Corporate Activism is Growing, is That Good or Bad?

Nearly a year ago, I wrote about a trend in which corporate entities are assuming roles previously fulfilled by governments. In January of 2018, for example, we saw Berkshire Hathaway, Amazon and JP Morgan announce their commitment to work together in an effort to reform healthcare. While we await the fruits of their labor to materialize, more and more corporations have begun following their lead—taking social issues head on, without waiting on the government for a solution or permission.

In fact, it’s no longer surprising to most of you that some corporations are acting in direct opposition to (or in active support of) some of our government’s current policies on a variety of issues. For example, in a widely publicized announcement this past November, Patagonia stated that they would be putting the 10 million dollars they earned through Trump’s tax cuts towards fighting climate change.

More recently in the news, was the announcement that Salesforce has begun giving clients who use their software a daring ultimatum: “Stop selling military-style rifles, or stop using our software.” The Washington Post explained that “the pressure Salesforce is exerting on…retailers — barring them from using its technology to market products, manage customer service operations and fulfill orders — puts them in a difficult position. Camping World, for example, spends more than $1 million a year on Salesforce’s e-commerce software, according to one analyst estimate. Switching to another provider now could cost the company double that to migrate data, reconfigure systems and retrain employees.”

While Salesforce happens to be the company du jour making headlines, they’re not alone in their stance on gun sales. Neither Amazon nor eBay allow firearm sales on their platforms, while Walmart will no longer sell guns to consumers under 21—a particularly bold move given the fact that they’re the country’s largest gun retailer. And, of course, there was Dick’s Sporting Goods, whose decision to pull all assault-style weapons from its shelves was among the first to do so in the U.S.

Lest you think that liberal companies are the only ones taking part in this wave of corporate social activism, think again. Perhaps the most famous case of is that of Burwell v. Hobby Lobby Stores, Inc., a religious objection dispute that made it to the Supreme Court in 2014. Thanks to Hobby Lobby (or no thanks, pending your political/ religious perspective), closely held for-profit corporations can exempt themselves from providing insurance coverage of medications or procedures they find religiously objectionable. The well-known fast food chain, Chick-fil-A, has also made headlines taking a stance against same-sex marriages and donating to anti-LGBTQ groups. It’s clear that corporate social activism spans the spectrum of political and social identity.

Data shows that most people worldwide have thoroughly embraced the reality of corporate activism. BAV ?, VMLY&R’s proprietary brand measurement data tool, quantified this trend, finding that 82% of people around the globe perceive a leadership crisis in the world and that 61% of global citizens trust private companies more than government to take care of their needs.

Corporations, as you probably know well by now, may have an ulterior motive renewed efforts of vocal and widely-publicized activism. In Axios’ coverage of the Salesforce story, for example, Louis Hayman, a historian at Cornell, was quoted speculating Salesforce’s latest move, saying it “has a lot to do with the war for talent…In an age where the corporate talent is socially liberal,” Heyman continued, “companies that do not take these positions are risking their key assets."

And in fact, companies that show a commitment to purposeful endeavors are statistically more likely to retain younger employees. PWC found that millennials are 5.3 times more likely to remain working for a purpose-driven company. Listen:

"Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us to do it...because it is good for our business"—Niall Fitzerald, Former Unilever CEO

Corporate activism and corporate engagement are trending along the same political fault lines that define the silos we seem to be living in. From Chick-fil-A to Dick’s to Salesforce, it’s clear that social activism cuts in every direction. Don’t get confused by the side you’re on. This is not about either liberal causes or conservative ones—it’s much larger than that. As citizens of a free country, we have the privilege to cast our vote for the politicians who represent our ideals. And with the rise in social activism among corporations, our money—our spending habits—have become an equally powerful ballot. 

At the end of the day, it is really the consumer/user/buyer who helps make the choice for these companies by giving them your business, and it could be that the true measure of purposefulness resides in that very particular ballot. But here’s the challenge for those of you who consider yourselves particularly purposeful. Does using a service like Uber or Lyft mean you actively support those companies’ labor and wage policies? And if you don’t, does that mean you actively seek out public transportation or taxi cabs in support of those regulations or practices? What do you think?