Business and politics are a volatile mix so, for decades, big corporations were encouraged to stay out of politics. Critics—and there were many—pointed to historical examples such as the strong-arm tactics employed by the East India Company, the Anglo-Persian Oil Company (which later evolved into BP) in what is now Iran, the United Fruit Company in various "banana republics" or ITT in Chile, as evidence of how badly things can go wrong if corporate influence goes unbridled.
But something changed in 1995, when Shell came under fire over both the proposed marine disposal of the Brent Spar oil platform (or "buoy," as Shell would have it), and for its failure to stop the executions of Ken Saro-Wiwa and his colleagues in Nigeria.
Shell's defence was that, even if it had the influence with the Nigerian government that some imagined, it had been vigorously encouraged to remain apolitical. It seems that many of us want to have our cake and eat it: campaigners want companies to be politically active if they do and say the "right" thing.
Such areas of contention heat up considerably when the major democracies (particularly the US) head towards elections. Campaign finance is likely to gain more media attention with Al Gore's latest book spotlighting its often corrosive influence.
This is a minefield for business leaders. The central theme of SustainAbility's management brief, Coming in from the Cold: Public affairs and corporate responsibility, developed in partnership with Brussels-based Blueprint Partners and WWF-UK, is that we are moving from an era where the focus has been on the impacts of business to a period where there will be more interest in corporate influence.
But there is another dynamic at work. As market failures, and the need for systemic change in such areas as climate change, become key concerns for the money world, we see a trend for leading investors to look for, and single out, businesses that aim to protect future value by actively shaping public policy frameworks.
We began to turn up the heat six years ago as we became increasingly conscious of seismic tensions in this area. On the one hand, many companies were producing lavish corporate responsibility or "sustainability" reports, which we would benchmark and award high scores in our rating surveys. Companies became adept at discussing their values, goals and targets in ways that made them sound like latter-day saints. On the other hand, the same companies were paying lobbyists and industry federations to stall, or slow, government policies or laws designed to tackle the very challenges they claimed to care so much about.
As in the early 1970s and early 1990s, we are going through a period where business leaders feel the urge to share their views on major social issues, among them climate change, poverty and the risk of pandemics. IBM, long known as "Big Blue", has its Big Green initiative to help clients slash energy costs at their server farms; Wal-Mart plans to install solar energy at over 300 stores; Bank of America has pledged $20bn in sustainable projects over the next decade—and has just been trumped by Citigroup's own pledge of $50bn.
All welcome, clearly, but in a separate piece of work—part of which was summarised in the June issue of Director—we have distilled seven new rules as globalisation, and other forces, morph the business agenda. The seventh rule reflects the fact that these issues are increasingly both strategic (as Harvard Business School's Michael Porter now argues) and political. Business leaders need to stand up and be counted.
In the climate arena, we are seeing that happen with initiatives like the UK Corporate Leaders Group on Climate Change and the US Climate Action Partnership. It's time, in short, for leaders to lead on the major issues of our day, rather than comfortably tucking in behind the herd of would-be corporate citizens.
John Elkington is founder and chief entrepreneur at SustainAbility (www.sustainability.com) and blogs at www.johnelkington.com