Can stakeholder outrage deliver value

Or is the validation of outrage always a risk?

Early last year, I noticed the anti-ESG movement creeping around the dark corners of YouTube around Glenn Beck and his conspiracy theories about the financial markets. Over time, more mainstream conservatives picked it up as the new progressive boogeyman, culminating in Ron DeSantis leading a maligned effort by conservative states to remove ESG from state pensions.

But lately, we’ve seen conservative boycotts in response to woke values as a response to their fear of a changing world and an increasingly disturbing trend of intolerance. Brands feeling stakeholder pressure to weigh in on social issues are pulling back, even to the detriment of diversity programs.

The next iteration of this evolution is well in swing, with a new website to alert conservatives when brands ‘go woke.’ But with little time to catch up, the next bizarre phase has already started. Far-right brands have emerged, ranging from mere indifference to ESG issues to a harmful purpose of hate against other groups.

Somehow, this past week saw a massive confluence of these issues coming to a head, which begs the question: If being inclusive can capture new opportunities with stakeholders and drive value, can leading with outrage in opposition do the same?

Parler sees little value in targeting conservatives

Last year, GloriFi, a bank built on conservative values, shut down unceremoniously. The premise seemed simple enough - get woke politics out of the way of a bank, yet it had very material ESG issues, mostly around poor Governance. For example, the board seemed to have little financial services experience, and its leadership struggled with alcohol in professional settings. Its planned card, made from shell casings, interfered with the security chip and was too thick to work in card readers.

This past week saw a similar failing as the conservative social media platform, Parler, shut down temporarily to move owners. It is also worth noting that Parler had been struggling with revenue growth since its launch. There is unclear direct evidence as to why this might be, but we can make an assumption based on a stark admission from Parler’s announcement.

No reasonable person believes that a Twitter clone just for conservatives is a viable business any more.

I any business model clone for conservatives a viable business model? Both GloriFi and Parler led with conservative values and were positioned as alternatives. While Glorifi had issues unrelated to its ability to capitalize on conservative deposits, Parler’s failings and this admission seem pretty clear. These values appear not to create the niche markets around conservative stakeholders that some business owners believe they could.

NOTE: It’s worth calling out Strive Capital, a conservative-based asset management firm focused on ‘excellence,’ here as they have had some luck with inflows since its launch. We’ll have to wait and see if they can capture more market share with this approach. They very well may, as DeSantis’s efforts direct correlate with Strive’s business.

But still, here’s the interesting intersection with ESG. If ESG concerns material risks and opportunities, with stakeholders being a key consideration and differentiation, then why aren’t these models, targeting values to value, working?

Honestly, I think it might be because, even though it looks like some companies are shifting towards progressive values, they aren’t building their primary business model around the values. That’s an easy answer, so let’s quickly look at an example of who is leading at the intersection of values and value and how they approach it. I work with a few diverse-led and founded startups. I’ve observed that these companies may seem to lead with progressive values on the surface, but they are actually trying to solve systemic problems impacting them and their communities. The values are a material issue because their business model is built around the problem.

In contrast, conservative-led businesses aren’t trying to solve a problem. The goal seems to be traditional business models that offer an alternative choice with values alignment. As a result, these businesses are built as values-led, which is not a material issue to their operations. In effect, becoming the exact same thing conservatives falsely claim led to SVB’s downfall.

There is a new website tracking retail sites that align with conservative values if you want to check some of these alternatives out. PublicSq is a marketplace aggregating conservative values-based businesses. However, when you dig deeper into some of the brands, you find nothing extraordinary about their business other than a general lack of ESG-related information, a passing mention of faith or military support here and there, and a note about being made in America, for example.

Most businesses listed on PublicSq look like just regular businesses with material attention in the right areas. I expected to see a barrage of outrage on progressive values but was met with business as usual.

The outrage against progressive values from these conservative businesses sits elsewhere. We can find it out on the platforms that unite and divide us - social media.

Outrage rules the day, and I agree with Howard Stern

And so, this past week, we saw peak anti-ESG as far-right conservatives took to protest Bud Light for working with Dylan Mulvaney, a transgender influencer. Kid Rock felt so strongly about the marketing effort that he shot a case of Bud Light in protest, while others threatened boycotts. Unfortunately, someone took it further to call in a bomb threat to a Bud Light plant in Van Nuys.

Within days, a new Ultra Right beer hit Twitter, aligning the brand straight with conservative values and angrily against progressive values. Bizarrely, the ad contains a stark and violent warning to “stay the f*** away from our kids” before ending with “tastes like freedom.” Apparently, that freedom doesn’t extend to all Americans, as Dylan Mulvaney was born in California, but I digress.

My gut reaction is, wow, just wow about all of this. If you are this upset about a marketing effort built to engage new communities through an active influencer network (which sounds extremely boring, by the way), you need some serious help. Perhaps talk to the people you love the most in your life for perspective.

From an ESG perspective, your opportunity to align with conservative values doesn’t have to target others.

I researched Mulvaney this week and couldn’t find anything remotely as controversial as making active threats in a marketing campaign.

This brings me to what Howard Stern said this week:

I love when people are in love. You wanna be a woman? Be a woman. You wanna be a dude, be a dude. Be whatever you f—ing want.

Still, beyond the outrage, the reality is that there is enough beer (and business) to go around. There is simply no need for what we’ve seen this past week. Brands looking to engage customers and employee talent through these new efforts are not stating that there isn’t room for everyone or taking something from one group to give to another. These efforts are described as inclusive because that’s what they are. The efforts against them are exclusive, which never works well for anyone and has led to the continual escalation of outrage.

And so, we have a statement addressing the outrage from the CEO of Anheuser-Busch, the parent company of Bud Light, which apparently has made no one happy, and I think I see why. For me personally, it sits with two sentences on one line:

We never intended to be part of a discussion that divides people. We are in the business of bringing people together over a beer.

I do not doubt that the first sentence is true. However, it wasn’t the company that was divisive but the over-the-top social media reactions that were. Still, we’re in a world of new stakeholder accountability, which can go either way, depending on your stakeholders. Yet, if this campaign isn’t a material issue, perhaps there isn’t a long-term concern. Per a quote from Eddie Stableford, a food and drink branding expert in Newsweek:

I don't think it's necessarily true that all PR is good PR, but I think when it's on matters of principle, as indeed this is, then yes, certainly in terms of giving them appeal into territories where they're probably looking to expand what they're doing.

It will be interesting to see if Bud Light gains new stakeholders at the expense of old ones. Overall, there may be no lasting impact either way.

More interesting to me is the second sentence from Bud Light’s statement. I agree that, from the perspective of purpose, Bud Light and beer can bring people together. Still, this messaging falls completely flat because there is no evidence that beer can reach across the aisles to progressives and far-right conservatives and bring them together. The outrage has been validated due to a lack of proof, leaving the brand in a precarious position to return to the status quo.

As stakeholders become louder and louder on every issue, companies are leading with reactive responses to outrage on both sides, assuming it might quell boycotts and value erosion. Wouldn’t it be something to witness a brand put at the center of an issue rising to its purpose?

Speaking of a missed opportunity…

In the confluence of events this past week, there’s one more around this topic worth considering. We’re about to see a business model built on outrage and fueling divisive controversies (as evidenced here, here, and here) be tested with the Dominion Voting Systems and Fox News trial and/or settlement.

There can be no doubt that Fox News has built viewership on conservative-leaning values and news personalities. As with any company, aligning with their stakeholders, in this case, conservative viewers is a material issue. Like GloriFi and Parler, Fox News, similar to any right or left political-leaning news network, is a values-led alternative.

There appears to be ample evidence that Fox News knowingly misled the public about the accuracy of Dominion voting machines. Now, the case is moving to trial but is on pause due to settlement discussions. Dominion Voting Systems could receive a substantial payout in a settlement. Still, future risks may emerge from other news sources or politicians if they don’t directly address the US trend toward doubting election integrity through a trial. This type of disinformation is so believable and reasonable that it can be difficult to solve, leading to an emerging material risk.

What happens next will be an interesting Governance case study around short-term benefits (settlement) vs. long-term resilience (trial, but outcomes not guaranteed), all centered around a business model that leads with values and has over the long term with much success. Which opportunity will Dominion seize, and what happens next?

Only time will tell if outrage is a stakeholder value you can build a business around. So far, it has worked, but its limitations are rapidly catching up.