Eight years ago, North Carolina faced backlash from Corporate America when it attempted to regulate how transgender people use public bathrooms. Companies like PayPal, musicians, and the NCAA all took action against the state, resulting in an estimated $4 billion economic loss. However, more recently, the corporate response to similar cultural wars has been less fervent. Last year, a record number of anti-LGBTQ bills were introduced in US state legislatures, and nearly two dozen states have restricted abortion rights since Roe v. Wade was overturned. While some companies have pledged support for employees seeking abortion care, overall, there has been less corporate activism on these issues compared to the past.
The shift in corporate activism can be attributed to various factors. One theory is that businesses may have been more willing to take risks in the past due to favorable economic conditions. However, the political and social landscape has become more polarized, making the costs of progressive campaigns higher. Additionally, customers and businesses may be experiencing fatigue from constant outrage over political issues, leading to a decrease in active involvement in social debates. This changing dynamic presents a dilemma for corporate leaders trying to navigate the shifting terrain of public opinion.
Professor Cait Lamberton from the University of Pennsylvania’s Wharton School of Business suggests that the decline in corporate activism is part of a natural life cycle of ideas. While there was strong interest in brand activism for several years, recent societal anger and division have dampened the enthusiasm for taking political or moral stands. The rise and fall of brand activism reflect the broader societal trends of shifting attitudes and priorities among consumers and businesses alike.
It is crucial for companies to consider the potential consequences of aligning themselves with controversial issues, as seen in the backlash faced by Bud Light when it partnered with a trans social media influencer. Understanding the customer base and anticipating reactions is essential when deciding to take a political or ideological stance. The balance between shareholders’ interests, brand credibility, and potential backlash can make it challenging for companies to engage in activism without risking negative outcomes.
While some companies have spoken out against certain issues, such as Georgia’s restrictive voting bills, there has been less pushback against abortion bans following the overturning of Roe v. Wade. This may be due to the divisive nature of the abortion debate and the limited power that corporations feel they have to influence such decisions. Companies can still make a difference by guaranteeing reproductive rights for their employees or offering initiatives like giving employees voting day off. Historical precedents of companies taking strong political positions exist, but the current environment of technology, polarization, and economic volatility presents unique challenges for corporate activism.
In summary, the evolution of corporate activism reflects broader societal shifts and challenges in navigating political and cultural controversies. While there may be a decline in outspoken stances on divisive issues, the complex dynamics of balancing shareholder interests, brand credibility, and potential backlash continue to shape corporate decision-making. The changing landscape of public opinion, coupled with historical precedents and contemporary challenges, presents a compelling dilemma for companies seeking to engage with social and political issues in a meaningful way.
