Virtue-signaling woke threatens to unite left and right Business

At the border of the awakened corporatism of the culture wars, the left and the right are converging. Just as liberals have been skeptical of “corporate social responsibility,” believing that we all benefit from corporate self-interest, anti-capitalists increasingly believe that corporations cannot whitewash their images by flagging credentials. awake.

While Milton Friedman argued that the only “corporate social responsibility is to increase profits” and that individuals rather than corporations should donate, the left sees corporate efforts to “do good” as nothing more. than a marketing slogan. Companies are appointing women to boards, airlines are banning ‘ladies and gentlemen’ from their ads, ice cream companies are condemning policy responses to migrant crossings in the English Channel. But critics say it is a corporate showcase designed to improve a company’s image rather than an attempt at genuine reform.

This cynicism contributed to Save the Children’s decision last week to refuse a £750,000 donation for its work in Ukraine from a North Sea gas company. Twitter got wind of it and went into its usual frenzy. The left has insisted that Neptune Energy is trying to “green” its reputation, suggesting that allowing the company to restore its image is tantamount to making a deal with the devil. The right blasted the move as a sign of bourgeois virtue that undermined the interests of those the charity is meant to help.

Along the same lines, when oil and gas company Woodside sponsored an orchestral event in Australia at the Perth arts festival – particularly Beyond Ocean by ecologist and writer John Luther Adams – a livid representative of the the Australian wing of Greenpeace called it an “arts wash”. When BP and the National Portrait Gallery ended their 30-year partnership earlier this year, a representative from pressure group Culture Unstained claimed the company was “fast running out of places to clean up its toxic image”. In 2019, the National Theater and the Royal Shakespeare Company ended their sponsorship deals with Shell and BP respectively, after actor Mark Rylance resigned from the RSC in protest at a relationship he said allowed the oil company to “obfuscate the destructive reality of its activities”.

The list is long – and it is not exclusively about fossil fuels. Ever since Vladimir Putin sent tanks to Ukraine, “sportswashing” has become common parlance. Just this weekend it was reported that supermarkets had been accused by campaign group Eating Better of ‘bombarding’ shoppers with cheap meat. Although the term conjured up images of store workers firing bazookas of beef at unsuspecting customers, what the charity really meant was to “make food available at a reasonable price”.

Of course, companies should not deceive customers or intimidate suppliers, just so they can whitewash their reputation through, for example, charitable donations.

Even Friedman, in arguing that management should pursue the interests of shareholders, said this should be subject to the law and codes of ethics as determined by the culture of the company. But the left has failed to distinguish between companies that operate in sectors it deplores from those that operate on the fringes of the law.

With inflation already above 6% and the Office for Budget Responsibility expecting it to hit 8.7% later this year, there is nothing wrong with the supermarket chains – which operate in a highly competitive industry – offering deals on sausages or burgers. It may be fashionable to bash oil and gas companies, but with energy bills set to double in 2022, it’s time to recognize that we all benefit from cheap and plentiful supplies.

And there is still little evidence to suggest that companies benefit economically from their performative progressivism. Consider, for example, when Virgin Trains banned the sale of the Daily Mail in 2017. The decision led to a major drop in the number of newspapers sold on the West Coast line, until Sir Richard Branson stepped in for the to cancel. Film production companies reaped little reward pushing divisive political points: Marvel Eternals’ revival bid earned less than a quarter of Spider-Man: No Way Home at the US box office.

Surveys suggest that the phenomenon of “purpose-driven businesses” is demand driven by producers rather than consumers. A Brunswick report showed that while 63% of business leaders believe it is right to speak out on issues such as income inequality and race relations, only 35% of voters are from OK.

Surveys consistently show that delivering quality products and customer service trump hard work. And investors largely agree. Shareholder Terry Smith recently launched a campaign against Unilever for “working under the weight of management obsessed with publicly displaying sustainability credentials at the expense of focusing on business fundamentals”. Unilever’s boss is under pressure, the company is losing staff and its share price has fallen 27% since 2019.

For years, moral absolutism has seeped into policy-making, imposing on us a government determined to use its powers to try to make us better people. This has caught on in the private sector, with companies saying they want us to “do better”. But as we all reap what bad decisions have sown – with a cost of living crisis and the biggest drop in disposable income since records started breaking this year – the tide is starting to turn. It’s easy to focus on these sorts of peripheral issues when the economy is strong and businesses are profitable.

But, as the Chief Secretary to the Treasury said yesterday that the era of unfunded spending demands is over and we have reached the “limit on government fiscal expansion”, tough times are clearly ahead. Businesses will need to focus on their bottom line. By doing so, we will all benefit.

Annabel Denham is director of communications at the Institute of Economic Affairs