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Corporate Political Transparency: The Green Business Rating We Really Need
Alex Steffen, 1 Apr 09

Much is made of various measurements of corporate progress towards sustainability: Company X has reduced its carbon footprint by 10 percent, Company Y has introduced a line of recycled products, Company Z will offer new and more efficient technology in 2012. But the reality is, there's one measurement that matters more than all of these put together, and it's almost never mentioned in the green business press: where a company spends its lobbying budget.

See, a huge number of companies make modest improvements in practices, but lobby all-out, in a variety of ways, to stall the adoption of higher standards, better land-use practices, green taxes or even health and safety regulations. And the impacts of those lobbying efforts usually far, far outweigh the good they claim to be doing with their pilot green efforts.

The most recent shocking report? Revelation of donations by companies that like to claim green leadership, including Microsoft, Toyota and Wal-Mart, to the ultra-anti-environmental Cato Institute, which recently launched an ad campaign targeting president Obama's climate policies, relying on climate skeptic deceptions. That's right, your Prius purchase may have helped fund an attack on climate action.

This is not an isolated incident. Take Wal-Mart. The big box giant has long been known in policy circles as one of the leading opponents to better land use and greener taxation policies (even carbon offset standards). It not only spends huge sums of money paying employees to influence all manner of decisions ($5.2 million in 2008 on formal in-house lobbying alone); it also spends heavily on lobbyists influencing local and state governments (for instance, it spent more than $200,000 for one fight in Massachusetts last year) and increasingly the Federal government (more than $4,000,000 spent hiring lobbyists in 2007). This doesn't even count the much greater amounts of money it spends indirectly, from expenditures on PR to support for industry groups, publications and anti-environmental think tanks which are not formally lobbyists. Wal-Mart is also one of the largest political donors in the U.S., with its PAC alone spending more than $3,000,000 in 2008. How many compact fluorescents would it need to sell to offset the miles and miles of suburban sprawl it's fought to make possible?

These practices are not only deceptive, they're harmful. They play on our erroneous sense of privatized responsibility to sell us "green" goods, while simultaneously opposing the very kind of systemic changes we need if we've going to avoid planetary collapse. And this is absolutely not just an American problem; indeed, in our globalized world, companies are quite cosmopolitan in their efforts to corrupt government progress towards sustainability wherever it threatens their outdated business models.

Now, the reality is that for every huge company engaged in duplicitous sell-the-CFL-and-lobby-for-the-sprawl practices, there is another company (often smaller) which engages wholly and fully in doing as much good business as it can. It's not true that being in business makes you bad. Being dishonest and fighting needed change while claiming to champion it is what makes yours a bad business.

We've written a lot about how the world needs a transparency revolution. Nowhere is that more true than the emerging field of green business.

We already have certification systems and other ways of making transparent the material backstories of specific products. We have all manner of rankings and ratings of sustainability practices (however deeply flawed). What we don't have is what we most need: an absolute measurement of political accountability.

Tools exist for doing that. Here in the U.S., the League of Conservation Voters offers an annual scorecard rating members of Congress' environmental performance, based on their votes on key issues. Transparency International follows international corporate corruption and bribery, and has evolved a set of standards for eliminating it. Others have developed great tools for quickly revealing the origins of political contributions and so on.

What we need is a standard for corporate political transparency and accountability that can be clearly reported and easily understood by those who are looking to buy an item, or invest in a stock -- a sort of transparency index. That way, you could know before supporting a company if it is a) forthcoming in its political practices and b) supportive of a few critical, well-understood bedrock political issues (like climate, smart growth, human rights).

I have little doubt that such a rating system would have an outsized impact quickly (It doesn't take too many people saying "Hmmm. I was going to buy a Prius, but Toyota's Transparency Index Rating is only 25 percent; guess I'll get the Aptera after all," before it makes more sense for Toyota to stop contributing to Cato than continue). I don't know of such a system, but it sure seems like the parts to build it exist.

What might such a system look like? What would be the challenges in designing and releasing it? How could it be made most effective?

I'd like to hear your ideas.

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Actually, what is needed is a green index of various lobbyists and think-tanks like Cato. We have indexes of elected officials, but not the crowd that surrounds them. This list then will be informative not only to consumers, but to decision-makers within the corporations. That's who really needs to feel the pressure anyway, not Joe Prius.

Also, there needs to be a green version of Media Matters. Simply to collect and annotate anti-enviro whoppers in media, and who said them. This information is then used to feed the think-tank index.

Both organizations then feed their own media narratives, simply by existing and being reputable, citable sources who are willing to talk on the teevee.

It's a lot of work. Get to it, ye bloggers!

Posted by: Enoch Root on 1 Apr 09

How about an augmented reality app for phones that gives your "Transparency Index Rating". You can take a picture of a bar code and get back a report on the product and company.

Posted by: Rahein on 1 Apr 09

Alex, this is clearly a big part of the dumbed down distorted values, ethics and moral codes that have a virus like hold on global society today HIV meets Affluenza, easy to catch virtually impossible to eradicate. To be fair its not new is it as we all have and believe our own agendas and subscribe to the rule of thumb saying 'They who pay the piper call the tune'. Dan Ariely's behavioural economics research into cheating (aka stealing) highlights that though we personally draw the line at stealing or cheating hard currency (coins, notes) we have little if no difficulty in non-monetary cheating. He highlights in his book Predicatablly Irrational that 'career theft' in the USA in 2004 from robberies amounted to $525 million and the estimate for employee theft and fraud at the workplace is around $600 billion dollars. So, does it hurt if we inflate an insurance claim a bit or tweak our business expenses a tad? and more relevantly to your article if the funder/law maker/regulator would like to see a tick in the ecobox then you will find the least expensive way of putting the badge on, job done, show me the money!

Posted by: Harrison Embrey on 2 Apr 09

Alex, this is a really good piece. Greater transparency in the political process is the sunlight that will disinfect the whole bloated, corrupt culture of corporate control of government and society. I've linked to this on APEsphere.

Posted by: AP Newton on 2 Apr 09

Well, is a good step in the right direction. Really what we need is the raw data made available in real time (who's money, to whom, which legislators met which lobbyists, and when, etc). Then building the tools to make the economy of influence transparent is (relatively) easy.

Posted by: Zane Selvans on 2 Apr 09

Mobile communications are definitely the way to do this, for insight into the possibilities of using them to communicate the truth please follow this link . I would like this to be a truly global service though, as I have always been interested in the real truth behind such issues as working conditions and environmental controls across all the usual suspect sectors. Big job but the internet and mobile communications proves that borders or rights to information flow can be eliminated.

Posted by: Harrison Embrey on 3 Apr 09

Esther Dyson asks, Can Transparency Be a Business Model?

"What needs to happen? First, someone needs to take on this project, with all the challenges of technology, leadership, partnership, marketing, etc. And did I mention that it needs a business model?"

Posted by: Critt Jarvis on 6 Apr 09

Great piece, although I believe accessibility of company environmental/ social/ governmental (lobbying…relates to ESG) info is another issue that needs to be addressed. While it is certainly true that identifying lobbying dollars will go a long way in understanding corporation’s intentions, it is only one piece of the puzzle. Other reporting initiatives like Ceres Global Reporting Initiative (GRI) create a standardized disclosure of environmental and social performance and principles, although these reports are not accessible to your average consumer.

It is certainly true that holding large corporations like Wal-Mart and Toyota accountable for their ESG impacts is critical. Although if academics and eco-bloggers are the only ones to read it, most consumers will continue to ignore the white noise from the aforementioned communities and buy.

We need a clearinghouse, accessible to average consumers, disclosing the environmental, social and yes—lobbying data for large companies. As demonstrated by the success of Barack Obama, power is best implemented from the bottom-up—i.e. grassroots. I hope this discussion can further stress the need for the same to happen in the world of consumerism.

P.S. LCV is a great example in the political world. They have a very clear position on most issues and they simply score local and nat. politicians from 1-100 based on their voting record. Maybe we need a trusted three tier score card for F500s? Stamp it on grocery store shelves next to the price per ounce sticker...

Posted by: Cramer on 7 Apr 09

"How about an augmented reality app for phones that gives your "Transparency Index Rating". You can take a picture of a bar code and get back a report on the product and company."

Systems like Bar Code Busters and the (more complete and comprehensive) Consumerium project describe exactly how to do this, once you agree on how to get to the rating. The problem is that there'll be many such ratings and some of them purely put-up jobs from industry. Greenpeace and Adbusters proposed using bar codes to look up product characteristics in 2000 but the real problems are in how to make ratings reliable and lawsuit-proof.

Posted by: trolls for transparency on 11 Apr 09

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