Inequality in political influence is exacerbating inequality in society.

Progress on inequality, climate change and many of the other Sustainable Development Goals (SDGs) are painfully slow or headed in the wrong direction. Despite 64 countries (plus the European Union) holding elections in 2024, threats to the proper functioning of civic institutions and governments are increasing. Businesses are operating in an increasingly challenging environment, where the gap between their rhetoric and the reality on their value to society is generally large and widening, political and economic stability is under pressure, and the ability of governments to tackle market failures and systemic issues is undermined.

While the private sector’s perspective is useful in developing and shaping policy, business is playing an outsized role in the process The following factors create an inherent risk of corporate policy capture, affecting the ability of governments to operate in the public interest:

• When businesses dominate the policymaking process.  In 1992, more than 55 business representatives lobbied U.N. negotiators drafting a global warming treaty to be signed in Rio. Yet by 2023, at least 2,456 fossil fuel lobbyists were given official access to the COP28 summit in Dubai, including at least 166 industry trade groups, think tanks and public relations agencies with track records in climate denialism and misleading the public.
• When companies mostly prioritize short-term financial interests. In 2018, Oxfam published Dollars and Sense: Corporate responsibility in the era of Trump. This compared the stated policies, values and public messaging of the largest US corporations with their actual lobbying activities. It found that while many companies publicly affirmed support for addressing climate change and core values of diversity and inclusion, most of the companies assessed invested little in lobbying on these issues. At the same time, we found that companies did not publicly speak of tax policy or have any tax policy commitments, but many expended significant resources to successfully push for massive corporate tax cuts.
• When there is minimal transparency from businesses or government. Voluntary disclosures from companies, including in response to existing reporting frameworks and benchmarks, ‘remain poor and strategically selective.’

A range of practices undertaken by businesses across lobbying (such as misalignment between sustainability commitments and lobbying priorities), advocacy (for example casting doubt on independent scientific studies) and political spending (such as “astroturfing”)can exacerbate this risk.

Toward a New Approach

A new briefing for business from Oxfam, Right-sizing Corporate Voice, provides a roadmap for companies to redesign their political engagement and help tackle these challenges. Putting risks to people, the environment and the political systems that businesses rely on at the heart of their political engagement would also enable alignment with long-term value and a company’s social and environmental commitments.

While taking a new approach to political engagement might feel challenging, businesses have done something similar before. More than a decade after the United Nations adopted the UN Guiding Principles on Business and Human Rights, an increasing number of companies have begun to apply human rights due diligence to assess risks, take action, integrate human rights across their business, track progress and communicate both their approach and the results. The principles provide an adaptable model for corporate political engagement.

Oxfam’s report sets out key actions that businesses should take to make this a reality and embedding political engagement in their human rights due diligence approach.

• Assess: Understand your current political engagement practices and their impacts
  • Map your current political footprint
  • Assess your political engagement through a human rights and environmental sustainability lens
• Act and Integrate: Take actions to integrate responsible political engagement in your business and third parties
  • Change practices and processes to minimize the risk of policy capture
  • Develop policy positions on your salient human rights and environmental issues to drive positive outcomes
  • Ensure that political engagement by trade associations and business partners is aligned to your human rights and environmental commitments, and use leverage to influence others
• Communicate: Be transparent about your approach and progress, and promote responsible political engagement to others
  • Publicly disclose political engagement so that stakeholders can assess your approach, priorities and impact
  • Engage with the debate and positively contribute to the development of responsible corporate political engagement

By adopting the approach set out in the report, companies can help deliver better policy outcomes that tackle inequality, including racial and gender inequality, align political engagement with the company’s stated purpose, values and commitments, reduce reputational, financial and other risks linked to corruption and impropriety, and contribute to a stable and political economic environment by not undermining government institutions or civic space.

Read the full briefing for business, Right-sizing Corporate Voice.