 87% of disclosed federal lobbying expenditures.
Unfortunately, many executives operate without an integrated view of their firms’ engagement with governing or electoral processes, or clear principles to ensure transparency, accountability and responsibility. As we have seen in 2020, in an environment of polarization and distrust, inattention to CPR can increase reputational risk, destabilize the civic and business environment, threaten the credibility of other efforts and undermine the positive systemic changes society needs.