The aftermath of the school shooting in Parkland, Florida, led to some real changes around guns in America — but it was corporations, not Congress, leading the way.
Dick’s Sporting Goods promised to end assault weapons sales. Walmart and Dick’s stopped selling guns to people under the age of 21. Delta, Hertz, and MetLife cut ties with the National Rifle Association. And the public called for more: Pressure mounted on Wall Street firms to divest their holdings in gun stocks. Andrew Ross Sorkin at the New York Times went so far as to suggest in February that banks bar sales of firearms using their products and services, essentially stepping in on guns where the government won’t.
The government and corporate America face of the same pressures on the gun debate — calls to change the age at which Americans can buy firearms, to strengthen controls on who can get guns, and broadly to take action to try to stop mass shootings in the United States. The past month has shown that corporate America is better able to respond — and that consumers are increasingly expecting it will.
It’s not just guns. Americans have come to anticipate that not only will companies act on political and social issues, but also that they will do so more swiftly than those in charge of public policy. Lawmakers have failed to address issues from immigration to health care and climate change — while corporate America, hardly a bastion of progressive values, has at least proven somewhat receptive.
Americans are frustrated with Congress, losing faith in institutions, and disapprove of how the president is doing his job. They might not be wild about big business, but they have unquestionable power in one arena: as consumers. In response to their pressure, companies are more willing than ever to take a stand.
But businesses are ultimately about making money, not about the public good. And while corporations can make some changes on their own — such as the Dick’s rifle policy — they often simply add their voices to the chorus pressing Washington to do something.
“When presented with government that is not responding to the desires of the citizenry, citizens are looking for other ways to change public policy,” Darren Walker, president of the Ford Foundation, a private philanthropy organization with a $13 billion endowment, told me.
But it’s not so easy. “It’s problematic to believe that the private sector can be a proxy for government, and so we need our government to be responsive to the citizenry,” he said.
Companies used to be afraid to weigh in on most political things
Typically, corporations have remained neutral on major political and social issues for fear of angering consumers or hurting their businesses, and they’ve specifically steered clear of getting too close to liberal causes.
The attitude was summed up in a (possibly apocryphal) quote from Michael Jordan in 1990, when the basketball legend, marketing his eponymous sneakers with Nike, reportedly refused to weigh in on a Senate race in his home state of North Carolina between a black North Carolina Democrat and a segregationist incumbent. “Republicans buy sneakers, too,” Jordan reportedly said.
But by 2017, when President Trump banned residents of seven majority-Muslim countries from entering the US, the shoe-selling calculus looked different. Nike CEO Mark Parker spoke out, saying the company “stands together against bigotry and any form of discrimination” and pledging to support those affected by the ban.
Times have changed, and businesses have become increasingly willing to weigh in and even act on social and political issues. They’re less worried that taking a stand will rock the boat and instead appear more concerned about the negative consequences of not doing so.
In 1991, the New York Times declared companies’ management of LGBTQ rights “the issue of the ‘90s” and noted most businesses just didn’t want to talk about it. “We don’t see a business need to sponsor organizations based on sexual preference,” Mary Lou Simmermacher, a spokesperson for Hewlett-Packard, told the publication at the time.
In 2013, Hewlett-Packard CEO Meg Whitman signed an amicus brief urging the Supreme Court to strike down California’s same-sex marriage ban.
“You’re going to be in the hottest part of hell if you try and stay neutral at this point. You have to take a position,” William Klepper, a management professor at Columbia University’s business school, told me.
Millennials and social media have pushed businesses to take a stand
What made companies like Nike and Hewlett-Packard begin to embrace civil rights issues rather than shying away from them? Mark Zuckerberg hasn’t suddenly become Mother Teresa. Instead, taking a stand is increasingly good for business — in part because consumers are demanding it.
Jerry Davis, a professor of management and sociology at the University of Michigan, recently identified two broad trends driving increased corporate social activism. First, social media and the internet have changed the environment for business, making it cheaper and easier for activists to join together and voice their opinions.
Before Twitter users were using the #BoycottNRA hashtag to get companies to cut ties with the NRA after Parkland, they were pressuring Fox News advertisers to drop Bill O’Reilly until the network forced him out. The online activist group Sleeping Giants has pushed numerous advertisers off the right-wing media outlet Breitbart. Grab Your Wallet emerged as a way for consumers to boycott Trump family products and has expanded to include other causes, such as pushing media platforms to drop NRATV from their offers.
“For a lot of people, this is a more approachable way into these issues like gun violence than traditional partisan politics,” Shannon Coulter, the founder of Grab Your Wallet, said. “What we’re seeing is that people are leveraging their direct relationship with brands more than they used to in the form of saying, ‘I won’t do business with your company anymore unless you take a stand on this.’”
Women have become an important driver of these trends, Coulter said. They have an enormous amount of power as consumers, influencing about 80 percent of all consumer spending in the US, but they’re not represented equally in government.
“They only hold 19 percent of congressional seats, so they know where their power is and isn’t, and they’re using the power they do have,” she said.
Millennials are also more attuned to a company’s “social value proposition” than previous generations, Davis found.
“There’s not a CEO of a major business today that can’t give you rhyme and verse what their core values are and what their code of ethics is that they apply in fulfilling those core values,” Klepper, the Columbia business professor, said. “When they find their alignment with a position that’s counter to those care values or ethics, then they have to stand up and say, ‘Look, we’re going to, for the most part, speak out here and remove ourselves from any kind of alignment with that.’”
Hence why so many CEOs followed Merck’s Kenneth Frazier and fled Trump’s advisory councils after his equivocal reaction to racist violence in Charlottesville, Virginia, last summer. The councils ultimately disbanded.
Corporate activism was on the rise pre-Trump — but Trump has accelerated it
Corporations coming under pressure to act on political and social issues — and taking action — were on the rise before President Donald Trump took office.
For example, Mozilla’s CEO, Brendan Eich, stepped down in 2014 just two weeks after he was appointed amid a controversy over a $1,000 donation he made to an anti-same-sex marriage proposition in California. Indiana in 2015 amended a religious freedom law after sparking outcry from the public and, in turn, businesses that it would allow for discrimination. The same year, there was a major movement to divest trillions of dollars from fossil fuel companies.
But in the era of Trump, things appear to have sped up. (Remember all those Super Bowl ads promoting diversity and tolerance soon after his inauguration in 2017?)
Dozens of companies filed court briefings and condemned the Trump administration’s proposed ban of immigrants from several predominantly Muslim countries. Apple CEO Tim Cook in a memo to employees said the company “would not exist without immigration” and declared, “It is not a policy we support.” Dropbox CEO Drew Houston called the ban “un-American.”
Executive orders affecting world's most vulnerable are un-American. Dropbox embraces people from all countries and faiths
— Drew Houston (@drewhouston) January 28, 2017
When President Trump announced plans to withdraw the United States from the Paris climate agreement, Tesla CEO Elon Musk and Disney CEO Robert Iger quit CEO advisory councils to him. Prior to the decision, companies such as Apple, Facebook, Google, Morgan Stanley, and Intel launched an ad campaign to encourage Trump to stay in the agreement, and even Exxon and Conoco said they supported the climate deal.
Patagonia and REI spoke out against the Trump administration’s plan to slash the size of two national monuments in Utah — Bears Ears and Grand Staircase-Escalante. Patagonia challenged the decision in court.
Corporate America has pushed Trump and Congress on immigration, and specifically, the Deferred Action on Childhood Arrivals (DACA) program, which protects some 690,000 undocumented immigrants who arrived in the US as children. Trump announced plans to suspend the program in September.
IBM, Uber, Facebook, and other big companies launched a coalition to ask Washington for a fix last year, and some 100 executives and CEOs sent a letter to Congress warning that cutting DACA would put “valuable talent” at risk.
“We’re seeing a trend away from the Milton Friedman/the only expectation is you make money, attitude toward seeing business as leaders in the community,” said Alison Omens, managing director at Just Capital, a nonprofit that measures and ranks American companies on social responsibility. “We’re certainly seeing a trend in a direction toward companies recognizing that they have a responsibility to be listening to all their stakeholders and valuing them, including their workforces as well as the communities they’re operating in.”
Americans are losing faith in institutions. But they expect businesses to act anyway.
Americans have long been losing faith in their institutions and find it hard to trust business, government, the criminal justice system, organized religion, and the news. According to Gallup, Americans’ confidence in 14 institutions was at 35 percent in 2017, up from 32 percent in 2016 but well below the 43 percent confidence registered in 2001, 2003, and 2004.
Business isn’t doing much better. In the 2017 Gallup poll, 21 percent of Americans said they had confidence in big business, 32 percent said they had confidence in the presidency, and just 12 percent said they had confidence in Congress.
But even if Americans don’t trust corporations any more than they do Washington, they are increasingly of the opinion that they should act to fix problems, or at least try. According to a recent Global Strategy Group survey, 81 percent of Americans think corporations should take action to address important issues facing society, and 77 percent say they have a responsibility to do so. For a measure of comparison, after the Parkland shooting, a USA Today/Suffolk University poll found just 19 percent of Americans expect Congress to act on gun control. Congress’s approval rating, according to Gallup, is currently at 15 percent.
After the 1999 shooting at Columbine High School in Littleton, Colorado, 32 percent of Americans believed parental involvement and responsibility were most important in preventing other such incidents; 16 percent said it was school security, and 12 percent said it was gun control laws. If anything, Americans blamed corporate America for the tragedy — namely, video game makers for inspiring the gunmen. Congress’s approval rating was at 41 percent.
“Whether it be at the federal or even state level, governments just in many instances are not representative of what might be the will of the people,” Klepper said. “They seem to be for the most part driven by other allegiances, and in these circumstances of tragedy, which we saw with the Parkland shooting, people want an immediate response.”
Which companies can, to some extent, provide.
But there are limitations. Private corporations are, first and foremost, about making money, and they can’t substitute all that the government does.
“Some people would like to believe that the private sector can act on behalf of the people broadly,” Walker, from the Ford Foundation, said. But he argued that isn’t the case: “The private sector, corporations, have stakeholders, and it’s a different set of stakeholders than government; it’s a narrower set of stakeholders.”
Amazon, JPMorgan Case, and Berkshire Hathaway teaming up for some mystery health care project might benefit some people — say, their workers — but it won’t fix Medicaid or stabilize Obamacare, which affect a lot more people. Nor are Jeff Bezos, Jamie Dimon, and Warren Buffett necessarily the best people to address America’s health care needs.
“My read is there’s a broad cultural reorganization in process, and it’s showing up in corporate PR,” Matt Stoller, a fellow at the Open Markets Institute, said in an email. “There’s no substitute for government.”