Why Corporate Advocacy is Going Mainstream
American companies spent decades carefully avoiding social issues for fear of alienating customers, but that is changing fast. Consumers now reward companies that speak out and show leadership on divisive issues. It may even be a requirement.
When as many as 26 million people protested for racial equality in 2020—probably the largest such action ever on U.S. soil—well-known American brands like Amazon, Netflix and Citigroup quickly came out in support of the Black Lives Matter movement.
It also happened during the Women’s March, when companies like Ben & Jerry’s and SoundCloud openly supported rallies. And again when Ford, Disney, Marriott and many other household names reviewed their PAC donations to lawmakers who voted against certifying the 2020 election.
Corporate activism is finally having its day, and it’s no mystery why. While American companies spent decades carefully avoiding social issues for fear of alienating customers, a growing body of research shows that consumers now reward companies that speak out and show leadership on issues like race relations, gun control, immigration and LGBTQ rights. In fact, it may even be a requirement.
“Companies realize they cannot sit silent anymore,” said Jeb Ory, co-founder and chief strategy officer at Capitol Canary. “They have to reflect a set of values. Taking a position on important issues is becoming a market expectation.”
A Market Expectation
While the idea runs counter to the common wisdom in Washington, there is much to support the idea that corporate activism is going to join the high profile efforts to improve Corporate Social Responsibility, corporate philanthropy and corporate governance seen in the last two decades. Take a look at just some of the data:
- The Edelman Trust Barometer 2021, an annual report that has measured trust worldwide for more than two decades, showed that almost 9 out of 10 respondents—86 percent—say they expect CEOs to speak out publicly on societal issues.
- A report by Kantar Consulting, which surveyed 20,000 consumers in 2020, showed that almost two thirds of millennials favored “brands that have a point of view and stand for something.
- A RealClear Opinion Research poll in 2020 showed that two thirds of Millennial and Gen Z respondents said they viewed Nike more favorably after the company aired an ad featuring former NFL Quarterback Colin Kaepernick, who drew controversy for taking a knee during the National Anthem to protest racial injustice. Forty-two percent said they were likely to buy more Nike products after seeing the ad.
As one Kantar executive put it, “Between revenue and social footprint, many brands now have more power than elected leaders.”
At Your Company…
What does it mean for your firm? Adding social issues to those that directly relate to your business requires thought, consideration and a plan.
While corporate activism often involves top executives and multiple departments, many times the strategy is born on the government relations team, which is closest to the political arena and often understands issues more clearly. Your team can draft a strategy and take it to your execs for approval, understanding that the plan may be modified and refined along the way.
Some things to consider:
- Culture. Corporate activism works best when it matches the culture and values already established at your company. For example, Airbnb unveiled its dramatic “Is Mankind?” advertisement in 2015, which showed unwavering support for transgender Americans at a time when transgender rights were under assault by federal and state policies. The ad worked because inclusion was one of the company’s core values, embodied in its “belong anywhere” slogan. The LGBTQ community was already an important part of its customer base.
- Clarity. Set clear expectations for what you are trying to achieve and why you are doing it. What does success look like? How will it be measured? Doing some level setting up front with your company’s decision makers will provide a stronger chance of success.
- Care. There are many companies that set out with good intentions only to have their efforts fail, sometimes with reputational damage. The takeaway is that wading in on social issues is a job to be done with care. Do your research. Test your premise. Obtain buy-in from company leadership, employees and customers. Developing your company’s voice is not something to fear, but you should treat the process with respect.
While the conversation will look different at every company, it is very clearly taking place more often as companies seek to align strategy and markets.
“We work with hundreds of companies and we have seen a major shift in the last decade,” Ory said. “When we began, corporations were almost timid. Today, that has almost completely reversed. They reach out to us because they want to be vocal on the issues that are important to their business.”