At the Foundation for Economic Education, Jon Miltimore explains why many major US corporations are reconsidering their earlier “all in” approach to lecturing their customers about progressive causes:
Bud Light’s brand ambassador, Dylan Mulvaney, whose antics triggered a consumer boycott that cost the company over a billion in lost revenue.
DEI is just one form of corporate social activism, which comes in various forms and includes its cousin Environmental, Social, and Governance (ESG). Both ideas fall under, to some degree, Corporate Social Responsibility (CSR), the idea that corporations have a duty to take social and environmental actions into consideration in their business models.
If you’re wondering why Burger King has commercials on climate change and cow farts, and why Bud Light’s commercials went from featuring Rodney Dangerfield and Bob Uecker to trans activist Dylan Mulvaney, it’s because of CSR.
The idea that corporations should fight for social causes has skyrocketed in recent years to such an extent that activism is inhibiting companies in their primary mission: generating profits by serving customers.
“Firms leveraging situations and social issues is not new, but showcasing their moral authority despite a disinterested consumer base is,” Kimberlee Josephson, an Associate Professor of Business at Lebanon Valley College in Annville, Pennsylvania, has observed.
Bud Light’s decision to feature Mulvaney cost them an estimated $1.4 billion in sales, and it revealed the danger of corporations leaning into social activism, particularly campaigns and policies that alienate their own consumer bases.
Not very long ago, companies like Chick-fil-A faced backlash from progressive activists for supporting traditional marriage. Culture war advocates on the right have responded in similar fashion.
Conservative influencers have made a point of raising awareness around “woke” corporate initiatives — white privilege campaigns, climate change goals, LGBTQ events, etc. The most successful ones, such as Robby Starbuck who pioneered the campaign against Tractor Supply and John Deere, made a point of targeting corporations with conservative consumer bases.
“If I started a boycott against Starbucks right now, I know that it wouldn’t get anywhere near the same result,” Starbuck recently told the Wall Street Journal.
One can support Robby Starbuck’s tactics or oppose them. What’s clear is that corporations increasingly face risks for participating in social activism campaigns, and the threats now come from both sides of the political aisle.
Respectful neutrality on cultural issues used to be the default way for companies to avoid insulting the general public and potentially alienating customers. Under the influence of DEI/ESG/CSR advocates, corporations were persuaded that they could offend half of the population without suffering any meaningful financial losses. That turned out to be untrue.
