Nike, Ben & Jerry’s, and Levi’s are all profitable companies. They are also well-known brands. But they share another trait: recently, each company has taken a stand on a polarizing political issue. Ben & Jerry’s declared its support for the Black Lives Matter movement. Levi’s pledged its support for gun control efforts. And in one of the most polarizing moves of all, Nike recruited quarterback Colin Kaepernick to star in its most recent ad campaign.
Businesses often talk about “corporate social responsibility.” In fact, the Harvard Business Review reports that 92 percent of companies have engaged in social responsibility initiatives. Yet, for most corporations, corporate social responsibility is limited to supporting uncontroversial causes. But increasingly, businesses are taking political stands on issues that might cost them customers, market share, and revenue. This post will consider the costs and benefits of addressing social justice issues.
Corporate Social Responsibility: Who is Taking A Stand?
According to experts, more companies are taking stands on political issues. Several factors are driving this trend. According to some experts, the current political climate has pushed companies to act. Every organization has values. Some businesses believe that the current administration’s actions do not align with their values. For these companies, remaining silent is not an option.
Consumers are also driving companies to take a stand. According to Forbes magazine, 91 percent of millennial employees expect the companies they work for and buy from to support their values. While millennials might have the strongest preference for political companies, they are by no means alone. A recent poll found that globally, 57 percent of consumers will boycott a brand that takes a position contrary to their beliefs. But the same study found that 65 percent of customers would skip brands that remain silent on social issues. Another study found that consumers are more likely to support brands that take positions on issues. Clearly, customers want their companies to support their values.
Should a Corporation Take a Stand?
Even though the number of politically active corporations is increasing, companies should be aware of the costs and benefits. Some argue that corporate social responsibility initiatives distract companies from their primary mission: making money. Indeed, some studies have found that social responsibility initiatives can hurt a company’s bottom line. Companies that speak about divisive issues risk losing customers.
However, there is an upside to corporate social justice. Other studies have found that companies can “do good and do well” at the same time. Nike is just one example. Though some people protested, grumbled, and threated to boycott the shoe company after its Kaepernick ad aired, these threats made no difference. The most recent reports indicate that Nike’s profits have soared over 30 percent since the backlash began. So, losing customers is not inevitable.
How Corporations Can Take a Stand
As the prior section noted, the evidence is split on whether corporate social responsibility or social justice initiatives help or hurt companies financially. As such, the difference between success and failure often lies in how the company takes its stand. While there is no one correct way for a corporation to make its position known, two factors help companies create successful political campaigns.
First, the company’s interest in the issue should be sincere. A company’s decision to “go green” helps when it is motivated by the environment. The same decision hurts when it happens immediately after the company has been accused of illegal dumping. By the same token, a company should not taut its position on gender equality if it has failed to hire and promote women. Consumers will sense the hypocrisy and run from the brand. Companies should take action that aligns with the stand they’ve taken.
Second, the company’s message should be clear. Companies should avoid pandering to both sides of an issue. A few years ago, Pepsi used Kendall Jenner in an ad. Surrounded by protestors and police, Jenner diffused the tension between the groups by handing the officer a Pepsi. Because the ad lacked a clear message, it failed to generate new customers and also offended many African Americans. Groups criticized the company for apparently trivializing the serious issue of police brutality. If Pepsi went into the project with good intentions, those intentions were absent from the final product. When a company wants to take a position, that position should be obvious to anyone who views the marketing of the idea.
Today’s markets are complex. Today’s consumers are full of unspoken expectations. But businesses can create successful corporate social responsibility programs that are effective and profitable. To learn more about social justice and other issues relevant to today’s companies and consumers, please enroll in the Equity Toolkit e-courses. The Equity Toolkit is an interactive, four-course online series containing essential, research-based concepts on Equity, Diversity, and Inclusion.