Our Stakeholder and Membership Manager, Karina van Ginkel writes about the event she attended at Chatham House, in partnership with the Open Society Foundation, about corporate activism:
Corporate activism isn’t an entirely new concept – corporates have a long history of engagement for self-interest, such as lobbying for deregulation or pro-business tax breaks. In recent years, we’ve seen a new form of corporate activism emerge with companies using their platform to advance social or environmental issues that aren’t necessarily related to their business. But in an age of political divisiveness and pervasive inequality, this evolution of the role of corporates begs an age-old question: what is the responsibility of business to society?
The panellists at the event attempted to answer this overarching question, among others. At the end of the discussions, one thing was clear: with dwindling public sector resources and capacity to service its societies, governments have left a large void for corporates to fill, and it is in this vacuum that corporate activism has emerged and will remain for the foreseeable future.
Many at the event saw corporate activism as an outgrowth of corporate responsibility. Almost 50 years ago today, economist Milton Friedman famously argued that the sole responsibility of business to society is to increase profits. Yet, the practice of corporate responsibility developed. First, corporate responsibility consisted of philanthropy and community work, morphing into corporates’ attempts to mitigate the negative externalities of their activities and transitioning into a focus on large corporates’ potential to scale and create positive impacts related to their business on society and the environment.
It was argued that recently, and in a context of extreme political and societal polarization, shifting demographics and increased expectations of transparency, we’ve seen a fourth phase, or at least extension, of corporate responsibility emerge: corporates taking a stand on prominent social or environmental issues, even when not directly linked to business strategy. Indeed, hardly a week goes by without hearing or seeing a company or its chief executive make its voice heard on a contentious political or social matter, such as Nike’s infamous advertising campaign featuring in support of a movement protesting against police killings of unarmed black men and Ed Stack from Dick’s Sporting Goods who stopped selling AR15 rifles after the Parkland, Florida school shooting.
Attendees agreed that corporate activism presents opportunities for both risk and reward. Regardless of the potential outcomes, the growing expectation for corporates to take a stand and make positive contributions can be at least partially attributed to the fact that there aren’t many entities in our lives that have resources as vast as corporations, or voices as loud. Research shows that millennials in particular want to see businesses being a force for positive social change. But the question was raised whether it is ethical or even desirable for unelected entities to wield such vast levels of social and political influence? The discussion touched on the potential dangers lurking beneath the growing role corporates play in public life, such as the commodification and even sabotage of valid movements as a means of distinguishing a brand’s products, such as the #MeToo in the face of Gillette’s “We Believe” ad?
Ultimately it was agreed that as brands need consumers’ money and regulatory compliance as a license to operate means there is still a role for both the government and consumers to play. The rewards of corporate activism are by no means guaranteed; they have to be earned. Given the political and social climate we are in, companies will continue testing the corporate activism waters and we can expect this area to continue to evolve.