Government Relations

Overview

Today’s most forward-thinking business leaders understand the scale and complexity of sustainability challenges. They realize that no one company can solve many of the sustainability issues we face today. Public policy is an essential component of the transition to a more sustainable economy. To make a positive difference for people and the planet without sacrificing economic stability, it is important for industry to participate in public policy discussions.

Approaches to appropriate, transparent government relations that are common today include:

• Building collaborative relationships among industry stakeholders, associations, NGOs, and government leaders.
• Contributing expertise where it bears on an issue of public concern.
• Joining trade associations and others organizations to participate indirectly through representatives.

Engaging in advocacy by sharing knowledge with government officials helps shape effective public policy. When transparent and ethical, these strategic relationships can have a positive influence on public policy for the benefit of both businesses and the general public. Good government relations and advocacy promote laws and regulation that encourage responsible economic growth and innovation across the triple bottom line.

Resources

• Organizing the government affairs function for impact

Advocacy

Business leaders have an important role to play in shaping conversations about public policy issues related to sustainability. When conducted transparently and consistently, advocacy from the business community enhances the public policy decision-making process with knowledge and expertise. Advocacy can lead to strategic relationships between the private and public sectors that benefit both businesses and the general public. Secretive advocacy in contradiction to a company’s publicly stated sustainability positions can create significant reputation issues upon discovery.

Political contributions

Making political contributions can have plusses and minuses for a business. Beyond the obvious need to comply with laws regulating corporate contributions, companies must consider whether political contributions are appropriate or risky in a business context. Making contributions to organizations engaged in political activities or advocacy can be an effective component of participating in the public policy process. The question is whether an organization’s contributions are transparent and a true reflection of the organization’s values and purpose. Significant risk exists when political contributions are not aligned with public-facing statements about business goals, stakeholder engagement, and marketing.

Tax strategy

Law & regulation

If society were able to self regulate to avoid all negative environmental, social, and economic impacts, we would never experience a Tragedy of the Commons. Protection of the best interests of human civilization and the planet often falls to governments. Governments have long used regulations and laws to protect shared resources.

Governments use law and regulation to cope with big environmental, social, and economic problems like climate change, poverty, and potential market failures. As these types of problems become worse, society mounts pressure on governments to solve them. This can create regulatory uncertainty for the business community.

Businesses must deal with these uncertainties as best they can. Keeping abreast of these situations helps prepare for impositions and protect the interests of stakeholders. Businesses do well to analyze, anticipate, and adapt to changing regulatory and legal circumstances.

Sustainability provides a broad context for preparing for and responding to regulatory and legal changes. It allows an organization to get a fuller picture of future trends that may impact business operations. Preparing for new regulations positions businesses to turn sustainability risks into opportunities. Preparing for and responding early to emerging laws, regulations, risks, and public expectations helps an organization:

• Avoid fines and shutdowns for non-compliance
• Build trust and cooperation with legislators and regulators
• Achieve performance objectives
• Get buy in for sustainability initiatives
• Create a competitive advantage
• Protect reputation and brand
• Create long-term value

Sustainability management reveals how social, environmental, and economic challenges might give rise to laws and regulation that affect businesses. This sets the stage for coming together with diverse stakeholders to work towards solutions in an orderly process. Customers and investors will be more supportive and loyal to companies that communicate, prepare for, and mitigate emerging legal and regulatory risks.

Staying ahead of the curve

Many regulated industries have been particularly vulnerable to legal and regulatory changes in recent years. These include the healthcare, financial, telecommunications, and energy sectors. Many businesses in these industries have learned that it is better to prepare early by self-regulating than to wait until the changes occur.

Laws and regulations are always evolving as new data and information becomes available. An organization can stay one step ahead of the compliance and regulation curve by accounting for environmental, social, and economic impacts and risks.

For example, a company that anticipates the impacts of expected carbon regulation can start self-regulating. It can devise its own ways of diminishing carbon in its business operations and supply chain on a longer, less painful compliance timetable. It can optimize its change process.

Government relations basics

Lobbying. The term conjures up images of secret meetings, influence peddling, and hidden deals driven by self-interest. All too often, these clichés ring true. But decades of scandals and resulting public education have led to an improved landscape. Today, relations between industry representatives and government officials are subject to regulation and scrutiny.

That is not to say that engaging with government officials is bad. To the contrary, public policy is best when informed by open, robust, and varied discussion with a focus on achieving what is good for society.

Business has a role to play

Business leaders recognize the value of engaging in conversations about important public issues. Public policy shapes opportunities and addresses risks that affect business.

Industry perspectives are an important component of measured and responsible change. It’s a win-win result when open public discussion leads to solutions in the public interest that also support core business objectives or provide opportunities for businesses to transition to a new reality.