Ceremonial conformity: navigating institutional complexity and uncertainty in corporate political activities

Purpose This study aims to examine Canadian institutional investors’ interest in the political activities of their portfolio companies and the companies’ strategic responses. This study also explores the decoupling of social and political responsibilities of companies, contributing to underexplored institutional and ethical perspectives in corporate political activity (CPA) analysis. Design/methodology/approach The authors conducted a qualitative content analysis of diverse public documents produced by crucial actors in the responsible investment (RI) industry, such as associations; standard setters; environmental, social and governance (ESG) providers; responsible investors’ funds; and companies belonging to those funds. Findings Companies’ CPA disclosures frequently show inconsistency and opacity, reflecting similar issues in ESG ratings. Differences in perceptions of CPA’s importance among ESG standards may cause this inconsistency. While sustainability metrics often neglect CPAs, particularly lobbying in ESG reports, responsible investors, even those following PRI, seem to distance themselves, not rigorously overseeing CPA disclosures. The findings indicate that institutional uncertainty prompts companies to offer only superficial compliance to investor expectations. Originality/value The present approach comprehensively explores corporate political actions, encompassing diverse perspectives within the RI industry. This study examines the disparity between responsible investors’ declared intentions and their real-world actions concerning corporate political responsibility. Finally, the authors emphasize that institutional complexity results in a disconnect between responsible investors’ policies and their actual investment practices. This decoupling is also evident between corporate policies and their disclosures and between the expectations of standard setters and rating agencies.