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Doing Business in a World on Fire
"2024. Politically it’s the Voldemort of years. The annus horribilis.
The year that must not be named. I’d love to sugarcoat it, but I can’t: From a global political risk perspective, this is the most dangerous and uncertain year I’ve covered in my lifetime."
Ian Bremmer
5 Steps to Successfully Navigating Your Business Through 2024
by Siri Khalsa
2024 is upon us and it is undoubtedly a critical year for democratic values vs populism as half of the world’s populations have elections, as dangerous regional and proxy conflictsdraw in world powers, as income and social inequality grows and as Artificial Intelligence continues its rapid development. It is also forecasted to be the hottest year on record.
It is impossible not to be very concerned about these issues even if you have the privilege of not being personally affected by them (yet) in your daily life. Now, more than ever, it is crucial to examine and understand the role the corporate sector plays in contributing to the rise of these issues, how the corporate sector acts during global crises and most importantly how the corporate sector can lead the efforts for peace, stability, sustainability and equality. Here are five steps you and your company can take to navigate the challenges in the year ahead.
1. Be Well-Informed
Business leaders need to know what is going on in the world but in this post-truth era it can be hard to know where to turn for accurate and neutral information. Rely on reporting from sources which follow journalistic practices and standards. Read beyond the headlines to gain a better understanding of root causes and coming consequences. Share a corporate subscription to trusted news outlets with employees. And avoid sharing alarmist information without checking the source, even if it’s a funny meme.
2. Know Thyself
Where does your company and all its stakeholders sit in the global environment? What issues (reproductive rights, LGBTQ rights, immigration etc.) touch the daily lives of your employees? What is on the mind of your target customers and how are geopolitics, the climate crisis, elections etc. impacting your supply chain? Any leader who wants to succeed this year and beyond needs to consider these touch-points and revisit them regularly with all stakeholders. Companies should also identify, recognize and take action on issues where they are falling short or contributing to the problem. Transparency, even if it highlights problems that need work, is better than covering up or ignoring shortcomings.
3. Take a Stance
With global political leadership lacking in so many ways, there is an opportunity for the corporate sector to set up. A well-informed, authentic and carefully considered stance on social or political issues can have a tremendously positive impact in many ways, including recruitment and retention, customer loyalty and broader industry leadership. Millennials and Gen Z in particular are looking for employers with purpose beyond profit and are increasingly aligning their professional associations and buying power with their personal values. It is impossible to be all things to all people and staying silent on issues that impact your stakeholders can cost trust and loyalty. Be prepared for potential backlash, but if your stance is connected to a real social or political commitment, your key stakeholders will thank you for it.
4. Live your Values
The age of corporate activism is dawning. Companies like Patagonia, Ben and Jerry’s and Tony’s Chocolonley have proved that corporations can be a force for positive change in the world and make a good product and good profit while doing so. Corporate activism is living your values and incorporating them into your economic model so that they become non-negotiable, simply how you do business. Your values are meaningless if you compromise them when its inconvenient or times are hard. Don’t over commit, but when your company does commit itself to getting to net zero, opening employment to the disabled, sourcing from SME suppliers or speaking out on gun laws, it should be as ingrained in your corporate culture as any other part of your operation.
5. Lead the Way
Be the change and bring your friends. It came as no surprise that the board of Ben & Jerry’s recently called for a permanent ceasefire in Gaza, because their long-standing commitment to peace gives them a legitimate platform to advocate from. In addressing pressing issues, the corporate sector has many, many levers it can activate in the countries and communities where it operates. By collaborating with public institutions, NGOs and other corporations, lasting change can be achieved. It is time for the corporate sector to take the lead and use its power to be a driving force for peace, sustainability and stability. This is the year for your company to make it happen!
Tempting as it may be, I challenge you to reject the siren call of despondency, complacency and apathy over the next 12 months. 2024 could well be the turning point for the survival of democracy as we know it, managing AI advancement, setting a realistic path to net zero, and containing regional conflicts before they become much more dangerous. Whether you have a small shop, a community bank, a global tech company, a chain of hotels or you are a huge multi-national manufacturer, there is a role for your company to play in creating a safer, healthier, more just and peaceful world for your employees, your customers and us all; this year, and hopefully, for many years to come.
Take a Stance or Miss a Chance?
Just days after the Dobbs ruling by the US Supreme Court overturning Roe v. Wade, a number of US corporations made public statements supporting a women’s right to choose, and their corporate support for any female employee who may need to travel out of state for reproductive health care. Abortion is one of the most contentious issues in society today and this response was meaningful in many ways. This strong reaction demonstrates how more corporations are choosing to speak out and take action on issues that impact their customers, employees and society at large. In this article we will look closely at some of the risks and benefits for companies trying to decide if it is time for them to take a stance.
According to researchers from Yale University,
“Over the past 45 years, our institute’s researchers have been studying companies that have spoken out as first movers on many social issues—ranging from apartheid to abortion, from racial justice to responsible governance, from cancer control to corruption, from sustainability to gun safety, from immigration reform to investor activism, from election security to energy supply, from opposition to Chinese labor practices to retreats from doing business in Russia.
The stances taken by companies on most of these issues enjoyed support from more than 80% of Americans, though some others politically divided the nation. The speed of a company’s corporate engagement was rarely determined by the ideology of its leaders, but more often by its strategic positioning and considerations. Thus, where a company stood depends on where it sits in society. And current responses to the Supreme Court abortion ruling follow similar lines.”
As more companies wade in on political and social issues, whether by choice or influenced by internal or external factors, they are facing a range of complicated positioning issues that fall well outside normal business operations. Frankly, taking a stance is risky. Before speaking out it is important to make a considered decision that such engagement is in alignment with your corporate values. If done with authenticity, consideration and intelligence, social and political engagement will not distract from the core business, but rather reinforce the corporate mission, build the brand and increase internal and external loyalty.
However, it is important to be well aware of some of the potential pitfalls. For example:
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Overstepping
Being told to “stay in your lane” is an easy rebuttal to anyone using their platform for more than their core business. This approach can be directed at organizations or individuals who wade into subjects outside their area of expertise. After all, what does the CEO of a fintech company know about gun control laws in Texas? There is a great risk of alienating customers and giving the competition an easy opening.
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Backfire
Taking a stance can backfire either by unforeseen consequences or by being seen as inauthentic. Empty statements will most assuredly lead to negative outcomes. Wading in without the necessary consideration and knowledge of all the facts can leave a CEO looking uninformed and potentially just “values signaling” without any real substance behind it. It could also turn out that the stance you take is the wrong one. Events may unfold differently, or you may realize that you had inadequate information when you took your position.
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No Impact
Perhaps you do decide to take on an issue but it falls flat and makes zero impact. Perhaps it is a matter of bad timing, misaligned priorities, bad partners or insufficient communications. Before taking a stance it is important to know why you are doing so and what is your desired result.
The bottom line is, expect some backlash. Not everyone wants their sneakers or ice cream with a side of activism.
While there are real potential downsides, the possible benefits to taking a stance are significant, Including:
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Improves Employee Recruitment and Retention
Today people have a choice among employers and increasingly, especially Gen Z and Millennials, want to work for organizations with articulated social and political values and positions. When employees feel a connection to the values of their company, they are also more likely to stay with the company and take pride in their personal contribution.
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Increases Customer and Brand Loyalty
Customers want to support companies and associate themselves with brands that share their values. They use every purchase to demand transparency, accountability and engagement on the issues that matter to them. Passivity and silence is no longer an option for companies who want to build a loyal base with the consumers
of today.
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Develops Industry and Sector Leadership
Differentiate yourself from the competition by taking leadership on issues that matter. Raise the profile of your organization and use the opportunity to promote your values and mission, rising above the crowded marketplace. Authentic and intelligent advocacy gives companies a legitimate and respected voice on key issues.
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Builds Community
One of the greatest benefits of taking a stance is the opportunity to connect with others who share your values. Getting involved in issues that matter to you opens doors to groups and organizations working on those issues, enabling and increasing synergy, cooperation and impact. Whether in your local community or on the other side of the world, joining with others makes it more fun and can transform a cause into movement.
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Has a Positive Impact in the World
The static Corporate Social Responsibility programs of the past are insufficient to respond to the challenges of today's world. The business sector has a unique capacity to influence public opinion, drive public policy and change behavior. The economic might of the business sector gives it the power to be the greatest force for positive change, often more efficient and effective than non-profits groups or even governments and institutions.
Corporate activism is not a trend, but rather a growing expectation from society on a global scale. According to the 2022 Edelman Trust Barometer, covering 28 countries with over 36,000 respondents, the business sector needs to do more to address societal problems. As a consequence of falling trust in government and the media, as well as the decline of democracy across the world, people are looking to corporations and CEOs for leadership on a broad range of issues facing society today.
Source: https://www.edelman.com/trust/2022-trust-barometer
Further the report finds,
“Societal leadership is now a core function of business. When considering a job, 60% of employees want their CEO to speak out on controversial issues they care about and 80% of the general population want CEOs to be personally visible when discussing public policy with external stakeholders or work their company has done to benefit society. In particular, CEOs are expected to shape conversation and policy on jobs and the economy (76%), wage inequity (73%), technology and automation (74%) and global warming and climate change (68%).”
Can Luxury Be a Force for Good?
Today’s conscious consumers are using their buying power to motivate brands to become responsible corporate citizens, rewarding those
that do with die-hard loyalty
By Siri Khalsa
November 2023
Of course, the simple answer to this question is an emphatic “Yes!”, but luxury actually being a force for good in the world means that it is time for many brands to finally step up to the challenge.
A new breed of discerning customer is now demanding not only the highest standards of luxury but also of sustainability and ethics from their favourite brands. Conscious customers are asking about the source of materials, efforts to
protect the environment, conditions of workers, cultural appropriation and even a brand’s position on any number of hot-button topics.
International brands like Patagonia, Warby Parker and Ben & Jerry’s are well-known for incorporating their social and political stances into their core image and business operations. They use the power and platform of their brands to educate customers on various issues and often donate a portion of their profits towards causes aligned with their company values. However, most luxury brands are not always so readily associated with social responsibility, often because it has not been demanded by their customers and other stakeholders.
But times, and consumers, are changing. As the buying power of millennials and Gen Z grows, there is an increasing demand for their favourite brands to also be responsible corporate citizens. Having grown up with the worsening climate crisis, pandemics and rising societal inequality, these customers understand the issues facing society and want to invest in items that also make a difference – expressing their values through their purchases.
According to a recent McKinsey & Co report, 75 per cent of millennials cite sustainability being a key factor in their buying decisions. Importantly, these consumers don’t settle for empty statements. They spend time researching the labels they are interested in and demand authenticity and transparency. This generation is also taking over major labels and are bringing their social values with them. Stella McCartney has always expressed her values through her products, never using fur or leather in her collections, and she continues to lead the way in sustainable luxury fashion. Her S/S 24 show was created with 95 per cent recycled materials, and also featured other ethical innovators. For example, the house teamed up with Keel Labs, a company that has created seaweed-based yarn. It even crafted a version of its Frayme bag out of grape by-product from a Veuve Clicquot harvest; a fully traceable alternative to animal leather that was grown using regenerative agriculture practices.
One key area for brands to avoid, if they truly want to be a force for good and have a real impact, is to sidestep the traps of greenwashing or ‘woke’ marketing. Luxury brands, whether in fashion, travel, hospitality or design, have perhaps the most freedom to incorporate sustainable values into their business models because of the premiums they command from consumers. Efforts can be made at every level of the business to look for more sustainable solutions in materials, ways to reduce waste and environmental damage, respect workers and honour the cultural traditions of local communities. Brands can also use their social media platforms to help educate their customers on the issues they believe in and impact their communities like violence against women, breast cancer, and the education of girls. Sarah Beydoun founded Sarah’s Bags, which she launched in Beirut in 2000, as a way to keep cultural traditions alive and also as a means to empower underprivileged women. Over 200 of the talented artisans making these intricately designed bags, favoured by the likes of HRH Queen Rania of Jordan, are in prison or are ex-prisoners in Lebanon who use the income they earn to overturn wrongful convictions and support their families while behind bars.
On a larger scale, Maria Grazia Chiuri, creative director of Dior, has begun incorporating gorgeous artisan textiles,
handcrafted leathers and intricate hand embroidery into her recent collections via partnerships with local talents. She has used the Dior brand as a platform to celebrate the unique skills of craftsmen from Spain, India and Mexico, sharing their stories with a much wider audience than the artisans could ever reach on their own. Her collaborations with regional artisans also make their beautiful products economically viable and help keep their heritage alive. Not to mention inspiring the next generation of craftspeople to take up an artistic vocation that is sometimes a dying skill set.
Luxury hotels are also finding ways to highlight their social values and commitment to local communities as a way of
differentiating themselves in this highly competitive category. Saudi Arabia’s recent development of the tourism industry has been focused not only on delivering world-class luxury, but also on incorporating progressive sustainability standards, using locally made materials in furnishings and decorations, and training and hiring Saudi women. The historic site of AlUla which has several new luxury hotels, has its very own sustainability charter and has made a commitment to be net carbon neutral by 2035.
In the rarified world of luxury, the customer is always right and no request is impossible. Given this great power, luxury can be a tremendous force for good, especially when driven by customer demand. Brands that engage in sustainability and social impact with authenticity and intelligence can not only reflect the values of their conscious customers but also put the power of their brands behind creating a better world for everyone.
Is Your Business Ready
for Climate-Related Disasters?
4 Steps to Stay Ahead of the Next Crisis
By Siri Khalsa
1 October 2023
The headlines are horrifying. From deadly wildfires in Hawaii, earthquakes in Morocco and Syria, hurricanes in the Eastern US, brushfires in Australia, floods and typhoons across Asia, to increasingly hot and devastating summer heat waves, it is clear that the climate crisis is upon us. Not only are these events often deadly, they are also extremely costly. In the first 9 months of 2023, it is reported that the US alone had 23 separate billion dollar disasters, as compared to just 3 similar disasters in 1980. The California wildfires in 2017 and 2018 are estimated to have cost over $328 billion in damages.
As climate crisis events increase across the globe, they are not only impacting our day to day lives, but also our businesses and livelihoods. Have you considered how a sudden flood in your city, a wildfire down the road, or how a month-long heatwave will impact your business? In the past few months, many businesses did not have time to think about it. Rather businesses, large and small, have had to respond to these emergencies effecting their employees, utilities and infrastructure, supply chains, and in some cases, the viability of their businesses. While it is still difficult to even imagine some of these disasters, it is necessary for businesses to be better prepared and more resilient in the face of climate related emergencies.
The first step is not to be caught off guard. Many businesses have done an Environmental Impact study about how their activities impact the environment, but now it is time to do a ‘Reverse Impact Study’ to better understand how the environment, climate change in particular, impacts you and your business. Will it be too hot for your workers to carry out their activities during the summer months? Are some of your key raw materials threatened because of drought or floods? Is your facility suddenly in the path of hurricanes? Will climate refugees be coming to your city? Does your business depend on seasonal factors that are now totally unpredictable? It is important to assess all the risks facing each aspect of your business so you can plan effectively and take preventive steps before you find yourself in an emergency situation. It is also important to make sure the disaster planning is kept current and revisited regularly based on evolving circumstances. Funding a budget line item for Climate Disasters may also help prevent such events bankrupting your company.
The second step is to galvanize community support. Just as climate change does not respect borders or territories, a collaborative response is necessary. Reach out to your local governments to see how they are responding and preparing for climate emergencies. For example, the US state of Arizona now has a “Heat Czar” who is tasked with finding ways for the population to manage rising temperatures. Local chambers of commerce and business organizations can help bring the business community together to create coordinated response plans with government agencies, allowing for the use of shared resources like physical space, logistics, emergency supplies, manpower, tech etc. In many cases the private sector has access to more resources (heavy machinery, building materials etc.) than local governments. In the US, small businesses can sign up for the government’s Resiliency Program to be eligible for disaster-related grants. Working in coordination, businesses and governments can have a more efficient and effective emergency response, especially if planning is done before disaster strikes.
The third step is to make sure you care for your workforce during and after disasters. During a crisis, make sure to have a continuity plan, strong communication systems and clear instructions for staff about what is expected from them in the midst of an emergency. It is also important to help make sure your employees have whatever resources (water, food, generators, etc) they need to get through the disaster. Involve employees from all departments in emergency planning, to help mitigate the risks for them and their families. Bring in an expert to help educate staff on how to respond in various emergency situations, and how they can best prepare themselves and their families for future disasters. In some cases, it may be helpful to provide counselling to employees who have suffered the loss of family, friends or property.
The fourth step is prevention. The business sector cannot afford to wait for governments to make watered-down regulations. The economic and social might of the business community can create change faster and with greater impact than governments or regulatory agencies. How close is your company to Net Zero? Can you find more sustainable solutions for your raw materials? Have you looked down your supply chain to see if your suppliers are doing their best to mitigate environmental damage? Are you encouraging your customers to make choices that protect wildlife and habitats, reduce waste, and to make small changes towards a more environmentally-friendly lifestyle? Based on your Reverse Environmental Impact Study, what risks can you help mitigate in your community? Can you lobby for infrastructure spending, help protect the most vulnerable and use your platform to help raise awareness?
Corporate Boards and CEOs need to accept that climate emergencies are not someone else’s problem. Radical responsibility is required to avert disaster where possible and to be part of the response during and after disasters. Maybe this summer there was no heatwave in your city or flood that wiped out your inventory, but the crisis is here and billion dollar environmental emergencies are now a fact of life. The business sector has a huge role to play not only in assuring their own ability to survive through fires, floods and hurricanes, but to support their communities in times of crisis and help mitigate the causes of these events in the first place.
6 Ways Your Company Can Support Democracy in the Mid Terms
By Siri Khalsa
25 November 2022
Election Day is almost here. We all know a healthy democracy requires engagement. Voting is one of every American’s most fundamental rights and responsibilities. Participation is what makes democracy work. There are forces at work trying to make voting harder, not easier, especially for certain minorities, for purely political gain. This is simply unjust and a serious threat to our democracy. More than ever, American businesses have a vital role in upholding the democratic values that keep our country, and our economy, on track.
Here are six ways your company can support democratic values in the mid-term elections on November 8.
First, take a stance. Put out a clear statement (here is a helpful sample) that says your company stands for the free and fair democratic process and that your company supports each individual’s right to vote. This statement is important to address to both your internal and external audiences. Make sure your employees understand why your company is taking this position and how it applies to them. Your external audience (customers, stakeholders, competitors) also matter. By clearly stating your values to support the democratic process, your company can take the lead and inspire others to follow your example.
Second, give employees paid time off to vote. Good citizens make good employees. Most people say they don’t vote because they don’t have time or can’t leave work. Check out organizations like timetovote.org or adayfordemocracy.com to see how other companies are making voting part of their corporate culture. Help make sure employees know where, when and how to register to vote. You can also invite non-partisan election officials to come to your office ahead of Election Day to help answer questions.
Third, support a culture of education and engagement. This is especially important if there are issues on the ballot that directly affect your business and community. Find ways to keep the dialogue open and respectful. Know that everyone will not share the same views, so make it okay to agree to disagree. Bringing political dialogue into the workplace can be risky, but if managed well, healthy political dialogue can make your workplace more inclusive and relevant.
Fourth, be transparent about your company’s political involvement, especially how it spends its money in politics. After January 6, many employees were surprised to learn that their company had a political PAC, and who that PAC supported. Business and politics will always be intertwined. Unfortunately, all too often these connections are covert rather than overt. Be upfront and let all your stakeholders know where your company puts its political money and influence.
Fifth, encourage employees to volunteer as poll workers and even consider giving employees Election Day off as a paid holiday. Voting rights are under attack and this basic right must be protected and respected. Most polls are understaffed and more volunteers are needed to make sure the voting process is not hijacked or discriminatory. Your company can partner with organizations like powerthepolls.org to help your company staff the polls this November.
Sixth, be creative. Can your company help transport voters to the polls, can you provide snacks for poll workers, or maybe give freebies to anyone with an “I voted” sticker? Engage with your social media and inspire your company’s followers to get educated on the issues, register to vote and turn out to vote on Election Day. This is especially important for younger populations who have lower turn out, and yet will be responsible for the future being legislated today.
We know elections matter. On November 8, control of Congress for the next two years will be decided. The party in power will set the legislative agenda, impacting everything from reproductive rights, to inflation and taxation, to housing issues. There are also a number of very important races for Governor, Secretary of State and local officials happening at the state and local levels. We need to make sure every vote counts, and that every vote is counted.
Recently, our democracy has been tested more than many of us ever thought possible. As much as any individual candidate, the democratic values that America was founded upon are on the ballot this November. American businesses should be proactive, involved and resolute in their support of democracy and the democratic process.
People have fought and died for the right to vote in America and as business leaders we have a role to play in helping our employees participate in the democratic process. This campaign isn’t about any particular party or candidate or issue – it’s about encouraging more people to vote without having to make the hard choice between going to work and going to the polls.
- Chip Bergh, President and CEO of Levi Strauss & Co.
Siri Khalsa is the CEO of Stance Advocacy Services, which enables companies to engage political and social issues with intelligence, authenticity and impact.