Branded is a weekly column devoted to the intersection of marketing, business, design, and culture.
For many years, most companies tended to steer their brands clear of divisive “culture war” issues. After all, taking a stand on some social matter might alienate a significant chunk of potential customers. But that’s been changing for a while, and these days it’s starting to look impossible. The latest source of pressure: activist shareholders—including a growing number who are, ironically, motivated by a belief that businesses have gotten too ideological.
The number of proposals challenging companies’ social or environmental practices and submitted for annual shareholder meetings scheduled before the end of May reached a record 74 this year—more than five times the number in 2019. That’s according to ISS Corporate Solutions, which advises companies on governance and sustainability programs. For example, The Wall Street Journal cites a shareholder proposal that drug giant Eli Lilly, which came out against Indiana’s harsh abortion law, issue a report “on the risk of supporting abortion,” as well as a separate proposal targeting Mastercard’s (paused) plans related to implementing a gun-merchant sales code. Other proposals involve “discouraging companies from implementing climate or social initiatives such as [greenhouse gas] emissions reductions or increasing” diversity, equity, and inclusion efforts, ISS reports.
The data squares with the rise of a noisy, politically driven opposition to the decades-long trend toward an investor focus on environmental, social, and governance issues—ESG, for short—that is now most often associated with the huge asset manager BlackRock. As Fast Company‘s Clint Rainey noted earlier this month in his in-depth investigation into the anti-ESG movement, it’s a growing crusade that’s both well-funded and well-organized. Attacking ESG as an affront to and distraction from capitalism’s function as a delivery mechanism of shareholder value has become a popular right-wing stance; Vivek Ramaswamy, author of Woke, Inc., has channeled that sentiment into a long-shot presidential bid.
But that’s only part of the picture. Because despite this apparent evidence of an ESG backlash, ISS notes that social-oriented shareholder proposals are also at an all-time high (239 proposals). Environmental proposals are close to a new record, too (128). In most cases these proposals are submitted by groups or individuals with a small number of shares, so the gesture is mostly symbolic, not a serious threat to corporate control. But the upshot is that one of the core rituals of the capitalist marketplace—the shareholder meeting—has become yet another site for squabbling about how corporate behavior and sociocultural issues intersect. And that’s the latest reason that even companies that would prefer to sidestep the culture wars altogether need to think about what their brands stand for.
Of course, some brands like Ben & Jerry’s and Patagonia have long had social or environmental perspectives baked in. In 2020, the murder of George Floyd and its aftermath pushed many more brands to make overt, if carefully calibrated, statements against racial injustice, however awkwardly. And even then, some shied away; and in the years since, many have returned to the safer-seeming ground of cultural neutrality—despite the fact that the culture has become more and more fissured.
The acceleration of ideology-driven shareholder proposals, basically demanding that businesses, and thus their brands in effect, take pro or con stances on a range of issues from diversity to abortion to climate change, just underscores broader trends. Whether it’s Florida governor Ron DeSantis exploiting a conflict with Disney over gay rights or M&M’s becoming a Tucker Carlson foil for making its spokescandies too woke, brands have become fair game in a range of political squabbles. (The latest target: Target, being criticized after pulling some merchandise related to Pride Month, following what it says were threats to its workers.) And that has changed the equation around what a brand will or won’t stand for, or oppose.
“I’d say neutrality isn’t really a viable option,” Marcus Collins, head of strategy at Wieden+Kennedy and author of For The Culture: The Power Behind What We Buy, What We Do, and Who We Want to Be, recently told Fast Company. “This is about conviction. What are you willing to stand for? Those are the things that are center to who we are in the world. The brands which stand with conviction, whether you like them or not, at least you respect them. Otherwise, you’re saying that you don’t stand for anything and would rather have a transactional-based relationship with your consumers.”
Collins wasn’t responding to recent developments—in fact, he was making a more timeless point about how brands interact with culture—but the argument he makes is becoming ever more important for businesses trying to figure out how to navigate the escalating culture wars.
The incursion of ideological tests into shareholder confabs is just another new data point, but an undeniable one: Companies and their brands are not only expected to take cultural stands, they will ultimately be forced to—whether they want to or not. Even if they quash such issues at the shareholder level, they should take the challenge as one that will emerge in the actual marketplace, possibly when it’s least expected. And saying you didn’t intend to be in the middle of American divisiveness clearly doesn’t cut it.
Brands have always been potent cultural material, even when they studiously avoided conflicts and controversy—from Ford to Apple to Walmart to McDonald’s to Hermès, they have distinct meanings built over time and resonant with millions. So it should be no surprise that culture warriors in an increasingly divided political discourse would seize on and try to exploit brand power and familiarity to advance their own agenda. Anti-LGBTQ+ groups have discovered it’s more effective to attach their message to an attack on a brand that everyone has heard of, or its corporate parent.
So brands and businesses of all sorts are facing choices. The Los Angeles Dodgers just made one, apologizing and reversing course after initially rescinding an invitation to a prominent LGBTQ+ organization to participate in a Pride event. Others will have to make choices, too, as the culture wars force a range of issues. That’s the latest reason for brands to realize that they can’t stay neutral, no matter how much they want to.