An increasing number of brands are bucking the long-held trend of keeping their distance from hot-button political and social issues, instead choosing to embrace sustainability, LGBT rights, gun control, and more, regardless of what the consequences from customers may be.
“This is a major shift that we’re seeing, in that companies are realizing that they can have a substantial impact on the political environment,” said Daniel Korschun, an associate professor of marketing at Drexel University. “What’s really notable is that they’re doing it in such an open way compared to how they were involved in past years.”
Companies previously engaged in the political process through lobbying and other closed-door methods, providing a layer of secrecy in which the average consumer may not know the stances or policies brands were advocating for behind the scenes.
But now, companies are “adding to this very public element where they’re calling on consumers and employees to join executives in having a political impact,” Korschun said.
In May, for example, Gillette released an ad that featured a father teaching his transgender son how to shave. The ad was the latest from the razor company that sought to challenge the traditional definition of masculinity, and was met with praise and condemnation.
Driving the shift among brands to publicly take a stand on political or social issues is the collision of two trends, Korschun said. First, the United States has become more polarized, leaving companies in a position where it is difficult to remain neutral, and second, younger customers are examining not only the quality of the company’s product or service, but also what its values are.
“As companies are asked to show their values more and simultaneously consumers are becoming more politically polarized, companies are being forced to respond to this shift, and they’re increasingly forced to take a side,” Korschun said. “It’s becoming increasingly difficult to keep everyone happy by staying in the middle. If you sit in the middle of the train tracks, you get run over.”
A 2018 study from Global Strategy Group found that an increasing number of Americans want companies to come off the sidelines and effect social change. Eighty-one percent agree that corporations should take action to address important issues facing society, and 77% believe they have a responsibility to do so. Seventy-six percent of Americans, meanwhile, believe corporations should stand up for what they believe politically regardless of whether its controversial, according to the survey.
But for some industries, the desire to please politically aware consumers and investors can create tension. Luxury brands, for example, have come under pressure to lessen their environmental impact, while manufacturers eat up natural resources.
To push the fashion industry to become more aware of its environmental footprint, French President Emmanuel Macron selected Kering CEO Francois-Henri Pinault, whose company owns Gucci, to lead a sustainability drive. Macron and Pinault announced a new plan on the eve of the Group of Seven summit in Biarritz, France, that focuses on climate, biodiversity, and oceans. Thirty-two fashion and textile companies, including Adidas, Chanel, Burberry, and Hermes, signed on to the Fashion Pact, which was presented at this year’s gathering of world leaders.
Korschun cautioned that while there can be conflicts between sustainability and the luxury goods industry, there are areas where they can be compatible.
“The starting point is sustainability is part of a brand, and it needs to make sense within people’s understanding of that brand,” he said. “If it’s consistent with the brand, it can reinforce and strengthen aspects, but if it’s inconsistent, it can confuse or lead to skepticism about the company’s true motives.”
“The problem occurs when companies are trying to tout things that either don’t provide a benefit or seem to be contradictory to it,” Korschun said.
In addition to the current political climate, in which the country seems more polarized than ever before, social media has also made it easier for consumers to amplify their criticisms or the indiscretions of companies.
“Because of social media, because what happens within the company is more transparent and more accessible, they really can’t escape politics at this point,” said Jerry Davis, professor of management and organizations at the University of Michigan. “Even if they wanted to keep their heads down, it’s really hard not to be held accountable.”
In a world where brands “can’t escape from being labeled political, then you might as well do it consciously” and think about how it aligns with business objectives, he added.
One of the most outspoken voices on political and issues, Salesforce CEO Marc Benioff, said his company believes “companies and CEOs have to be activists.”
“We’re moving into a world of stakeholders. It’s not just about shareholders,” he told the New York Times last year. “Your employees are stakeholders, so are your customers, your partners, the communities that you’re in, the homeless that are nearby, your public schools. A company like ours can’t be successful in an unsuccessful economy or in an unsuccessful environment or where the school system doesn’t work. We have to take responsibility for all of those things.”
Further demonstrating the shift among brands to take a stand on social issues, Business Roundtable, which represents the country’s top companies, redefined how it views the role of corporations in American society. In a revised “Statement on the Purpose of a Corporation,” signed by 181 CEOs, the group urged corporations to move away from solely focusing on maximizing profits for shareholders and instead focus on “all stakeholders” when making decisions.
Corporations, the amended statement says, should be committed to investing in employees, dealing “fairly and ethically” with suppliers, supporting the broader communities in which they work, and delivering value to consumers.
The statement from Business Roundtable, which didn’t completely reject maximizing profits for shareholders, has “given real legitimacy to the idea that the purpose of a company goes beyond profit maximization,” Korschun said.
“We’re already seeing some separation from companies where they would all be clumped in the middle in this neutral territory,” he added, “and they’re finding the neutral territory is not as easy to maintain as they used to think.”
