500 Multinationals act on global warming

Opposite view to HP and Ford: Interestingly and coincidentally, on 9 June 2005, 24 large multinationals, including U.S. firms Hewlett-Packard and Ford, issued a statement in which they supported climate change measures, and pressured the G8 to adopt climate stabilization targets and set up a long-term, global climate change regime that would extend to 2030 at least, including a market-based system of emissions trading (World Economic Forum, 2005).

Studying political strategy: Using Hillman and Hitt’s (1999) process model as far as applicable, and adding an international dimension to this because of the focus on climate change, the following study conceptualises political strategy formulation as a sequence of decisions with regard to the approach to political strategy, the participation level, and the type of strategy.

Corporations focus on short term: The approach to political strategy entailed whether corporate political activity took place on an issue-by-issue basis focusing on the short term (a transactional approach), or looked at the long term as well by building lasting relationships with political actors (a relational approach). As climate change formed one of many issues for MNCs, these firms ostensibly followed a transactional approach as illustrated by the continually changing positions of oil multinationals over the last decade (Levy & Kolk, 2002).

Collective action common: Firms had the choice to engage in political activities either individually or collectively. It has been observed that the climate change issue induced many firms to act collectively and cooperate with governments, nongovernmental organizations (NGOs), or other firms (Kolk & Pinkse, 2004).

Influencing policy through money and information: Firms also have options for the type of political strategy to pursue: an information, financial incentive, or constituency building strategy. With an information strategy, firms chose to provide policy makers with specific information about their view on public policy. Well-known tactics included lobbying and using think tanks to supply policy makers with research reports. A financial incentive strategy was also aimed at policy makers, but the means to persuade them to support the position of the firm is by financial inducements instead of information. A common tactic was making financial contributions to a political party or a specific policy maker.

Finally, whereas an information and a financial incentive strategy both aimed directly at political decision makers by providing information and financial inducements respectively, constituency building worked indirectly by targeting individual voters. With tactics such as newspaper advertisements or press conferences, firms tried to persuade voters to support the firm’s cause, with the aim to have these voters express their opinion to policy makers (Hillman & Hitt, 1999).

Reference: Report on “Multinationals’ Political Activities on Climate Change”, Business & Society, Volume 46 Number 2, pp 201-228, June 2007. By Ans Kolk and Jonatan Pinkse, University of Amsterdam Business School, The Netherlands.
Contact: Ans Kolk, University of Amsterdam, Business School, Roetersstraat 11, 1018 WB Amsterdam, Netherlands; ph: 31 20 525 4289, fax: 31 20 525 5281, email: akolk@uva.nl http://bas.sagepub.com

Erisk Net, 6/2007, p. 201-2, 206

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