Leaving aside the purpose of offering good products and services to take political positions, especially on controversial issues such as abortion, weapons, diversity and climate change, can take a high price for companies, not only because of the well-known boycott actions by the end consumer. This year, at least 58 bills or new laws penalizing corporate militancy were created in 2021 US states led by republicans; almost four times more than recorded in 2021.
The survey was published last month by the Reuters news agency, which highlights that anti-woke measures are not restricted to traditional conservative strongholds, such as Texas, but have advanced in the so-called purple states, whose voters oscillate between Democratic and Republican candidates, such as Arizona and Ohio.
In addition to weapons and energy, which were the focus of at least 30 legislative measures in the US, in 2022, the analysis shows that topics such as social issues, including critical race theory (which argues that racial prejudice is embedded in American laws and institutions), mandatory vaccines against Covid-19 and social credit (Chinese system that takes into account the political inclinations of the individual when providing and pricing services) were also the agenda of bills.
In April, Florida Governor R on DeSantis, signed a law that became known as the Stop WOKE Act , prohibiting training in companies or schools that claim that people are privileged or oppressed on the basis of race, gender or national origin, or that someone “has personal responsibility and should feel guilt, distress or other forms of psychological suffering” for actions committed in the passed by members of their race, gender or nationality. Under the law, this type of training amounts to discrimination.
“In Florida, we will not let the far-left agenda take over our schools and workplaces. There is no place for indoctrination or discrimination in Florida,” DeSantis said. At the time, the governor named Bank of America as a company that carries out this type of training. A spokesperson for the bank claimed that the materials were offered to hundreds of companies by a non-profit organization and therefore were not part of their own training.
In the opinion of the bank former director of the U.S. Office of Management and Budget and president of the Center for Renewing America, Russ Vought, “boycotts may or may not work, but what will work is to identify all the unique benefits these woke companies get under the law and remove them.” them and require them to operate like all other companies in those states.”
That’s what happened recently with Disney, also in Florida. In April, DeSantis signed a bill passed by the Republican-majority Legislature revoking the special tax exemption and other privileges for Walt Disney World in Orlando. The benefit, which existed for more than half a century on an understanding by lawmakers that the venture would create jobs, attract tourists and generate taxes on product sales, was overturned after Disney CEO Bob Chapek’s protests against the Bill of Rights. Parents’ Rights in Education. The governor’s bill prohibits the teaching of gender issues in early childhood education through third grade in Florida.
With the repeal of Roe v. Wade by the Supreme Court, giving each state back the autonomy to legislate on abortion in the United States, the issue should also become the agenda of projects against companies that facilitate access to the service in other states. Texas Republican lawmaker Briscoe Cain said he plans legislation to ban coverage of travel costs for abortion and to prevent companies that provide it from entering into any business or contract with the state of Texas. “No corporation doing business in Texas will be allowed to subsidize abortions or abortion trips in any way,” he told Reuters.
of 14 Republicans in the Texas House of Representatives, led by Cain, sent a letter to Lyft CEO Logan Green, stating that “the state of Texas will take swift and decisive action if you do not immediately terminate your recently announced policy to pay the travel expenses of women who abort their unborn children.” They also pledged to introduce bills preventing companies that pay for abortions from doing business with the state.
In September of last year, a law went into effect in Texas prohibiting state agencies from doing business with any corporation that “discriminates” against companies or people linked to the manufacture of weapons and ammunition. The legislation requires banks and other companies to send letters to the state attorney general certifying that they “do not have a practice, policy, guidance or directive that discriminates against a firearms entity or firearms trade association.”
The measure is a reaction to a movement initiated by JPMorgan Chase, the largest US bank, and Citigroup, limiting partnerships involving firearms, in 2018, after a shooting that left 17 dead in Parkland, Fla. Citicorp (the consumer division of Citigroup) stated that it would prohibit its retail customers from selling guns to people without background checks (which is already provided for by law) and to minors 21 years, in addition to sales of inventories. Among these customers of the banking institution are those who receive loans and those who offer store credit cards.
Bank of America informed that it would no longer lend resources to manufacturers of military style weapons. In the same vein, BlackRock, the world’s largest asset manager (more than BRL 44 trillion in assets under its management, five times the Brazil’s GDP at 2021, which was R$8.7 trillion), said it would exclude arms manufacturers and sellers from its new investment fund. Its president and CEO, Larry Fink, is considered responsible for the popularization of ESG, by pressing the companies in which he invests to fulfill an aggressive climate change and diversity agenda in their operations.
BlackRock, by the way, was already being boycotted for certain services by the states of West Virginia and Arkansas, due to its climate posture, according to West Virginia Republican Treasurer Riley Moore and reports from Arkansas vehicles. “They are using the power of their capital to push their ideas and ideologies to the rest of us,” Moore stated.
After declaring that his business relationships with weapons manufacturers “have dropped significantly and are quite limited,” JPMorgan was forced to reverse the decision in the face of new Texas legislation. In 2020 alone, the state sold more than US$ 58 billion in bonds, currently being the second largest bond market in the United States, behind only California.
Between 2015 and 2020, the bank underwrote 2009 Texan bond deals, which generated nearly US$ 80 millions in fees for JPMorgan, according to Bloomberg. Remaining barred from doing business with Texas therefore implies a financial impact that the institution does not seem willing to face. On May, the bank sent a letter to the Texas Attorney General stating that the bank’s policy did not discriminates against or prevents from doing business with firearms entities or associations, adding that “these business relationships are important and valuable.”
The American news network CBS says it had access to to more than 80 similar letters sent to the Texas Attorney General. And, according to the New York Times, Citigroup itself had already presented a letter in the same terms in October of last year.
Pressure incompatible with democracy
Writing on the matter for The Guardian, Robert Reich, former Secretary of Labor in the Bill Clinton administration, criticizes Texas’ position, but admits that one of the important lessons of the episode is: “don’t heed the claims of big banks or any other big corporations about their ‘social responsibilities’ to their communities. When corporate social responsibility requires sacrificing profits, it magically disappears—even when it involves funding gun manufacturers.”
Texas pioneered the state’s ban on business with anti-gun companies, but at least eight others — Arizona, Kansas, Kentucky, Missouri, Ohio, Oklahoma, South Dakota and West Virginia — are considering similar legislation, according to the National Shooting Sports Foundation, the firearms industry trade association. , who has advised legislators on the subject.
Among critics of this type of legislation, arguments range from a possible conflict with the Supreme Court’s precedent in relation to corporate discourse (Based on the historic decision by 2009, which prohibited the government from restricting corporate contributions to political campaigns, they claim that these measures would infringe on the rights of companies to speak political) to a supposed apo The paradox of conservatives in free market government interventionism.
“The notion that what these banks are doing is merely the free market in action is a distortion of the truth. These restrictions are an attempt to use the power of banks to circumvent the normal legal and political process. For Congress to stand by and let the bankers neutralize the Second Amendment [que protege o direito da população e dos policiais à legítima defesa, por meio de porte e posse de armas] would be a dereliction of duty, not a defense of the free market”, opines columnist Jonathan Tobin, in the conservative US magazine National Review.
He warns that, when “socially responsible” loans or investments start to dictate that companies stop selling some product or reduce sales to certain buyers, it is a sign that banks are assuming power that was not given to them through the vote. That is, restrictions on the rights of companies and consumers are incompatible with democracy.
“Those who want to ban guns must defend the cause honestly, seeking to repeal the Second Amendment, in instead of leveraging its control by a few major banks. The free market works when consumers, not bankers or credit card companies, decide what to buy. Republicans must make it clear to the financial sector that they will protect this right”, reinforces Tobin.
The risk of this type of activism, adds Vivek Ramaswamy, a conservative businessman and author, is “a small group of effective corporate elites” begin to “decide what is right for society in general”.
In this context, conservative groups have emerged, such as the Free Enterprise Project, a “ shareholder education and activism program,” which he says is trying to save corporate America from progressive militancy. According to the British newspaper Financial Times, in just two months this year, one of these conservative groups persuaded a California court to overturn two state laws imposing diversity quotas on company boards.
More risks than benefits
Corporate positioning on politically divisive issues is “a riskier proposition than many people realize”, says Vanessa Burbano, professor at Columbia Business School , who conducted a study on the subject.
She analyzed the reactions of employees in companies that, in 2017, took position on which toilets transgender people could use. The findings indicate that, in addition to demotivating employees who disagreed with them, CEOs who took a stand on the issue also did not significantly motivate employees who agreed with them. “My research suggests that the reaction is greater than the benefit,” she points out.