In recent months, we have seen a surge in headlines featuring corporations and their leaders alongside contentious social issues, in both positive and negative ways.
Leaders of Merck, Under Armor and Intel stood up for racial justice after the Charlottesville protests, Heineken was praised for producing an ad that encouraged people to connect across political divides, and #DeleteUber went viral over the course of just one weekend. Just a couple weeks ago we even saw former First Lady Michelle Obama calling on businesses to fulfil their moral obligation to take a stand on social issues in public discourse.
How should a company choose which issues to speak out on? What are the risks of speaking out, or not speaking out, and how do you go about it?
Events such as these have contributed to a trend in corporate advocacy which was absent in earlier decades, and has put companies on edge. Many of the companies SustainAbility works with have come to us asking, “How should we choose which issues to speak out on? What are the risks of speaking out, or not speaking out, and how do we go about it?”
Corporate Advocacy, Defined
To answer those questions, it’s important to first consider the definition and purpose of corporate advocacy. In the sustainability context, we consider corporate advocacy to be a key aspect of what it means to be a leader, with the following definition as noted in our report Changing Tack:
“Corporate Advocacy: A business activity that helps shape more sustainable behavior and choices across the economy: mobilizing others (policymakers, peers, investors, consumers, employees) to help reform policy, market incentives and other system conditions to drive social or sustainable development issues further (and faster) into the mainstream.”
We see corporate advocacy as an important aspect of how companies can demonstrate leadership and mobilize interest and action across peer groups, through their value chains and amongst a variety of stakeholders.
What is Different About Corporate Advocacy Today?
What is so different today about corporate advocacy that has the sustainability community talking about this and many companies scrambling and asking, “What’s going on?” There are three things that are noticeably different:
1. More corporations and their leaders are injecting themselves into conversations
In October Fashion brand Jigsaw lent its voice in support of immigration and questions what it means to be British, declaring that “there’s no such thing as ‘100% British.’” While earlier in the year Heineken, in a widely praised ad video, attempted to build bridges between political rivals by posing the question “Can two strangers with opposing views prove that there’s more that unites us than divides us?”
2. Groups of companies are working together to publicly state clear stances, and are also taking tangible action.
In 2015 a group of 379 companies, including Google, Apple, General Electric, Goldman Sachs, Johnson & Johnson and Starbucks, filed a brief urging the US Supreme Court to support legalization of same-sex marriage. In addition hundreds of companies, including PayPal, Dow Chemical, Duke Energy and Bank of America, spoke out against Mississippi’s and North Carolina’s laws removing anti-discrimination protections for LGBT individuals, many threatening to pull operations or relocate headquarters.
3. Companies are finding themselves caught in controversy around social issues.
The hashtag #DeleteUber began trending after Uber’s lack of response to President Trump’s travel ban was seen as undermining efforts to protest the ban. In the span of a weekend, over 200,000 users deleted their accounts. Meanwhile Pepsi was forced to pull an ad video featuring Kendall Jenner that was seen as insensitive to the Black Lives Matter movement, and even as capitalizing on the issue for profit.
In the past, companies tended to abide by local custom instead of risking confrontation with potential customers. Generally, the corporation’s role regarding social issues was to not be involved, which was best characterized by a famous phrase from 1970 that “the social responsibility of business is to increase its profits.”
Why Are Things Different Today?
As a populist wave continues to spread through the West, we are currently seeing more polarization in the United States and in Europe than ever before. Income inequality is rising worldwide as well, apparently at its highest point since the US’s Gilded Age at the turn of the 20th century. As tensions flare, corporations, which can symbolize both the globalist system and wealth inequality, have increasingly found themselves in the cross hairs of society.
It also seems that people are now more likely to participate in the dialogue around social issues. For example, the Women’s March in 2017 was the largest single-day protest in US history, drawing between 3.3 and 4.6 million marchers. This trend is also compounded by a demographic shift towards the “millennial” generation, which tends to be more racially diverse, more liberal on many political and social issues, less trusting of others, but also more optimistic about the future.
As tensions flare, corporations, which can symbolize both the globalist system and wealth inequality, have increasingly found themselves in the cross hairs of society.
As a result, there is rising pressure on businesses to be involved in social issues and speak out. In 2017, 89% of Americans would switch brands to one that is associated with a good cause, compared with 66% of Americans in 1993. A 2015 report reveals a similar trend, showing that 66% of global consumers said they were willing to pay more for sustainable brands, an increase from 50% in 2014.
The push to speak out on social issues is not isolated to the spending choices by consumers, however. Younger generation of workers want to work for companies that share their values, and the groups with the most influence over a company’s decision to speak out or be involved in dialogue over social issues are senior management and employees, rather than customers and advocacy groups. This means that corporate advocacy is not just about attracting consumers or building brand, it has operational implications as well.
What Can Companies Do About It?
We offer a few takeaways on how to strategically approach corporate advocacy.
1. Build a strong foundation from which to build a case for advocacy within your company. Gain support from employees, management, peers and other organizations to add multiple voices to your cause. Having this foundation will also enable your company to be ready to take advantage of timing (incredibly important in this fast-moving environment) and not miss opportunities to speak up.
2. Decide which issues align with your company’s core strengths, so that taking action makes sense for the business. A materiality assessment or business model map can help your company gain a broader view and consider how employees, consumers and other organizations view your company’s role in society and what is expected of it.
3. Ensure that all parts of the business that are involved are aligned on tactics that make sense for the company. Depending on the business activity and structure, different tactics will need to be employed, and different parts of the company will need to be involved to ensure the campaign is rolled out in the right way. For example, if an advocacy approach is planned through employees engaging with customers, employees will need to be briefed and on board.
4. Let different geographies and parts of the business customize their efforts. Global companies operate in varying political and social environments, and a single blanket approach may be less effective. Flexibility to customize enables different locations, business lines or brands to tackle issues that are most important, meaningful and impactful for them. However, a crucial consideration here is to ensure that different efforts across the company are not seen to conflict or contradict each other.
5. Build a company culture of sourcing ideas from different parts of the business. As mentioned in the previous section, employees want to work with companies that align with their values, and they will be advocates within the company if given the chance. These are important opportunities for the company to widen its radar and to pick up on social issues on which to lead.
Conclusion and Call to Action
We see corporate advocacy not as merely a tool for public relations or advertising, but rather, as an important part of building long-term sustainable business success. Sustainability is about taking the long view in the current landscape, building leadership and retaining credibility as a company that wants to make the world a better place.
By strategically incorporating corporate advocacy as a piece of the overall sustainability strategy, companies are much better equipped to navigate the landscape, build leadership and play an impactful role in society.
As companies continue to build out their sustainability strategies and set targets to do their part on reducing environmental and social impacts, corporate advocacy is crucial to letting stakeholders know that these actions are approached with sincerity and not driven solely with profit in mind. It is much harder as a company to say that striving to reduce greenhouse gas emissions is a priority if the company was not one of the many companies speaking out in support of the Paris Climate Agreement. Similarly, it becomes much more difficult to tell employees that the company cares about diversity if it was not part of the conversation around refugees and immigration.
By strategically incorporating corporate advocacy as a piece of the overall sustainability strategy, companies are much better equipped to navigate the landscape, build leadership and play an impactful role in society. Increasingly we are seeing companies rewarded for speaking out and acting upon their values.