Column: ‘Woke’ could be what most voters actually want in 2023


For the Valley News

Published: 01-22-2023 3:40 PM

Several articles over the past several weeks describe how GOP cultural conservatives like Florida Gov. Ron DeSantis and U.S. Sen. Ted Cruz, of Texas, oppose “woke corporations” who have embraced an “ESG” ethos or investment strategy. Wailin Wong, an NPR Planet Money host, offered this description of ESG a recent broadcast:

“ESG stands for Environmental, Social and Governance. Environmental — stop polluting, stop pillaging the rainforest. Social — pay your workers a fair wage and stop using child labor. And Governance — is your management team diverse and not abusive?”

The ESG ethic provides cultural conservatives with a wedge issue pitting “Green New Deal environmentalists” who want everyone to drive electric cars, use public transportation, heat with solar and wind energy and eat more kale, against “real Americans” who want to retain the freedom to burn fossil fuel, use incandescent light bulbs and eat more meat. ESG also pits “liberals” who seek to promote unionization and fair treatment for women, LGBQT+, and BIPOC employees against “hard working Americans” who want to retain the existing social structures.

At first blush this looks like a winning strategy. It is an extension of the culture wars former President Trump launched in 2015 where he chided “coastal elites” who looked down on the “forgotten heartland Americans” who work on farms and in factories and warehouses. But five factors may well undercut this divisive strategy.

First, the trend toward ESG investing and management reflects the changing priorities of the CEOs of the Business Roundtable (BRT), an organization representing major US corporations that employ 20 million and generate $9 trillion in revenues. Until 2019 the BRT officially endorsed the view that the purpose of a corporation was to meet the needs of shareholders, those individuals who owned stock in their companies. In August, 2019, the BRT changed its purpose, focusing primarily on the needs of stakeholders: workers, consumers and their suppliers. As part of this new purpose, BRT members pledged to support the communities where they were located by respecting the ethos of the people in those communities and protecting the environment by embracing sustainable practices. And major corporations are not the only businesses shifting their priorities. As of 2022 over 5,000 businesses qualified for B-Corp certification, an endorsement that requires a commitment to achieving a “triple bottom line” that puts profits, people and the planet on equal footing. In 2007, only 81 businesses sought this credential, which is wholly voluntary.

Second, as it stands now, a solid majority of voters in both parties oppose the government interfering with the goals of business. Fortune writer Lindsay Singleton, citing data gathered by ROKK Solutions’ in collaborative research with Penn State University, noted that while only one-third of voters (33%) want their employer to speak out about social issues unrelated to their company’s products or services, over three quarters of the voters (76%) feel companies play a vital role in society and should be held accountable to make a positive impact on the communities in which they operate, a position a majority of voters in both parties hold. Too, voters in both parties opposed the government revoking tax incentives for companies on the basis of ESG-focused efforts, an action championed by Florida’s Ron DeSantis and many other culturally conservative GOP governors. Voters seem to understand that profits often come at the expense of the environment, middle class wages, and manufacturing jobs.

Third, younger voters, whose cohort will soon outnumber the Boomers, value ESG investments. As Holly Rosenkrantz wrote in USA Today, “Socially responsible investing is particularly popular with millennials concerned about climate change and how companies treat their workers.” Today’s voters might blanch at ESG investments, millennials don’t, and millennials are increasingly becoming a political force.

Fourth, ESG investments are solid financially. In a recent Inside Climate News article, Marianne Lavelle cited an analysis provided that Morningstar, a financial services research firm, indicating that in 2021 ESG-focused mutual funds and exchange-traded funds rose 53% to $2.7 trillion. And even though this trend slowed dramatically in 2022 with the market in a downturn, by the third quarter ESG funds rebounded far more quickly than the rest of the funds market.

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Finally, as New York Times commentator Peter Beinart notes, “woke” corporations are part of a cultural shift that reflects the changing values of our country. He observes that for many conservatives, shifts in American demographics — “fewer Americans identifying as Christian, more Americans seeing gender as fluid, a growing focus in universities and corporations on diversity, equity and inclusion” — are creating a society that no longer embraces their values. GOP cultural conservatives are responding to this shift by attacking proxies for the so-called “woke” culture: people like Colin Kaepernik, like the reporters who pose tough questions at their press conferences, like philanthropist George Soros, and corporations like Disney who take political positions contrary to the ones they espouse.

In the months ahead, as the GOP-controlled House convenes hearings on ESG investing and GOP-controlled statehouses move to prevent ESG investments by state pensions and institutions, the public will have a chance to weigh in on corporate investments and priorities. When that happens, the cultural conservatives may face their own awakening. They may find the voters they represent want corporations to stop polluting and stop pillaging the rainforest. Their voters may want to see corporations begin paying their workers a fair wage, stop using child labor, and stop offshoring work to low wage workers to help their bottom line. Their voters may want corporations to seek out diverse and supportive managers. They may also find that their constituents don’t want the government interfering with corporate investment decisions.

In the end, they are likely to find that once most voters understand the values of “woke” corporations and workplaces they will not only support them but seek them out as desirable places to work. Should that occur, 2023 may be the year that “wokeness” becomes acceptable.