Corporate Activism. Why is this a thing, and what does it mean for us?
Yesterday the yearly Gay Pride canal-parade took place in Amsterdam. When cycling around the route, I was surprised with how much of a corporate event it has become. Companies like Ernst and Young, Shell, ING, Uber are visually very well represented with billboards, boats, and flags. It appears that these companies are all companies that are very much concerned with LGBTI+ rights.
However, these are the same companies that are actively lobbying against climate changes regulations(Shell), have been involved in fraud during downfall of the lehman brothers (Ernst and Young), facilitated the money laundering of billions of euros (ING), and structurally underpaying its drivers (Uber).
So I wondered what motivates these same companies to become corporate activists for LGBTI+ rights, and in general what motivates companies to take a more activist stance in social issues, and how should we feel about that?
In order to better understand these questions, I’ll first take a look at how activism around social issues generally works.
Activism in it’s essence are acts that aim to change the current state of society into a desired state of society. There are various ways of being an activist including demonstrating, boycotting, changing public opinion, company policies, company donations and many other forms. I’ll look at the gay rights activist movement as an example, to create some context for understanding activism better.
Being openly gay in the 60’s was very difficult in most western countries. Gay people were openly discriminated against, faced a lot of violence and being gay was considered a mental illness.
Through decades of activism and hard work of various gay rights movements, public perception of gay rights has changed and today I think its fair to see gay people are better off in most western countries. (although there’s still work to be done)
In relation to the activism, we have established two points in time, being gay in the 60’s(the initial state), and being gay today(current state).
At some moment in between these points the public perception about gay people has shifted significantly. This means that at some point there must have been a tipping point. At this point the views on gay rights that previously were ignored, suddenly were becoming part of the more established ideas in society and appeared to be on the winning side of history.
Now back to the corporate activists, what types of corporate activists are there?
Category 1: When a company joins a social cause
What type of corporate activist you are partly seems to depends on when you decide to become an activist as a company. In my brief research on corporate activism, I see most companies support an activist cause far after the tipping point of public perception. These companies hold still until it’s generally accepted to fight for a certain cause, and only then will stand up for what’s right. To me it feels a bit like they enlist for the army as soon as its pretty clear that the war is going to be won.
Most companies seem fit this victory-driven category. Joining the gay pride in Amsterdam as a company in 2019 seems to fall into this category. The battle for LGBT rights has the support of the vast majority of the country, especially in Amsterdam.
The other category of corporate activists, then must contain companies that support activist causes that don’t have large support in a society. For example in Poland gay rights are very much under pressure at the moment. With recent attacks on the gay pride in Bialystok, and having a government that is explicitly anti-gay, gay-rights seem to be on the losing side. However, I couldn’t find a single advertised corporate banner in Poland’s pride festivities from the same companies that are fighting for gay rights in Amsterdam.
A company that is openly active in Poland for gay rights, is Ben and Jerry’s. Last year it sponsored a controversial monument in the center of the city, after it had been vandalized various times before. For Ben and Jerry’s this is not something very uncommon, as they have been quite active in their support of gay rights since the 80’s, when the battle was far from won.
Companies that are fighting a battle far from won I call value-driven.
It’s seems very important to make this value-driven vs victory driven distinction, as the first group in general has a much higher risk involved with its actions as there is no broad support in society for their mission.
Category 2 : Why a company joins a social cause
The second variable that categorizes a corporate activist, I believe has to do with what interests a company has in becoming involved for a social movement.
Corporate activism , as you might have guessed, is not purely idealistic. In my career working with corporates, I’ve noticed two very important financial reasons to become a corporate activist as a company.
Firstly there is the employer branding factor at play. In 2025, 75% of the global workforce will consist of millennials that really care about social issues. Out of the US millennials, 76 percent consider a company’s social and environmental commitments before deciding where to work.
As a corporation it’s incredibly important to be able to attract and retain top talent. Your corporate activism is seen as a way to achieve this. While fighting for a social cause, most companies make sure they get to be in the spotlight and this helps them to convince people that their company is great to work for. If well executed, this has a lot of financial value for a company and partly is the reason for the surge of corporate activism.
Secondly there’s simply sales. Particularly for companies making consumer products, its incredibly valuable when people are spreading your corporate activist message for free because of an activist message. For example, take Nike’s campaign with american-football player Colin Kaepernick. Kaepernick was a topic of national discussion after kneeling during the national anthem. This campaign immediately went viral with 24M views on YouTube alone.
Even though some people started to burn their Nikes after this campaign, online sales from Nike rose 31% that week. To quote Marketing Officer Aaron Goldman from 4C on this choice of Nike to support a somewhat controversial figure:
“You can be darn sure that Nike has done its research and knows what will move its product and who this campaign will resonate with”
In the Nike case what seems to be a choice of “taking a stand”, to me seems to be more of a clever and well-calculated business decision. It looks like the values of Nike’s executives seemed to align with what made business sense, and therefore the activist stance was actively chosen.
Also, it might appear that the stand that Nike takes is controversial among the average American, but it very likely isn’t among its most important consumer groups (Millenials and Generally more liberal ).
Nike in this isn’t alone, corporate activism appears to have become a very strong tool for corporates in gaining the loyalty of customers. Some facts:
- 87% of Americans will purchase a product because a company advocated for an issue they cared about
- 73% of millenials is willing to spend more on a brand if it comes from a sustainable brand
- 81% of millennials expect their favorite companies to make public declarations of their corporate citizenship.
Being an corporate activist, seems to make business sense in many cases, particularly if your company is reliant on a strong brand. This largely explains the growth in corporate activism in the recent few years.
The opposite of this dollar-driven Business Inspired Activism, would be to take activist action that actually hurt your own financial results. Ethically Inspired Activism. An example would be companies that purposely don’t use tax havens to minimize their taxes. They are accredited under the Fair Tax Trademark, and pay their fair amount of taxes. (I know, what world do we live in when paying normal taxes is seen as activism). Most of these businesses effectively lose money by not minimizing taxes via tax-havens, and don’t have a big upside from brand recognition.
If we put these different corporate motivations on a spectrum, we get the following image:
To summarize the whole, we have two spectra:
- When do you join a social movement, before or after the tipping point of social acceptance?
- Does your activism make business sense, or does it hurt your business?
If we then combine the two spectra we get the following matrix:
If you’d fill in this matrix with nice sounding names for each archytype, you’d have the progressive businessman on the left botton corner, the join-the-winners corporate on the botton right side, the visonary idealist in the top left, and the idealistic follower in the top right
When I look at corporate activism in the media, my own experiences and hours of googling, all I can conclude is that basically all large corporates either fall into the Join-the-winner or the progressive businessman category.
How should I feel about these corporates being activists?
The reality seems to be that most corporates are join-the-winners corporates. This position is low risk because the position largely is in tune with the the ideas of largest part of society and therefore makes business sense for the company. You as a company can roll out the activist vision of other people who had to do the hard work, while benefiting from the positive attention as a business. However, if this type of activism is done in an honest way, the effects appear to be that activist ideas become mainstream faster. Because corporates have deep pockets that have nationwide reach,they could help your cause reach millions.
A good example I think is the Black Panther movie made by Marvel (owned by Disney). Marvel clearly is riding the momentum of the wave of black civil rights movement, and does so for financial gains (1.4 billion dollar box office revenue). The result of this movie is that around 175 million people are exposed to positive black role models in film, and I believe this does have a significant impact on the mission to fight negative black stereotypes.
A bad example I found is Shell, who currently is setting up various initiatives around sustainability, while simultaneously spending millions of dollars on lobbying against climate change policies. This is a textbook example of greenwashing where Shell wants to be perceived as the hero in climate change but at the same time actively is sabotaging it. The effective impact Shell creates is negative, and is simply hurting the social cause.
The rest of corporates that don’t fall into the above category, I largely consider to be idealistic followers. The amount of companies that dare to touch these pre-tipping point issues is significantly smaller, as there are more people you can upset who might stop buying your product. What we often see is that companies that have a progressive client base, dare to join in on these pre-tipping point social movements. The Kaepernick Nike campaign is a good example of this, where the end goal still was making money, but it also fitted really well with a social cause that their key customer base largely felt connected with.
Both of these corporate groups are often vilified by activist because their hearts seem to lie with the dollar, not with the cause. But in some cases they actually seem to make a significant difference for a social cause. Their moral motivations are definitely not pure, but that does that have to matter if the end result is a significant positive outcome for a social cause?
At the same time I worry we’re blurring the lines between good companies and companies that are actively destroying the world. A big trend seems to be that companies with a bad reputation due to their previous actions (Shell, Uber, ING) try to improve their reputation by doing good in other non-related fields. I think we can should stay very critical of these players, and always keep the bigger picture in mind to what a company does to a society in general. To put it very bluntly:
If you act like an asshole 95% of the time, and do good stuff 5% of the time, you are still an asshole and people probably shouldn’t buy your products or go work for you.
To me it was a important realization that the reason why companies are becoming more activistic in the first place, is because we as consumers and employees are starting to reflect our beliefs in our actions when buying products and choosing an employer. This means we have some influence.
So what does that mean for me as a consumer and employee?
For me personally it means that with this influence, I now also have a duty to start looking even more critically at the various corporate activists. Even though I think almost all companies are solely business driven, we now face the difficult challenge to see who is contributing to society, and who’s actively breaking it down.
Thanks for reading,
I’d love to hear your ideas and feedback on this piece, it helps me become a better thinker and writer.