CSR Needs CPR: Corporate Sustainability and Politics

25 Pages Posted: 7 Aug 2018

See all articles by Thomas P. Lyon

Thomas P. Lyon

University of Michigan, Stephen M. Ross School of Business

Magali A. Delmas

University of California, Los Angeles (UCLA)

John W. Maxwell

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy; Indiana University, Department of Economics; Richard Ivey School of Business

Pratima (Tima) Bansal

University of Western Ontario - Richard Ivey School of Business

Mireille Chiroleu-Assouline

Paris School of Economics (PSE)

Patricia Crifo

Ecole Polytechnique, Paris - Laboratoire d'Econometrie; Université Paris X Nanterre - Department of Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Rodolphe Durand

HEC Paris - Strategy & Business Policy

Jean-Pascal Gond

Cass Business School

Andrew A. King

Tuck School of Business at Dartmouth

Michael Lenox

University of Virginia - Darden School of Business

Michael W. Toffel

Harvard Business School

David J. Vogel

University of California, Berkeley - Haas School of Business; University of California, Berkeley - Business & Public Policy Group

Frank Wijen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Date Written: July 18, 2018

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.

Keywords: Corporate Social Responsibility, Lobbying, Greenwashing, Corporate Sustainability, Corporate Political Responsibility

JEL Classification: M, M14, M48, Q, Q01

Suggested Citation

Lyon, Thomas P. and Delmas, Magali A. and Maxwell, John W. and Bansal, Pratima and Chiroleu-Assouline, Mireille and Crifo, Patricia and Durand, Rodolphe and Gond, Jean-Pascal and King, Andrew A. and Lenox, Michael and Toffel, Michael W. and Vogel, David J. and Wijen, Frank, CSR Needs CPR: Corporate Sustainability and Politics (July 18, 2018). California Management Review, Forthcoming; Kelley School of Business Research Paper No. 18-65; Tuck School of Business Working Paper No. 3216142. Available at SSRN: https://ssrn.com/abstract=3216142

Thomas P. Lyon

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-615-1639 (Phone)

Magali A. Delmas (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

John W. Maxwell

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Department of Business Economics and Public Policy
Kelley School of Business, Indiana University
Bloomington, IN 47405
United States
812-855 9219 (Phone)
812-855 3354 (Fax)

HOME PAGE: http://johnwmaxwell.com

Indiana University, Department of Economics ( email )

Wiley Hall
Bloomington, IN
United States

Richard Ivey School of Business ( email )

The University of Western Ontario
1151 Richmond Street North
London, Ontario N6A3K7
Canada
5198502439 (Phone)
5198502306 (Fax)

Pratima Bansal

University of Western Ontario - Richard Ivey School of Business ( email )

London, Ontario
Canada

Mireille Chiroleu-Assouline

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Patricia Crifo

Ecole Polytechnique, Paris - Laboratoire d'Econometrie ( email )

Route de Saclay
Palaiseau, 91128
France

Université Paris X Nanterre - Department of Economics

Nanterre Cedex, 92001
France

Center for Interuniversity Research and Analysis on Organization (CIRANO)

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

Rodolphe Durand

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Jean-Pascal Gond

Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Andrew A. King

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States

Michael Lenox

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://faculty.darden.virginia.edu/LenoxM/index.htm

Michael W. Toffel

Harvard Business School ( email )

Boston, MA 02163
United States
617.384.8043 (Phone)

David J. Vogel

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

University of California, Berkeley - Business & Public Policy Group ( email )

545 Student Services Building
Berkeley, CA 94720
United States
(510) 642-5294 (Phone)

Frank Wijen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

Burg. Oudlaan 50
Room T07-38
3000 DR Rotterdam, 3000 DR
Netherlands
31 10 4081985 (Phone)

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