The Corporate Silence Surrounding Abortion Debates

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Eight years ago, there was a controversial attempt in North Carolina to regulate the use of public bathrooms by transgender individuals. This move sparked a strong reaction from Corporate America.

PayPal canceled a planned expansion in the state, musicians scrapped performances, and the NCAA stated they would not allow North Carolina to host championships due to the law. As a result, the state's economy suffered a loss of around $4 billion, according to an analysis by the Associated Press, which mentioned that the actual impact could be even greater.

Recently, however, Corporate America seems less willing to engage in a culture war.

In the US state legislatures, a record number of 510 anti-LGBTQ bills were introduced last year, according to the American Civil Liberties Union. This is almost three times the number of bills introduced in 2022. Additionally, nearly 20 states have restricted or banned abortion rights since the overturn of Roe v. Wade two years ago.

Despite the support and financial aid pledged by large corporations for employees seeking abortion care, there is a noticeable lack of active involvement in the political discussion surrounding this issue. Unlike other recent issues, companies are not engaging with the same level of enthusiasm.

There isn't one clear explanation for this trend. Some speculate that businesses were more inclined to take risks in a zero-interest-rate setting, with soaring stock prices and customers unaffected by inflation. It's also possible that the expenses of previous progressive marketing efforts were deemed excessive in a highly divided nation - no company wants to face the same backlash as Bud Light.

Another theory is that both customers and businesses are experiencing "outrage fatigue," according to Cait Lamberton, a marketing professor at the Wharton School of Business at the University of Pennsylvania.

Lamberton mentioned that people can only stay angry for a limited time. He explained that we are skilled at adjusting to psychological discomfort. Our rationalization mechanisms quickly come into play, allowing us to view the actions of a brand or ourselves in a way that reduces internal conflict.

I had a conversation with Lamberton regarding the shifting landscape of corporate activism and the challenging situation faced by leaders.

The trend of companies taking political or moral stands on cultural issues started around 2016. However, in the past year, this trend seems to have faded. What could be the reason for this shift?

Lamberton believes that every brand should have a social and ideological purpose, which is the natural life cycle of an idea.

For the past six years, there has been a significant increase in people's interest in brand activism, with strong numbers supporting this trend.

Consumers today expect brands to not only meet their personal needs but also contribute positively to society. However, there has been a shift in this expectation in recent years.

Since 2016, there has been a surge in public anger related to various political issues such as Ukraine, abortion rights, and more. This constant state of anger is not sustainable for most individuals in the long run.

Nightcap: A year ago, Bud Light upset people by teaming up with a transgender social media influencer. The ad may have seemed harmless, but the response was huge. (The parent company, Anheuser-Busch, reported a loss of about $1 billion in sales due to the backlash.)

Lamberton: In my opinion, a few things went wrong in that situation.

When people enter a room, it's common to assume they reflect the entire world. Often, "brand purpose" is shaped by internal views of employees and leadership. However, it's crucial not to overlook the customer to avoid making significant errors.

There seemed to be a gap in understanding, not to imply that all Bud Light consumers opposed the transgender community. Nonetheless, there may have been a vocal minority that reacted unfavorably.

They also made a mistake by withdrawing their support. Bud Light initially took a stand that came with consequences, but they quickly retreated when they saw the repercussions, which made the situation even worse.

There were definitely advantages for the brand in aligning with a group that has been historically marginalized. However, it is crucial to consider and prepare for the possible outcomes before taking such actions.

Nightcap: Are we simply going back to the traditional model of shareholder capitalism, where the main focus is on profits and avoiding involvement in politics?

Lamberton: The answer to that question really depends on the specific brand in question.

Brands face a challenging dilemma. They can opt to support a cause without any negative consequences, which should please shareholders. However, this approach may not be perceived as genuine due to the lack of sacrifice involved.

Alternatively, brands can take a stand on an issue that comes with a cost. In doing so, they risk upsetting certain stakeholders.

Brands often find themselves in a tough spot when deciding whether to take action. They have to weigh the options of making a small, inexpensive change that may not have much impact, or investing in a costly initiative that could potentially harm their profits and upset some customers. Making this decision is definitely not a walk in the park.

Nightcap: In 2021, Georgia introduced restrictive voting bills, prompting companies like Coca Cola and Delta to speak out against them. However, there has been less public opposition from corporations following the overturning of Roe v. Wade and the implementation of various abortion bans.

Lamberton: The issue of abortion is one of the most divisive topics, yet it is also the issue where corporations may feel the least capable of making a significant impact.

I believe that there is a perception that seeking approval from the public may not lead to significant benefits. Ultimately, decisions in these matters are made by the courts.

Companies may acknowledge that their influence is limited in certain areas. They impact the environment and pay equity through their products. They can also influence gun-related issues. However, they do not have a direct influence on abortion. The only way they can make a difference is by ensuring reproductive rights for their employees. Perhaps the most impactful action corporations could take is to provide their employees with a day off to vote.

Nightcap: Have we seen this play before? What historical precedents do companies have to draw on when it comes to brand activism?

Lamberton: There have been many instances when corporations have taken strong political and ideological stances. A notable example is Wanamaker’s department store, which was established in Philadelphia in 1861.

John Wanamaker believed that businesses should play a role in morally uplifting people, as he was an evangelical Christian.

He felt that companies should be one of the influences that help shape society, which has led to businesses taking ideological stances for many years. However, the current environment may present some differences in this approach.

Technology has increased transparency in how companies operate, allowing people to connect and share information in new ways. This has led to greater polarization in politics and economic volatility in recent years. It is difficult to find a historical comparison that perfectly fits this current context.

Nightcap: That's true. The Wanamakers didn't have to worry about hiring a social media manager back then.

Lamberton: No, they did not worry about being on X.

Editor's P/S:

The article delves into the shifting landscape of corporate activism, shedding light on the recent decline in companies' willingness to engage in public discussions on cultural issues. While in the past, businesses were more inclined to take risks and support progressive causes, the current environment seems to have fostered a sense of "outrage fatigue" among consumers and businesses alike.

As a result, companies are now more cautious in their approach to brand activism, seeking to avoid polarizing their customer base. This trend has implications for future corporate decision-making, as businesses grapple with the balance between social responsibility and maintaining profitability in a highly divided market.