Analysis: Millennials and global consumers push U.S. companies to get political
02/04/2021 11:00
By Ross Kerber and Jessica DiNapoli
BOSTON/NEW YORK, April 2 (Reuters) - A push to attract young
and diverse talent and global consumers is behind some of
corporate America's willingness to speak out on politically
charged issues like Georgia's new voting law, executives and
corporate governance experts said.
Georgia's decision last month to strengthen identification
requirements for absentee ballots and make it a misdemeanor to
offer food and water to voters waiting in line, among other
changes, drew condemnation from many U.S. companies this week,
including Microsoft Corp MSFT.O and Citigroup C.N .
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A number of companies say it disenfranchises some voters.
Some, such as Delta Air Lines DAL.N and Coca-Cola Co. KO.N ,
are based in Georgia, where state lawmakers have the power to
raise state taxes. Delta CEO Ed Bastian said in a public memo
that his decision to speak out was informed by discussions with
leaders and employees in the Black community.
The companies criticizing the law so far represent a sliver
of the U.S. business landscape. Yet they are part of a growing
group of companies shedding their reluctance to speak out on
politically controversial social issues that matter to many of
their employees and customers globally, business leaders
interviewed by Reuters said.
"Young people want more than words, they want action,"
Debra Lee, the former chair and CEO of BET Networks, a TV
network owned by ViacomCBS Inc VIAC.O , said in an interview on
Thursday. ViacomCBS has also criticized the Georgia law.
A new focus from investors on environmental, social and
governance issues such as climate change and the Black Lives
Matter and #MeToo movements has also emboldened companies.
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Recent examples range from companies criticizing former
President Donald Trump's claims of election fraud, to Washington
Redskins football stadium sponsor Fedex Corp FDX.N asking for
a team name change. Retailers Walmart Inc WMT.N and Dick's
Sporting Goods Inc DKS.N , for example, have adopted new
restrictions on gun sales following mass shootings.
Some companies that are reluctant to criticize specific laws
or policies are still willing to come out with more general
statements. For example, roughly 330 of the 500 companies in the
S&P 500 Index issued comments last year in support of social
justice in the wake of the death of George Floyd, a Black man,
in the custody of Minneapolis police, according to shareholder
advocacy group As You Sow.
This approach, however, does not always appease activists
looking for bigger change. Olivia Knight, the group's racial
justice initiative coordinator, said companies often did not
follow up with any action, and that many were limited to vague
statements of support.
"I don’t think we can make the assumption the corporate
world is a pot of social justice advocacy and should be looked
to for guidance on these issues," she said.
On Thursday, Reuters reported that Ford Motor Co's F.N
political action committee is resuming making political
donations. It said it will not rule out making donations to
Republican lawmakers who voted against President Joe Biden's
election certification on Jan. 6. urn:newsml:reuters.com:*:nL1N2LU2KQ
Former American Express Co AXP.N CEO Ken Chenault, who
co-authored a letter with other Black business leaders this week
calling on companies to condemn the Georgia voting law, said in
an interview that some firms may be hesitant to speak out for
fear of appearing partisan.
But he noted that more than 60 big U.S. companies recently
signed a statement opposing state bills focused on sexual
orientation, showing a willingness to weigh in at least on some
topics. In the battle on voting bills, "we are in the early
stages," Chenault said.
WORKERS AND CONSUMERS
Speaking out against politically sensitive issues can be
risky. Shares of some western apparel companies declined after
they faced boycotts in China over their statements expressing
concern about labor conditions, amid investor worries they would
lose access to a vast, growing market. However, companies that
spoke out against the Georgia voting law saw little impact on
their share price.
Shivaram Rajgopal, a Columbia Business School professor who
follows corporate cultural issues, said corporate America is
focused on satisfying its skilled young workers, who are getting
more politically active on social media.
"The younger workforce expects you to take a stand on these
social justice issues," Rajgopol said.
A 2019 study by the Pew Research Center found members of the
U.S. generations known as Millennials, born between 1981 and
1996, and Gen Z, born after 1996, share more liberal attitudes
than older generations on a range of issues, such as favoring
more racial diversity and activist government.
"If we are not speaking up against these voter
suppression efforts, we're really taking a chunk out of
ourselves and who we are as aviation," said Sara Nelson,
president of the Association of Flight Attendants, speaking at a
U.S. aviation summit on Wednesday.
The views of global customers and investors also matter more
to international conglomerates like Coke and Delta than local
politics, said Ric Marshall, executive director at
sustainability ratings firm MSCI.
"Management at these companies is much more beholden to this
broader stakeholder group," Marshall said. Conversely, companies
that have said less about voting rights could be wary of
alienating a more domestic customer base, he said.
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UPDATE 6-Walmart joins Dick's Sporting Goods in raising age to
buy guns https://www.reuters.com/article/us-usa-guns-dicks-sporting/walmart-joins-dicks-sporting-goods-in-raising-age-to-buy-guns-idUSKCN1GC1R1
Generation Z Looks a Lot Like Millennials on Key Social and
Political Issues https://www.pewresearch.org/social-trends/2019/01/17/generation-z-looks-a-lot-like-millennials-on-key-social-and-political-issues/
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(Reporting by Ross Kerber in Boston and Jessica DiNapoli in New
York; Additional reporting by Tracy Rucinski in Chicago; Editing
by Greg Roumeliotis and Dan Grebler)
((ross.kerber@thomsonreuters.com; (617) 856 4341; Reuters
Messaging: Ross.Kerber.Reuters.com@Reuters.net))