Political Spending

How to Bring Transparency to Corporate Political Spending

In April, Kevin Brennan, co-head of the Investment Engine and Director of Investment Systems at Bridgewater Associates, and Paige Warren, a longtime finance executive and current senior fellow at the Advanced Leadership Initiative at Harvard University, co-authored a memo outlining how ESG—a field that has traditionally focused on issues such as environmental degradation, diversity and racial equity, human rights, board structure, and executive compensation—intersects with corporate political spending. 

Our findings? Corporate political influence is a critical but overlooked driver of ESG impact.

The Leadership Now Project ESG Task Force has championed this work, spending the past several months interviewing investors and corporate executives and gathering data from resources such as OpenSecrets, InfluenceMap, and the Center for Political Accountability. This research has helped inform our thesis:

  • Corporate political influence matters to ESG.

  • Political spending is often an overlooked arena when it comes to ESG.

  • CEOs are more likely to align corporate political spending and ESG priorities when they experience pressure from key influencers: investors, board members, and executives and employees, supported by media awareness.

At Leadership Now, we recommend leaders of U.S. public companies take a few critical actions to ensure corporate political spending is transparent, aligned with their ESG goals, and contributes to a stable political and economic environment. 

Read more in our new memo “ESG and Corporate Political Spending: Practical Actions For Business Leaders to Reduce Risk, Ensure Alignment, & Support A Stable Economic Environment” 

Since publishing the memo, Kevin and Paige are looking ahead to what comes next. After a year exploring the potential for the ESG investing wave to help strengthen US democracy, they identified an opportunity to focus on corporate political influence. They are now working on launching a new initiative called OpenBook that aims to create the norm for corporations to provide transparency and accountability for their political spending and influence activities. Look out for their interviews on our blog in the coming weeks. 

For more insights on ESG and Corporate Political Influence, visit our ESG learning center.

ESG & Political Risk: A New Leadership Imperative

Nearly every week seems to bring a new crisis for business leaders to navigate -- from Russia’s invasion of Ukraine to the Supreme Court’s leaked Roe v. Wade decision to Florida’s ‘Don’t Say Gay’ legislation to the acquisition of Twitter. With business remaining the most trusted voice in society, it’s more clear than ever that leaders need to be proactive about what their values are -- and what those values mean in the policy and political sphere.  

How does this relate to democracy and ESG? Increasingly investors and employees seek to understand how political spending aligns with a company’s ESG priorities and if that spending is creating unintended risks. For instance, companies like Airbnb and Microsoft decided that politicians who supported the Jan 6th insurrection were creating too great a political risk to America’s economy and democracy. They promptly pulled their political contributions, and a majority of companies continue to refrain from funding those political leaders. Similarly, companies en masse halted business activities in Russia in response to the invasion of Ukraine.

As state legislators introduce bills impacting the LGBT community and abortion rights, the question of how a company responds will become more local. Executives will need to decide if this type of state legislation threatens their commitment to inclusion and equity as Yelp CEO Jeremy Stoppelman argued this week, and if they will stop supporting state legislators advancing those bills, many of whom receive substantial campaign funding from companies.


Leadership Now launches new ESG memo

ESG and Corporate Political Spending: Practical Actions For Business Leaders to Reduce Risk, Ensure Alignment, & Support A Stable Economic Environment 

The memo, written by Kevin Brennan, co-head of the Investment Engine at Bridgewater Associates, and Paige Warren, a senior fellow at the Advanced Leadership Initiative at Harvard, highlights how political spending impacts ESG priorities and offers a roadmap for company leaders to proactively manage risks through greater transparency.  


Companies can take several steps to proactively manage risk. The first is to make sure political spending is transparent. This is measurable -- it is currently tracked by the CPA-Zicklin Index -- and is a factor ESG investors can consider. Second, decision-makers need to be clear on what their corporate values and risks are -- whether it is climate change, election risks, or inclusion -- and understand if those priorities are reflected in the candidates and political organizations their company funds. In order to accomplish this, the authors provide practical guidance for company leaders on the integration of political spending data into ESG frameworks.

These are tricky times for all leaders to navigate. As the Disney case study illustrates, political risk requires proactive management, not reactive steps taken in the midst of a crisis.

At Leadership Now, we are excited to build upon this first memo and grow our ESG initiative. If you’re interested in getting involved or learning more, please reach out to Suraj Patel.