In this pivotal global election year, many businesses may be considering the policies and regulations that a future government could bring, and how the business might influence those developments. For purpose-driven businesses, driving positive change is often embedded into the constitution. We seek to address social and environmental injustice and to support economic systems that are fairer for all. This naturally brings us to seek engagement and collaboration for change, not just with policy makers but with a range of stakeholders, such as consumers, employees, civil society and other businesses.

At a recent meeting of the Impact Counsels’ Forum, we convened senior lawyers from B Corps and other purpose-driven businesses to talk about what corporate advocacy means for them, and to explore the inherent opportunities and risks in ‘speaking out’. Opening the discussion, we heard from speakers including Charmian Love, Global Director of Advocacy at Natura & Co, Richard Roberts, Inquiry Lead at Volans, and Suhan Rajkumar, Senior Associate in Bates Wells’ Politics, Elections & Campaigning team. Inspired by this recent forum, we’ve distilled some of our thoughts on this topic.

How are businesses approaching corporate advocacy?

The chair of the Institute for Business Ethics, Prof. David Grayson CBE has described corporate advocacy as ‘speaking out and speaking up for sustainable development and social justice’. It’s becoming imperative for businesses to act on some social and environmental issues, such as in response to the mounting physical, transitional and legal risks associated with the climate emergency and biodiversity loss, and to respond to public/consumer opinion on such issues. Despite a pressure to act, businesses are not necessarily following through by actively calling for the changes we need. According to the Oxford-GlobeScan Global Corporate Affairs Survey 2023, 29% of Corporate Affairs professionals have a strong appetite for corporate advocacy, but only 18% of respondents’ organisations were actively involved in it.

There may be many reasons for this. Speaking out on certain issues can bring criticism or risk alienating those who stand on the ‘opposite side’ of the debate around an issue. Not spotting inconsistencies between what we say we stand for and the realities of our operations can open us to accusations of greenwashing. To be effective, we therefore need carefully considered advocacy strategies and to be aware of any potential pitfalls in our approach. This is particularly true for purpose-driven businesses, which are, arguably, subject to greater stakeholder scrutiny regarding the impact they have on society and the planet.

Building a strategy

The approach to advocacy must be tailored to the business and its unique circumstances. However, certain guiding principles can help a business to start evaluating its approach:

  • Being authentic: Corporate advocacy is an integrity issue for business; the positions we stand on must be authentic and honest, which comes from alignment with the business’ purpose. This means leaders should be accountable for actions that the business takes and appropriately open with internal and external stakeholders about the issues on which the business campaigns. If deterred by ESG-backlash, ask why the business is considering advocating on that particular issue; what does that issue mean for the business’ purpose? Ensuring that advocacy aligns with purpose should help the business to explain its approach if challenged over a particular activity or stance taken.
  • Identify value creation: Make the business case for advocacy, so leadership can buy in and ensure the work is properly supported. This means showing how advocacy connects to corporate objectives and creates value for the business. It might include calling for policies that further the long-term sustainability of the business model or that help level the playing field for purpose-driven business. For example, Tony’s Chocolonely aims to end exploitation in the cocoa supply chain and was recently in Brussels campaigning in favour of the EU’s Forced Labour Regulation and Corporate Sustainability Due Diligence Directive.  
  • Collaborate with your network: Much of a business’ influence is likely to be through its network, including any trade associations and membership bodies. Such participation should be monitored to ensure that those organisations’ activities are consistent with the business’ objectives. An interesting example of this can be found in Unilever’s recent Climate Policy Engagement Review. Consider whether the business’ trade associations go as far as it would like them to on issues like social mobility and climate justice. If not, can the business influence them, and their other members, to take action? Additionally, there may be parts of the network that would benefit from support and leadership from the business, using its influence to be an ally or create space to amplify the voices of those less powerful. For example, small businesses or communities at the frontlines of the business’ supply chain.
  • Take a systems-change approach: Regulation and policy change alone may not have much impact if the culture around an issue doesn’t also change; culture drives whether people follow the rules and act in the spirit of formal policies. To achieve both, people, whether as employees, consumers or members of the public, need to be informed about their own agency and how to channel it to create positive change. Corporate advocacy should engage with a range of stakeholders, empowering them to act within their own spheres of influence and support policy change to be meaningfully implemented.

Essential compliance – support from the legal team

The importance of the role of in-house counsel in corporate advocacy strategy cannot be overemphasised. The in-house lawyer can enable the business’ corporate advocacy goals by helping to manage risk and support a collaborative approach across business functions. Although this role goes beyond compliance, it’s still essential to adhere to all applicable regulation and this may require specialist input from the legal team. For example:

  • Public campaigning: In the run up to a general election, if a UK company is campaigning publicly on an issue that is political it may be required to register as a non-party campaigner and be subject to a detailed compliance and transparency regime – this covers any public-facing campaign which could be seen as intended to influence people to vote in a particular way. The threshold for triggering this requirement is low, and this obligation can arise in relation to issues that may not seem party-political. Generally, an overseas company will not be eligible to register and so cannot carry out this kind of activity.
  • Private advocacy and lobbying: If using the services of an external consultant (rather than in-house) lobbyist to engage with ministers or senior civil servants, this will be subject to requirements in England and Wales for that engagement to be registered with the Registrar of Consultant Lobbyists. While the registration burden is on the lobbyist, not the client, registration involves a certain amount of public transparency; businesses should consider whether they are comfortable with the world knowing about these arrangements (and be aware of the reputational risks of failure to comply).
  • Internal advocacy: Among any business’ internal stakeholders there will be a range of views on different issues. For purpose-driven businesses, taking a public position can be an important part of maintaining a values-led profile, but can also lead to internal misalignment or rifts. Managing this risk is partly a cultural question, but there may be important legal risks to consider. Where a business has spoken publicly on an issue that goes beyond its operations and value creation, it may be harder to justify its position and scrutiny may be higher. Careful management of an issue may be needed where beliefs are protected under the Equality Act 2010 (often on both sides). The best response is likely to be one that is thoughtful, informed by collaboration across business functions (e.g., HR, Comms, Legal, and the leadership team, etc.) and takes a respectful and balanced approach to the different views involved.

At Bates Wells, we work with purpose-driven businesses on their campaigning, lobbying and advocacy activities. Please get in touch if you’d like to discuss how your business could develop its corporate advocacy strategy.