Are companies pulling back on progressive promises?

Speaker 1: Frequency Podcast Network, stories that matter, podcasts that resonate.

Jordan: If you’ve consumed any commentary from right-wing news networks or blogs or podcasts or videos over the past few years, then this phrase,

Clip 1: All of us are determined to go woke, go broke. You’ve got a good sports illustrated story for us. Another form of go woke, go broke.

Clip 2: Did Disney just learn a lesson about the phrase go woke and go broke.

Jordan: The premise behind it is simple, at least from their point of view. Companies that openly embrace a progressive agenda, see their finances suffer and inevitably reverse course or just collapse on the face of it, that premise is laughable. It started with brands like Nike and Apple and Disney and those folks are doing fine. In fact, for a long time embracing diversity and progressive values was seen not just as a good thing to do, but as a path to profits. This was especially true during the Trump administration. Today though, experts are asking if something has shifted. A couple of high profile examples seem to indicate that major companies are beginning to shy away from campaigns that highlight their values in favor of a more bland approach that, well, that won’t lead to any boycotts. So why is this happening now? Are they really finally feeling an impact on the bottom line? Is it the political winds, especially in the United States that are changing direction? Does it turn out to be the case that large corporations are not in fact driven by altruism and a sense of a moral obligation to society? Could that be? I am Jordan Heath-Rawlings. This is The Big Story. Emily Stewart is a senior correspondent at Business Insider. We are reaching her in New York where it’s New York noisy, so if you hear a little bit of traffic in the background, that’s what it is. Hey, Emily.

Emily Stewart: Hello. Yes, it, it’s a noisy day in Brooklyn.

Jordan: I want to, I guess start by asking you to go back in time a little bit and try to explain to us how and when these large corporations began making sustainability and diversity initiatives central to their promotions and the promises they were making to their customers.

Emily Stewart: I don’t think there’s a specific start point, but I think if you go back like 20, 30 years, it’s clear that companies generally were steering clear of politics of any mention of anything that could be problematic. There’s this anecdote in the 1990s, Michael Jordan, the basketball player, joked that Republicans buy sneakers too, right? And so the idea was we want to sell that everybody, this is great. We do not see anything outside of our business and making you customer whatever your political leanings like us. Over the past decade, that has changed. If you think back to Colin Kaepernick and the NFL here in the United States, and he started to protest on the sidelines of games. Nike, for example, really stood by him. And I think the line that you’ve heard from a lot of experts in this area is that customers, consumers, to some extent expect companies to be on the quote right side of issues, progressive side, good for the environment, good for diversity. But I think the bigger issue that a lot of experts will say is that workers expect that too. You have younger, more progressive workforce, and if you’re competing for workers, you want them to think that you are good. So if you’re a Google, if you’re a Facebook, if you are Apple, you want your employees to feel like you’re on the right side of issues so that they will go work for you. Otherwise you’re going to wind up in a problem where they will leave or they will speak out and they will protest, and a lot of workers have felt more emboldened to do that.

Jordan: Can you give us a couple examples? Colin Kaepernick is a great one, but maybe a couple more of those kind of initiatives that represented those values for the company and also were incredibly successful in terms of actually moving merchandise or whatever they’re selling.

Emily Stewart: Yeah, I mean I think you can think about the Patagonia of the world where they have a very forward facing sustainability message that’s at the center of the brand. That is a thing that they think about. They care about the environment, they want to be good for the environment. You think about after when Donald Trump was president and he dropped out of the Paris Climate Agreement, a lot of companies said, Hey, we’re going to stick with it. The story I wrote about this recently, I wrote about Unilever, which owns Dove, Vaseline, Hellmans, and they’ve really been out front on climate and saying, we’re going to be really good for the environment and we’re also going to make a lot of money. Now have they been successful? I think that is an open question. I do want to emphasize with all of this, saying what is successful and what is not is hard, and in a lot of these changes really are on the margins here in the United States. In SEC filings, companies have to say how much they’re paying their CEOs compared to their median workers, and I think the hope in that was in these public filings that CEOs would start making less money. But no, CEOs still make a ton of money. There’s just one line in a filing that says how much it is, but a real change is sometimes a little bit hard to gauge.

Jordan: Your recent piece though, looked at how companies may be pulling back from this strategy, and I wonder if you can point to a catalyst for that or why this is happening and how we can, I don’t know if we can even quantify it other than just looking at some high profile examples.

Emily Stewart: Yeah, I mean I think obviously that the big high profile example is Bud Light last year, so for those not familiar Bud Light last spring undertook a pretty small marketing campaign with a transgender influencer named Dylan Mulvaney sent her a handful of cans of beer. She did an Instagram post to celebrate her year of girlhood, and that really, really caught fire on the right. You had kid rock shooting cases of beer. A lot of people said they were going to boycott Bud Light, and they did. They stopped buying Bud Light and they switched to other brands. Now, I will note here that part of the reason that this was successful is that there are a lot of mediocre light beers on the market, and it is not that hard to switch Bud Light from Miller Light or Coors Light or pick your poison, but that did really have, I think a chilling effect. You also had in the US target for Pride Month, which comes into has always had kind of a big display, and last year you saw a lot of backlash around that and people were going into stores and tearing down displays and threatening employees, and Target got a little freaked out by that. This year they are saying that they have pulled back on their Pride celebration. They’re only going to put merchandise out in certain stores, and part of that is in protecting their employees. If you’re making $15 an hour at Target, you didn’t sign up for somebody to be screaming at you because of some display in the store. But I do think overall the right has really been emboldened and really has had some success and maybe not on every front, but you have a Bud Light, you have a target, and you have to think that if you’re in a boardroom right now, you’re sitting around and you’re thinking, this is a little complicated and maybe we should kind of scale back. We don’t want to be the target of this even if it’s not sustained. One person I talked to recently too, kind of pointed out in 2018, 2017 when Trump was in the White House, it was kind of easy for companies to speak out. The issues at hand were pretty obvious to some extent. If there is a crackdown on immigration, if you’re Facebook, it’s easy to say, wait, we need high skilled immigrants to work for us. We can speak out about that. Or if they’re white supremacists marching in Charlottesville, it’s easy to say, Hey, white supremacy bad. And what is happening right now is that some of the issues of the day are complicated. If you’re a big company, you don’t want to weigh in on Israel Palestine and you maybe don’t want to weigh in on trans issues either because it is a little bit thornier and it is not as obvious

Jordan: When companies look. And I guess I should mention, we recently did an episode on why some boycotts work and others don’t, and Bud Light was an example of one that worked precisely because as you mentioned, it’s not much to ask to buy a different cheap beer, but would companies look at that and really say, given what you mentioned at the beginning of how important it is to their employees, that we are going to back down on some of these things despite the fact that we might end up on the wrong side of an issue, at least from our employees and progressive folks view of it.

Emily Stewart: I mean, in some cases it’s not necessarily that companies aren’t doing some of the initiatives still, but they aren’t talking about it as much. You think of Larry Fink at BlackRock, he said, I don’t say ESG, which is environmental social governance kind of considerations in investing. He doesn’t talk about it anymore. I was talking to someone at a bank a couple of months ago and they mentioned ESG, and they said, do you say that anymore? They said, no, we don’t say that anymore.

Jordan: But they still do it.

Emily Stewart: They still do it. They still do have these initiatives on diversity, equity, and inclusion. I do think it is a little bit trickier and it’s a little bit harder to know. You think back to 2020 with the George Floyd protests, a lot of companies made Big Splash about they’re going to do all this DEI hiring. They’re hiring a head of DEI. They’re really going to focus on that. And some companies really have shied away. They’ve put their DEI just back into the HR department, the people who they hired to oversee those efforts. Maybe those positions have been eliminated, but a lot of these companies are still doing this stuff. Ultimately, it’s good for your business to think about what climate change will mean for your business. It is good for your bottom line to think about diversity and to have a diverse pool of workers. And like you said, it is good too for your workforce. Your workers generally want to feel like they’re not working at an evil place.

Jordan: So far, we’ve just been talking about companies in general and obviously there are thousands of them and we can’t discuss them like that. Is there any way to quantify what counts as a success in a progressive marketing campaign or what constitutes a failure in terms of how much money is invested in these kind of initiatives that obviously these companies are looking at the bottom line as much as we might like to prescribe generous social opinions to them?

Emily Stewart: I think this is tough. You can always look at public filings and see how companies are doing and where they’re investing. There are ways to find this information, and again, I don’t think most businesses would be doing this if they didn’t think it were good for business. I mentioned Unilever at the top, and in 2009 they really made kind of a big splash saying, oh, we’re going to double our sales and we’re going to have our carbon footprint. I do think that that’s not necessarily a bad thing to some extent because they’re being a little bit more realistic. Unilever can do certain things, for example, it can make a difference in what kind of plastics it’s using and whether those are recyclable, all of that kind of stuff. But Unilever also can’t save the world, and I think being honest about that is a good place to start. One thing I think about, this is kind of silly, but Starbucks and public bathrooms, so there are not public bathrooms everywhere and Starbucks serves as a public bathroom for the world. They got into trouble a couple of years ago because they were blocking people from using the bathroom. But it’s also when you look at Starbucks and say, that can be the solution, we’ve got a problem here, right? Because companies can’t solve everything. And so as much as it kind of feels good to say, okay, well the government won’t do anything, so companies, well, Unilever is not going to save the world and neither is Starbucks.

Jordan: You mentioned a sort of resurgent right wing push after the Bud Light campaign, and the one thing I see all the time, because this is, listen, no offence to right wingers, they’re always boycotting something. There is always a campaign that frustrates them out there and the catchphrase all the time is go woke, go broke. Have we seen any evidence of that actually happening? Yes, Bud Light backed down, but I mean they’re talking about Disney and Apple and this kind of stuff, and I wonder if there’s any evidence anywhere that these kind of protests have quantifiably affected the bottom line

Emily Stewart: Broadly? No, I don’t think there’s much evidence on that. I mean, you can think of, I forget when it was a few years ago that people were smashing their Keurig machines. I don’t even remember why, Keurig is fine. I think overall people don’t shop their values in general, and I think this is true candidly, on both sides of the aisle, it’s very easy to say, oh, I’m going to stop going to McDonald’s because I don’t like how they pay their workers. I’m going to stop going to Starbucks because they’re union. It’s something where I or whatever. But day-to-Day habits are pretty hard to break. And we also have a problem that a lot of sectors in the economy are really run by a handful of companies. You’re going to drive yourself nuts if you’re constantly trying to see if you’re shopping the right way. And so this true on both sides, and it is just too hard for even Conservatives who really think, okay, okay, you could think about it. I don’t want to go into Target. Okay, well now I also can’t drink Bud Light. Oh, well, I’m mad at this company and I’m mad at the Keurig and I’m mad at Nike. And at some point there’s kind of nowhere to go.

Jordan: I can’t watch Disney now. That’s a lot.

Emily Stewart: I can’t watch Disney. And there have been efforts on the right to kind of create conservative alternatives companies, so like an e-commerce platform where there is a conservative beer, but they’re not successful by and large. People just want to kind of get through their lives and buy the stuff that they want to buy and that they need to buy it. And you just, you’re going to keep yourself up at night.

Jordan: So why then would these companies be pulling back if we don’t really have much evidence of this actually impacting their financials? Is it just to avoid hassle on social media?

Emily Stewart: I think to some extent, yes. If you don’t want to deal as much as, okay, maybe people are still going to go to your store, but you also don’t want to deal with a bunch of PR backlash, and honestly, the media does this a lot too. The amount of times that my current job and my previous job, I would have to write up, oh, people are boycotting X door and I’d be writing it up and they think, well, are they boycotting it or is just five people on Twitter saying it and those are taking off, or is this on TikTok or Instagram? But you also have to remember, companies are pretty risk averse and the whole point is to make money and they ultimately answer to their shareholders. And sometimes you can’t really take the risk and maybe let’s say if you’re a Nike and that going on a limb on racial issues is good, you’re going to do it. But if you’re not to go back to Bud Light, but if you’re going back to Bud Light, that did turn out to be a risk and it was a risk that Bud Light didn’t foresee. And so I do think a lot of companies are a little bit anxious. And like I said before, there is a question of what exactly the issue is. It’s very difficult for a lot of companies to come out and say anything about Israel Palestine. And there’s also a lot of misinformation out there where you think, oh, this company’s funding Israel, and then you look into it and it’s not, so it just kind of can become a PR headache even if it isn’t terrible for your sales.

Jordan: If you’re an executive right now, and I assume you talk to some of them, how are you approaching balancing the need to be on the right side of an issue and the need to help push society forward with the concern that I guess you don’t know which little thing that you do could kick up a firestorm as you mentioned. Not to keep going back to Bud Light, but that was just a little influencer post. It wasn’t like a big ad spend or anything.

Emily Stewart: Yeah, I mean there’s definitely been, I think a chilling effect. I was talking to a board member at one company recently and she said, we just don’t even talk about DEI in the same way that we did a couple of years ago. It just doesn’t come up in conversation. And when it does, it’s kind of like we want to be careful around that. So I think a lot of it is just more kind of a chilling effect. And I think there is kind of an understanding that you can still do some ESG stuff, but it sounds weird to say, but maybe just you really don’t want to say it. And executives are saying this pretty openly too. You have Larry Fink out here saying, no, it’s a toxic term. I don’t say that anymore. We don’t talk about it because you just really don’t want to deal with it. And a lot of it is hard to know how sincere some companies were in the first place. And if there’s an opportunity to get back to business and not have to deal with some of these thornier issues, that’s what they’re going to do.

Jordan: Last thing I want to ask you, and I don’t know if either of us are equipped to answer this question, but I’ll ask it anyway just in the long run, what does it mean for us as a society? I guess if companies are pulling back from this, and obviously it’s not their responsibility to lead the way on this, but I think a lot of progressive people would have looked at the proliferation of companies espousing these values and sort of taken that as a sign that things are moving in the right direction. And now we’re not seeing that.

Emily Stewart: I mean, this sounds cynical, but I don’t think it’s the worst thing in the world to realize that corporate America is not coming to the rescue. A few years ago, someone at BlackRock in Tariq Fancy came out and was saying, listen, what they’re doing with their ESG funds as they’re moving around some shares here and there and it’s not really meaningful. And his sort of argument was like, you really need the government to step in here. You really do need regulations. You can only expect businesses to do so much. And I kind of subscribe to that where it’s lovely that I don’t know, Dick’s Sporting Goods says they’re going to stop selling firearms after we have another mass shooting in the US, but we need gun control. And it’s horrifying that our government will not do it here. And so like I said, it’s, it’s tricky. You want companies to be on the more progressive side, but I think we all need to be pretty clear-eyed about the limitations of that. You look at a PR statement, also go and see where a company’s doing political donations before you decide whether or not they’re on the side that you think they are.

Jordan: And companies are not your friends. And if you take what they’re doing for social progress, then you might be disappointed when they turn around and chase the bottom line, which is after all what they’re built for.

Emily Stewart: Yeah, I think companies, not your friend, is something every once in a while, I think I should get tattooed on my arm, but yeah, companies are not your friend.

Jordan: Emily, thank you so much for this. It’s a great discussion.

Emily Stewart: Thank you.

Jordan: Emily Stewart, senior correspondent from Business Insider. That was The Big Story, the only corporation that is your friend. You can find more big stories at The Big Story podcast.ca. You can also send us some feedback on this episode or any other by writing to hello@TheBigStorypodcast.ca or by calling us up and leaving a voicemail 416-935-5935. You can find us in your favorite podcast player, and when you do, do not forget to leave us a rating or a review or just click that share button and send it to someone you love or hate. I don’t care. Thanks for listening. I’m Jordan Heath-Rawlings. We’ll talk tomorrow. Back to top of page