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Who does not activate does not earn

The brand activism’s implications in our society

26/11/2021

This article is part of a divulgative and investigative journalistic project developed from the collaboration with Greenpeace ItaliaVersione in Italiano
Versión en Español

 

Requests from all sides 

For younger generations, everyday interaction with brands and companies is inevitable, and has become a habit.. In a hyper-capitalized context the key to corporate profit is maximum interaction between consumer and company, both on and offline. 

An ongoing relationship between these two actors produces demands from both sides: citizen-consumers require the development of ethics by corporations, which then undertake programs to be more socially and politically engaged. However these programs often overlap responsibilities that belong to the government or state.. 

As a result the company has greater responsibility, because of the wider scope available, and the use of marketing techniques – such as Corporate Socio-political Activism (CSA) – that support evolving social needs. 

The underlying motive of the company’s social commitment hasn’t changed. Social issues are on the agenda for corporate boards of directors to help optimize profits and survive in the marketplace. 

The role of the company, however, is altered by this overlap of public-private tasks, so that the corporate departments are pushed to deal extensively with public affairs: a very noble intent, that nonetheless involves numerous problems and contradictions. 

From purpose to action 

Brand activism is a very recent phenomenon. Sources indicate its first appearance around the mid-10s of the 21st century. Kotler and Sarkar, the authors of “Brand Activism – From Purpose to Action”, the 2018 book that first brought the term into common language, describe it as “a business model in which the company and the brand not only operate as market players, but also act as promoters of the processes of change required by modern society thanks to their active role in a varied system of demonstrations or initiatives.” The spread of a climate of mistrust towards the governments in charge of solving environmental and civil emergencies, has paved the way for the evolution of the consumer’s role. Institutional inertia coupled with rapid advances in technology mean that role has gained significant value. 

Digital channels and social media, acting as sounding boards, have multiplied the possibilities for debate: the role of the consumer has become active. Criticism, responsibility and attention to the consequences of purchasing choices have begun to guide this evolution: in this direction, even if on a small scale,consumer s believe they can contribute to the evolution of social reality.

The demand on companies is not only for action with a generic social or humanitarian value, such as, for example, the creation of common resources or investments in health research, but also for a well-defined position regarding the socio-political issues of the moment, and the implementation of initiatives in that direction. 

The first action is part of what the literature calls Corporate Social Responsibility (CSR), and according to a study by professors Charles Kang, Frank Germann and Rajdeep Grewal, it is defined as the system of “corporate actions aimed at doing social good beyond what is formally required by law”. 

The second action is referred to as Corporate Sociopolitical Activism (CSA). The main difference between the two is the space they occupy. CSR is about sharing: the focus is part of the social panorama, and is accepted by the majority, such as the investment of company resources in favor of the right to education. 

CSA, on the other hand, is more polarizing: the social response is more likely to be dichotomous, and passionate, as can happen following a corporate pronouncement on homosexual rights. The outcomes of these actions have inherent uncertainty; everything depends on the level of agreement demonstrated by the stakeholders – meaning everyone who comes into contact with the CSA operation: clients, employees, government bodies – with their system of values. The advantage of a CSA action often lies in the fundamental simplicity of its implementation, at least when it takes the form of a statement, an open letter, a communiqué, an advertisement, and therefore in the limited economic investment allocated to the cause. 

Consumers are always right 

Despite the fact that the risks of a CSA action are greater than those of a CSR, the former has become a widespread subtext in global advertising. In a recent study authored by a research team led by Professor Yashoda Bhagwat of Neeley University, the reasons for this were investigated by analyzing 293 CSA actions, performed by 149 brands or companies in the USA 

The results show the response to CSA events in terms of sales performance and investor reactions in terms of the degree of deviation from the values of various stakeholders. What emerges is that, in general, alignment with all stakeholders is not important; alignment with consumers is sufficient. In general, «The results suggest that there are many cases where companies can engage in CSAs and reap financial rewards even when they are not aligned with all of their stakeholders. These benefits can increase share performance, sales growth, or both.» 

This response shows that CSA actions need only align with consumer values. All other stakeholders will be satisfied by the positive response from lenders, stakeholders, and sales even if they don’t agree with the action because the action will still be profitable. This is where the business world and the socio-political world are aligned. 

Public-private domain

In Governments, procedures can be complex and cumbersome whereas company communications can be more dynamic and innovative. 

These two institutions ‘public’ and ‘private’ have different but potentially compatible roles. The government’s simple purpose is to support community needs. They address issues outside of the market. Corporations, however, are focussed on profit, and they are able to pivot towards profit when needed. 

These two groups converge where consumers demand that corporations undertake social responsibility, and it’s in the corporate interests (is profitable) for them to do so. 

Conversely and ironically, while a president might be seen as the CEO of a nation, they are driven by populism and visibility. This means their role is addressing partisan issues is reduced. 

This ability of companies to respond, and interconnection of profit and politics means that the relationship between consumers and companies is tight, even when a company’s values are called into question. They can adjust internal policies and respond effectively, they can even 

supply alternative policies to governments, and become a promoter of justice on behalf of consumers. 

«Companies identify their consumers’ sensitivities on these issues as well; on the one hand, they try to leverage needs that are increasingly manifested, and on the other hand, they try to build on them, intensifying them or producing them from scratch, because communication also manages to produce needs and desires», Giovanna Cosenza, professor of semiotics at the University of Bologna, tells Scomodo. 

This technique isn’t new, but it is effective, as shown by the Edelman Trust Barometer 2021 report, that says in 18 of the 27 states considered, the trust of citizens resides more in corporations. 

The phenomenon has a substantial reach. According to data from the French corporate communication consultancy HAVAS, 55% of consumers believe that companies have a more important role than governments in creating a better future, and 77% prefer to buy from brands with whom they share values. Among those belonging to the Baby Boomers generation (those born between 1946 and 1964), that percentage stands at 63% and for Generation Z (born between 1995 and 2005), the figure rises to 87%. According to the Ipsos Italia Civic Brands Observatory, 63% of respondents believe it is right that brands and companies, in addition to selling products and services, should act personally with respect to relevant social issues. 

The best synthesis is that of Richard Edelman, CEO of the eponymous communications agency: «Brands are now driven to go beyond their classic commercial interests and become activists […].» Thus, the social behavior of the company becomes a decisive variable in purchasing decisions: «[…] a purchase is based on the brand’s willingness to live its values, act with determination [according to them] and, if necessary, head towards activism». This proves that there is a need for the company to solidify their values in coherent actions, in order to support the ethical framework on which the purchase choices of consumers are based today.

Outside the borders 

Brands that use innovative, alternative advertising and communication campaigns and that are willing to engage in divisive social matters are seen as problem solvers. They can also address issues that might normally be considered public, or government matters. Despite the risk of exposure to public opinion, and aligning with potentially controversial viewpoints, brands become a key player, offering support to the causes that are important to their customer. 

Brands are also less susceptible to criticism than government bodies, they are not held to account in the same way, they have more flexible means of communication and a meaningful social reciprocity with the consumer. These attributes mean it can be a more complex and less definable entity than the political representative. Nevertheless it is crucial to remember an essential point: companies are not intrinsically democratic bodies, and consequently they do not have a value system which is comparable with democratic values. Theoretically, it would be up to the State to define the boundaries of action of the private interest so that it fits into a framework that optimizes public utility, but often the resources available to the public, and their use, fail to benefit from the coexistence of liberal economic systems and democratic states. 

Brands are replacing the concept of complementarity between majority and minority, with that of profit based on most consumers’ requests: it does not debate citizens’ needs with citizens, but it pleases consumers, carefully studying their behaviours. Consequently, social demand that potentially leads to greater profit is the one that the company will respond to, while minority issues will be marginalized, considering the corporate profit priority that defines the dominant social agenda. 

Polymorphous Airbnb and the Greenwashing files 

Airbnb – the famous platform that connects people looking for short-term accommodations with others who have rentable space – is a company with widespread expansion, and its resourcefulness in the sociopolitical arena can be seen in many initiatives. Von Briel and Dolnicar, researchers at the University of Queensland, in “Activism, lobbying and corporate social responsibility by Airbnb – before, during and after COVID-19”, illustrate how the company is engaged in socially responsible initiatives, among many: encouraging students to achieve a better education, even issuing some scholarships; donations to the government to help homeless people; the Open home program in order to use its spaces for people in need. Alongside these activities, there are lobbying actions: financing of electoral campaigns; strategic collaboration with administrations and – an exemplary case that confirms what has been said so far – the Airbnb Policy Tool Chest website: a space that suggests to legislators how to better regulate short-term rentals. 

The public and the private overlap, means the company establishes itself not only as a spokesperson for social issues, but intends to suggest legislation, taking the reins. Finally, Airbnb has taken actions that can be categorized as CSAs, such as activism regarding same-sex marriage equality, or donations in support of the Black Lives Matter movement. A

survey by the same authors, confirms a distinction in knowledge about various activities by stakeholders. Hosts are much more aware of these activities than platform guests, and CSR activities are also more exposed than CSAs. For example, when asked «Did you know Airbnb has been lobbying to fight homelessness?» The percentage of knowledge is 42% for the host category and 7% in the guest category. 

Another relevant point is the trajectory of initiatives based on corporate activism: in 2017 there was significant implementation of such activities, up to decay to near-invisibility. In 2020, with the healthcare emergency – which, among other things, caused the company a $1 billion loss – CEO Chesky says the company’s future is being rethought, arguing for a return to its roots. In an interview with Bloomberg, he explains, «[…] I think a year from now people will look at Airbnb and instead of seeing just real estate, they will see hosts. They will say Airbnb is not just a marketplace, Airbnb is a community» Noticeable is the semantic appropriation of the concept of community applied to business, where in view of the permanent social emergency, a shift in a communitarian, almost fraternal, sense is preached, with the resumption of a more heated activism. 

Without alternatives but at least with imagination 

The issue remains whether there is an alternative that is both ethical and competent. An ethical organization, for a consumer, means that it acts from a perspective whose ultimate goal is not only profit, but also development with fairness, honesty and vision. But success is measured by the ability to obtain the best result with the least use of resources. 

How can a firm that currently has profit as its dominant factor, integrate the ethical component without denying space to the former? As a matter of fact in the current framework, presenting itself as an alternative can only result as a choice made primarily for the commercial need to reinvigorate the consumer base. So far the contamination between private and public mechanisms has not only brought harmful consequences, but remains full of contradictions. These need to be recognised and boundaries definedso that participation in public and social life might take place in a conscious and responsible way.

Articolo di Nicolò Benassi, Adriano Bordoni