Corporate sociopolitical activism

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Corporate sociopolitical activism (CSA) refers to a firm's public demonstration of support or opposition to a partisan sociopolitical issue. [1] [2] [3] [4] CSA has become increasingly prominent in the 2010s and 2020s, as firms have taken stances on issues such as climate change, racial justice, reproductive rights, gun control, immigration, LGBTQ+ rights, and gender equality. [5]

Contents

Several terms, such as woke capitalism, woke capital, and stakeholder capitalism, [6] are used by some commentators to refer to a form of marketing, advertising, and corporate structures that pertains to sociopolitical standpoints tied to social justice and activist causes. [7] The term was coined by columnist Ross Douthat in "The Rise of Woke Capital", an article written for and published in The New York Times in 2018. [8] [9]

CSA is comparable but distinct from two related firm activities: corporate social responsibility (CSR) and corporate political activity (CPA). Firms may engage in CSA to appeal to purpose-driven ideals, as well as contribute to more strategic motives, in line with consumers' existing preferences for moral purchasing options. A recent study found that 64% of global consumers choose to buy or boycott a given brand on the basis of its political leanings, a result suggesting the increasing importance of ethical consumerism practices. [10]

A 2020 survey of CMOs revealed that a growing proportion of marketing leaders find it acceptable to make changes to products and services in response to political issues (47%), have executives speak out on political issues (33%), and use marketing communications to speak out on political issues (28%). [4] Furthermore, brands engaged in an unprecedented level of activist behavior in response to consumers protesting racial injustice in 2020. [11]

Firms have historically strayed from vocalizing stances on controversial sociopolitical matters, with the understanding that doing so could sever certain stakeholder relationships; [2] however, modern cultural shifts have precipitated a "hyper-partisan" climate, [12] leading to demand for firms to exercise purpose-driven efforts in the marketplace. [13] As stated by Richard Edelman, chief executive officer (CEO) of Edelman, "Brands are now being pushed to go beyond their classic business interests to become advocates. It is a new relationship between a company and consumer, where a purchase is premised on the brand’s willingness to live its values, act with purpose, and, if necessary, make the leap into activism." [10]

Definition

CSA is a unique form of cause-related firm behavior defined broadly by two distinct characteristics: publicity and partisanship. Specifically, CSA involves a firm's public support of or opposition to a partisan sociopolitical issue. Such issues are described as "salient unresolved social matters on which societal and institutional opinion is split, thus potentially engendering acrimonious debate among groups". [14] Notably, while the controversy surrounding a given issue can change or be resolved, a firm's efforts may be considered CSA to the extent that they reflect engagement with an issue defined as partisan at a given point in time, politics, and culture. Furthermore, the term "brand activism" has been used to describe similar efforts by individual brands (i.e. owned by firms) to vocalize public stances on sociopolitical issues; brand activism can, thus, be considered CSA delivered through a brand's voice.[ citation needed ]

Conceptual distinctions

Corporate social responsibility

Conceptual distinctions among CSA, CSR, and CPA Distinctions CSA.png
Conceptual distinctions among CSA, CSR, and CPA

CSR involves firms' contributions to widely favored societal goals (e.g. community resources, education, and donations to disease prevention research) via philanthropic or charitable efforts, [15] [16] CSA pertains to a firm's engagement in causes for which there is no universally acceptable correct response. [2] Furthermore, CSA may involve a lower level of monetary investment (e.g. a press release or an open letter) compared to CSR; however, there is greater risk associated with CSA, due in part to the potential for backlash from various stakeholders. [2] [3]

Corporate political activity

CSA is distinct from CPA—a firm's efforts (e.g. campaign contributions, lobbying, and donations to political action committees) to sway political processes and gain policy-related market advantages. [17] [18] While both types of firm activities reflect involvement in the political process, they differ in the extent to which they are publicized. CSA is often utilized as a public demonstration of a firm's core values and principles. Conversely, CPA is an often-discreet activity that is typically made public only through "accidental disclosure". [19]

Examples

Firms have increasingly taken activist stances on sociopolitical issues across a variety of domains.

Racial justice

Firms have spoken out about racial justice in a number of ways (e.g. affirming support for the Black Lives Matter movement, donating a portion of profits to civil rights organizations). Among the most prominent examples of racial justice CSA came in September 2018 when Nike announced football player Colin Kaepernick as the spokesperson for its thirtieth anniversary advertisement campaign. [20] Notably, Kaepernick stirred national debate in 2016 by kneeling during the National Anthem in protest of racial inequality and police brutality in the United States. [21] In Nike's campaign, Kaepernick said, "Believe in something, even if it means sacrificing everything." News agencies characterized this tagline as implicit support for Kaepernick's platform of racial justice advocacy. [22]

While Nike's decision initially sparked consumer backlash, as well as a dip in stock price, the firm's value reached an all-time high only a week later. [23] [24] According to a Quinnipiac University poll, much of the persistent consumer support for the ad came from consumers between 18 and 34, two-thirds of whom approved of Nike's actions. [25] This case has been considered a critical turning point in the emergence of CSA as a prominent brand practice. Additional examples of racial justice CSA include the following:

LGBTQ+ rights

A Bud Light advertisement at an LGBT pride event Pride Parade 2019 (48458163557).jpg
A Bud Light advertisement at an LGBT pride event

Firms have utilized both internal and external resources to take a stand on issues facing the LGBTQ+ community. For instance, many firms act as corporate sponsors of Pride parades internationally and assist in LGBTQ+ community-building efforts. [29] Published since 2002, the Human Rights Campaign has utilized its Corporate Equality Index (CEI) to measure the extent to which American businesses treat equitably their LGBTQ+ employees, customers, and investors. Criteria used to assess companies include, among others, a written policy of non-discrimination based on sexual orientation, gender identity, and gender expression; appropriate and respectful advertising to the LGBTQ+ community; and transgender-inclusive health benefits. [30]

There has been an increase in the number of firms with a perfect CEI rating every year since the tool's inception. Such firms frequently release statements and press releases to express satisfaction at having been recognized for their diversity and inclusivity efforts. Notably, many brands have also released Pride-related merchandise in recent years to signal support for LGBTQ+ rights, as well as position themselves as advocates for LGBTQ+ consumers.

Climate change

While sustainable business practices have long been a component of firms' CSR activities, some companies have taken an activist stance in recent years to address climate change more explicitly. For example, the brand Patagonia has established itself as a chief market-based environmental justice advocate. Its November 2011 "Don't Buy This Jacket" spot in the New York Times served as both an advertisement for the firm's merchandise and an imperative for consumers to reduce their carbon footprint. [34] The ad's message leveraged an anti-consumerist ideology to encourage the purchase of long-lasting outdoor apparel and deter the proliferation of the fast fashion industry. [35] Most large companies across the world have made commitments to climate change. [36] For example:

Gun control

A number of major firearms sellers have modified their gun sales policies, particularly as a response to mass shootings taking place in the U.S. Two such notable examples are the following:

Other domains

Firms have engaged in CSA in a number of other domains. Below are select examples.

Reproductive health care

M.A.C. Cosmetics has worked with Planned Parenthood since 2008 and contributed over $2 million to the organization. [44] According to John Demsey, executive group president of the brand's parent company Estée Lauder, "It is so important for people of all ages, all races and all genders to get the accurate information and care they need so they can live their best, healthiest lives, but we see that a lot of people aren’t seeking that information and care because of stigmas that disproportionately affect women, people of color and the LGBTQ community." [45]

Net neutrality

Burger King advocated for net neutrality with a January 2018 ad that illustrated the concept of paid prioritization through hamburger sales—customers were told they would have to wait longer for their food, unless they were willing to pay a premium for immediate service. [46]

Gender non-discrimination

Target issued a statement in September 2016 encouraging store employees and patrons to use the restroom or fitting room facility that corresponds with their gender identity. [47]

Immigration

In January 2017, nearly 100 Silicon Valley firms filed an amicus brief against the Trump administration's anti-immigration policy directed at refugees, travelers, and visa holders originating from predominantly Muslim portions of the world. [48]

Controversial symbols

NASCAR announced in July 2020 that it would ban the Confederate flag from all its racing venues. [49]

Potential business benefits

Research has uncovered the broader financial implications of CSA on firm value including improving firm's attractiveness to a wider segment of investors and customers. On average, investors respond negatively to CSA, though there are a number of factors that may buffer or even reverse this relationship. Most notably, a firm's CSA elicits positive abnormal stock returns when there is high alignment between the firm's CSA and the values of its stakeholders (e.g. customers, employees, and state legislators). In particular, researchers observed an increase in sales growth over the next quarter and year when CSA aligned with customer values. [2]

A number of CSA characteristics have been shown to further heighten investor response: if the activism takes the form of an action, is announced by the CEO, is not justified by a business objective, and is announced alone (vs. in a coalition with other firms). Notably, managers may find it especially appropriate to engage in CSA if they are deeply committed to activism, and it aligns with their strategic objectives (i.e. acquiring a more liberal or conservative customer base). [2] Still, CSA requires strategic deliberation. CSA activities may signal to stakeholders that the firm is willing to engage in risky behaviors and even divert resources from profit-generating activities. Given the enduring nature of activism, it is often plausible for investors to believe CSA serves as a value-based indication of a firm's future decisions, particularly those related to purpose, reputation, and relationship management. [2]

Criticism and concerns

Critics have expressed concern about the degree to which CSA is helpful, either for advancing sociopolitical causes or as a firm activity more generally. By the mid-2010s, forms of rhetoric that were later retroactively labelled as "woke" had entered mainstream media and were being used in marketing and advertising; [50] campaigns associated with this trend have been generally perceived by consumers as insincere and inauthentic, and have provoked cultural backlashes. [51]

Cultural scientists Akane Kanai and Rosalind Gill described woke capitalism as a then-"dramatically intensifying" trend in which public relations pertains to the concerns of historically marginalized groups (such as in terms of race, gender and religion), using them as mascots in advertisements with messages of empowerment. On the one hand, this creates an individualized and depoliticized idea of social justice, using depictions of social action to signify an increase in self-confidence; on the other hand, the omnipresent visibility in advertising of minorities can also amplify a backlash against their equality. For people in lower economic strata, the equality of these minorities thus becomes indispensable to the maintenance of capitalism, with the minorities being seen as responsible for the losses of the system. [52]

Woke-washing

The term woke-washing was used in 2019 by Alan Jope, chief executive of Unilever, who warned that brands which failed to take verifiable action on their rhetoric could "further destroy trust in our industry". [53] Helen Lewis held the opinion that cancel culture is the result of what she calls "the iron law of woke capitalism", and believes that it is used for inexpensive messaging as a substitute for genuine reform. [8] Will Hutton wrote that he believed woke capitalism is "the only way forward", citing principles of corporate responsibility. [6] Alternatively, Elizabeth Bruenig observed that while woke capitalism has been seen as an evolution of capitalism that can create unprecedented benefits for the public good, it remains a form of capitalism and hence cannot be celebrated without aligning with capitalist interests; [54] similarly, Andrew V. Abela held the opinion that it does little to actually further progressive causes. [55]

A common argument is that firms are profit-seeking and thus care more about image and reputation than the causes they address. Some have referred to firms' political behavior as akin to "woke-washing", a pejorative term adapted from the similar concept of "greenwashing". Woke-washing is a critique leveraged against firms thought to "appropriate the language of social activism into marketing material". [56] Critics have further argued that firms may utilize greater capital on the appearance of progressivism (i.e. through advertisements and promotional efforts) than on actual cause-related awareness or fundraising efforts. In such circumstances, activism has been criticized as a deceptive marketing tool for capturing demand among belief-driven consumers. [57] Action-based follow-through could be important for fostering perceptions of authentic connection to supported sociopolitical causes. In a 2020 Harvard Business Review article, journalists Erin Dowell and Marlette Jackson said, "Empty company statements can seem to say that Black lives only matter to big business when there’s profit to be made." [56] Others have argued whether firms should engage with sociopolitical issues at all. In particular, some critics have shunned the idea that market-based entities should influence or have a say in what is considered right and wrong.[ citation needed ]

Counter-movement

Beginning to a major degree in the 2020s, members of the American right have perpetuated efforts to boycott companies that openly support "woke" causes. The phrase "Go woke, go broke" has been an umbrella catchphrase to denote companies subject to boycotts against companies for "going woke" or engaging in activities like promoting diversity, equity, and inclusion or in the case of Bud Light maker AB InBev, partnering with transgender influencers. Many companies subject to "go woke go broke" campaigns, including AB InBev, Target, and the Walt Disney Company have seen declines in revenue, profit, and/or stock value as of a result of "go woke go broke" campaigns. Some figures in business, such as Mark Cuban, have defended companies engaging in "wokeness" by arguing that engaging in social justice causes reflects companies caring about their customers. [58] [59]

See also

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<span class="mw-page-title-main">Pinkwashing (LGBTQ)</span> Promotional use of LGBTQ rights

Pinkwashing, also known as rainbow-washing, is the strategy of deploying messages that are superficially sympathetic towards the LGBTQ community for ends having little or nothing to do with LGBTQ equality or inclusion, including LGBTQ marketing.

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<i>Woke</i> Political slang term

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<span class="mw-page-title-main">Redwashing</span> Adopting inauthentic left-wing rhetoric for gain

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Go woke, go broke, or alternatively get woke, go broke, is an American political catchphrase used by right-wing groups to criticize and boycott businesses publicly supporting progressive policies, including empowering women, LGBT people and critical race theory, claiming that stock value and business performance will inevitably suffer as a result of adopting values of diversity, equity, and inclusion. Opinions differ on the genuine impact of the phrase.

Corporate political responsibility (CPR) is a corporate responsibility concept that emphasizes the political dimension of a company's actions. The concept was developed in the 2010s as an enhancement of existing frameworks such as Corporate Social Responsibility. CPR regards the social and ecological aspects underlined by CSR as inherently connected to the political, thus highlighting the interdependence of business activities with the public realm, societal institutions and collective goods.

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  50. ↑ Sobande, Francesca (2019). "Woke-washing: 'Intersectional' femvertising and branding 'woke' bravery" (PDF). European Journal of Marketing. 54 (11): 2723–2745. doi:10.1108/EJM-02-2019-0134. ISSN   0309-0566. S2CID   213469381. Archived from the original (PDF) on November 13, 2020. Retrieved January 5, 2024. adverts span from 2015–2018, which reflects the point at which the language of 'woke(ness)' entered mainstream media and marketing spheres
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  53. ↑ Davies, Rob. "Unilever boss says brands using 'woke-washing' destroy trust". The Guardian. Retrieved July 5, 2021.
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  55. ↑ Abela, Andrew V. (November 26, 2020). "Opinion | Woke Capitalism in a Secular World". The Wall Street Journal .
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