Companies are increasingly taking a stand on social justice issues, for reasons both moral and for profit, saying it’s in their best business interest to do so.
The May 2020 killing of George Floyd by a white police officer was a major catalyst. Some companies posted black squares on their social media pages for Black Out Tuesday, a social media event that sought to amplify Black voices. Some released statements of solidarity on their social media accounts. Some provided a platform for their Black employees to provide their experiences on being Black in America. And others revamped or adopted Diversity, Equity, and Inclusion departments, provided racial bias training, or implemented goals on hiring, retaining and promoting more Black employees.
Recently, with the implementation of the Texas anti-abortion law, some companies immediately got involved in fighting against the law. Uber and Lyft created defense funds to protect their drivers from lawsuits arising from transporting women to abortion clinics, and GoDaddy shut down a website that aimed to collect tips from anonymous users about women that received abortion services, and the people that assisted them.
In September, more than 50 businesses signed an open letter criticizing the Texas abortion law indicating that not only did it go against reproductive rights, but it was also bad for business, making it difficult to recruit talent from out of state and to retain employees due to a lack of reproductive well-being.
There are limits, however, as to how far companies will go – leaving them open to accusations of being disingenuous.
Earlier this year, corporations including Atlanta-headquartered Coca Cola and Delta Airlines said they didn’t support Georgia’s new voting law that placed restrictions on voter access. However, they also didn’t sign a statement released and signed by hundreds of other companies such as Amazon, Starbucks and Google condemning the law. This might be due to the political divisions the law created, and the fact that state lawmakers threatened to revoke tax breaks to Georgia-based companies coming out against the law.
This illustrates how even when companies attempt to be socially progressive — no matter how genuine and desirable their aims — the bottom line is what really matters. After all, public companies must first answer to their shareholders.
Portland, Ore. resident, Eboni Williams, feels that corporations involving themselves in social justice is insincere. “I think it’s corporations trying to pander to current trends,” she said. “There has not really been any intentional work done. Workers are still being underpaid, overworked, and jobs — especially high quality jobs — are not being made more accessible to those who truly need them.”
Malia Lazu, a lecturer at MIT Sloan School of Management and a Diversy, Equity, and Inclusion (DEI) consultant, sees both sides of the issue for businesses. “I think there’s some business leaders that are excited about this moment and want to lead in it,” Lazu said. “Then I think there are business leaders who want to greenwash or blackwash…pinkwash the performance of it.”
However, Lazu said this is a time for corporations to learn about the current social landscape as they may not know the commitments of social justice work and what it means. Being committed against police brutality is one thing, but having shareholder accountability is another. She said that this is a journey that might become more realized as millennials start entering the C-suite.
For companies that are serious about getting involved in social justice and social responsibility, creating a Corporate Social Responsibility (CSR) report not only helps with providing a framework and accountability, it also helps the bottom line. According to an article by Harvard Business Review, companies that follow through on a published Corporate Social Responsibility framework by participating in social-justice issues are more profitable than those that do not. The article, which cited a nine-year study by researchers at Texas A&M University in Corpus Christi of 240 firms within the Dow Jones Sustainability Index (DJSI), showed that firms exhibiting sustainable practices had higher gross profit margins and higher returns on assets than firms that were not part of the DJSI.
Since there is no single entity tracking and measuring a corporation’s social responsibility goals, more in-depth analysis is needed. A good article that showcases this is an August 23 Washington Post piece, which explored whether corporate America was fulfilling its pledge to racial justice by investing in social institutions, and where and how they allocated their funding. It demonstrated that some pledges were for the best interests of Black Americans, such as those from Bank of America and JP Morgan Chase who are allocating loans and investments, in the way of mortgages, that they can in turn profit from. As Phillip Atiba Goff was quoted, “Corporations are not set up to wield their power for the greater good… they are constrained by things they feel they need to do to manage their brand.”
Therefore, one thing journalists can do is to be familiar with companies’ Corporate Social Responsibility reports, how to interpret them, and – more importantly – follow up with companies on compliance. It’s important to look into if corporations are keeping up with the promises that they make.