In a move that could be the epitome of deception and the Urban Dictionary’s definition of “two-faced,” a review by the Reuters news source of political donations made by 30 U. S. companies, all of whom had signed President Obama’s 2015 American Business Act on Climate Change Pledge, revealed that most of the companies had made donations which were contrary to the intentions of the act. Signatories to the act committed to enact climate-friendly corporate policies and to support climate change oversight. Obviously not all of them read what they were signing.
Donating to the campaigns of both parties in a political election year has been something of an industry standard for years. Companies consider issues such as regulatory and tax policies, and national security when they decide who they will support. Political Action Committees (PACs) will make the donations on behalf of the companies, a process which often is not widely publicized until there is a review by a third party.
Companies make their donations in this fashion so that they don’t have to reveal to their investors where they stand on the political road map, or to the public. Because there is not any oversight between a company’s political donations and their corporate social responsibility and environmental efforts, there is a grey area, or a loophole, for companies to potentially defraud investors and the public.
If climate doubters win the November 8th elections, companies who supported them may hedge their commitments on climate with little political or financial fallout.
This type of hedging is unfortunately all-too-common. In a study on sustainability published in Quality Digest, a magazine for quality control specialists, shortly after the 2010 Deepwater Horizons oil spill in the Gulf of Mexico, corporate secretaries at 50 U.S. organizations were surveyed. The report, “Sustainability in the Boardroom,” was released by The Conference Board and showed that there were significant issues in how corporate boards conducted oversight into their company environmental initiatives, and information on the effect of business operations on the environment was often unavailable from independent sources.
In August, the Securities and Exchange Commission (SEC) charged two executives and the California-based company, Enviro Board Corporation, that they work for with allegedly defrauding investors of approximately $6 million over four years. The executives, Glenn Camp and William Peiffer, invented financial projections for the company that had no real basis and other information to fund a manufacturing venture making environmentally-friendly materials for construction in houses and commercial projects.
Banking on their investors’ environmental concerns and beliefs, Enviro Board fabricated information depicting their manufacturing process as successful when in fact after almost 20 years they had been unable to make it productive or profitable.
With lawmakers, political parties, businesses, companies and the public focusing more and more on environmental issues, green living, recycling, and climate control it is becoming apparent that there needs to be additional oversight into what a company’s public stand is on environmental issues and what they are actually doing, and supporting. This is why more and more companies are taking part in business mentorship programs that help them focus on the importance of the role of sustainability in their operations.
Two years later in a speech given to the 18th International Public Relations Association (IPRA) World Congress in Beijing, Harold Burson stated that he was worried about a lack of understanding of corporate social responsibility. “The buying public no longer looks only to governments and well-financed foundations to solve major societal problems. Corporations are not only adapting themselves to fill this space but see it as a reputation and market-building opportunity. Going “green” is just one manifestation.”
Ten years ago there was a concern about the information companies were sharing within their own boardrooms about environmental sustainability. Eight years ago public relations representatives were expressing concern over corporate social responsibility and the public image the companies they represented had in regards to environmental concerns. While it appears that there was more awareness of the need for open communication between companies, board members and investors, little has been done for total transparency in political donations made by some of those same companies.
Two years after the Gulf oil spill, and Harold Burson’s concerns over corporate social responsibility, ExxonMobil made a pledge in response to reactions by shareholder activists to stop funding research and activist groups that promoted disinformation about climate change.
Yet in a July 2015 report in The Guardian revealed in financial and tax records that since 2007, Exxon had given $1.87 million to Republican Congressional lawmakers and $454,000 to the American Legislative Exchange Council, both groups who deny the threat of climate change and global warming.
For there to be true corporate social responsibility and accountability, there needs to be more government oversight and transparency in the reports published by corporations on their political contributions. The investors need to demand more information from corporations before contributing funds, and the public should have a right to question a company’s contributions, especially if it is not publicly traded.
Public relation companies should have their own set of corporate social responsibility standards that are more concerned with honest marketing than with hiding a company’s bad choices and conflicting decisions. Ultimately, the winner in all of this is not who makes the most money, but in a world that will be around for future generations.
Anum Yoon is a writer who is passionate about personal finance and sustainability. She often looks for ways she can incorporate money management with environmental awareness. You can read her updates on <a href="http://www.currentoncurrency.com>Current on Currency</a>.