As Anheuser-Busch, Disney, and Target have taken their liberal agendas to the extreme, conservatives have pushed back, punishing these companies with boycotts costing them millions of dollars in sales and billions in the market capitalization of their stock.
Some economists, money managers, and business leaders think this is just the beginning of even greater influence-wielding by consumers, and that more lawsuits challenging the legality of environmental, social, and governance (ESG), diversity, equity, and inclusion (DEI), critical race theory (CRT), and other liberal agendas are coming.
Having witnessed the Bud Light and Target boycotts gain national attention and damage those companies’ reputations and bottom lines, corporations that have audaciously ignored hundreds of millions of consumers — or, by party lines, half of America — “will now have to think twice about rejecting conservative values,” says Stefan Padfield, an associate at the National Center for Public Policy Research Free Enterprise Project.
Some conservatives believe the Bud Light boycott — which has cost parent company Anheuser-Busch $19.57 billion in market cap as of Sept. 18, 2023 — is a watershed moment.
“The pendulum is starting to swing back away from wokeness to a more moderate approach,” says Michael Busler, a public policy analyst and a professor of finance at Stockton University in Galloway, New Jersey.
There are signs that the anti-woke backlash is just beginning — and may continue all the way through the November 2024 presidential elections.
“We can follow the model of ESG proponents that bullies corporate managers to comply with their beliefs, by boycotting their goods and divesting ownership of their stocks,” says Bill Flaig, CEO of Ridgeline Research, manager of the American Conservative Values exchange-traded fund.
While the media would have one believe that the majority of Americans overwhelmingly support companies espousing social causes, Flaig thinks “the numbers are smaller than we might suspect, given how vocal the left is and its laser focus on social and cultural issues.”
Greatest Concerns of Politically Conservative Investors
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Source: Survey conducted by the American Conservative Values ETF
A recent Gallup poll shows only 25% of Americans identify as politically liberal, Flaig says. “Considering the left’s inherent hypocrisy and virtue signaling, I estimate the figure may be only 5% are radicalized,” he says.
Most consumers and investors really only care about the quality of the goods and service they purchase, and the return on their investments, Padfield says.
“We believe in capitalism as the best way to lift up all boats — but that corporations in the U.S. and elsewhere not only have gotten overly politicized, but in some cases, that they have broken the law with DEI,” says Padfield, whose organization advocates for conservative objectives at publicly traded companies.
“A parallel economy is rising, where consumers are increasingly able to buy products from companies whose ideals are aligned with theirs,” says Joe Voboril, CFO of Colombier Acquisition Corp., which handled conservative online marketplace PublicSq’s initial public offering. “The commercial opportunity to serve those customers is not in billions — it is in trillions of dollars.”
Legal Fight
Following the Supreme Court striking down affirmative action in college admissions on June 29, 2023, lawsuits against companies’ DEI policies that discriminate against various ethnic groups, including whites, have begun to proliferate. So has ESG litigation.
Shareholders, pension plans, governors, and conservative groups such as The Heritage Foundation have begun suing investment management companies and state pensions for putting ESG ideals ahead of their fiduciary duty to deliver the best possible returns for investors.
The Department of Labor in November ruled that 401(k) retirement plans may consider ESG factors when selecting their investment lineup — but does not require them to do so. Performance research has shown that ESG funds underperform traditional benchmarks, making 401(k) fiduciaries wary of offering them; only 13% of the 401(k) plans Vanguard runs offer ESG funds.
The Heritage Foundation and the American Legislative Exchange Council have asked state legislatures to restrict or ban ESG and other social-cause screens in corporate investments.
In addition, governors in Arkansas, Florida, Kentucky, Montana, West Virginia, and Utah signed state laws restricting using ESG as an objective in pension funds.
Stoking Woke
Why have so many Fortune 500 companies embraced liberal policies? These have gone so far as to give employees “abortion benefits”; integrate LGBTQ+ Pride Month and ESG into advertising and product campaigns; deplatform or censor conservatives on social media; back Black Lives Matter; endorse sanctuary cities and illegal migrants; and sound alarms over climate change.
Conservative commentators say it traces back to colleges and universities being run by liberal elites, politicians kowtowing to social agendas, and CEOs folding in the face of increasingly strident stakeholder capitalism.
“The debate over corporate social responsibility has been going on for decades, but the shift has been much greater since [President Joe] Biden took office,” Busler says.
An earlier, critical turning point was the Occupy Wall Street movement of 2011, Padfield says. “The bankers saw the pitchforks coming for them and looked for ways to appease the radicals,” he says. Making ESG, CRT, and DEI policies formal corporate goals signaled to the anti-capitalist activists, “‘We will join you, so point your pitchforks elsewhere.’”
This is not the first time conservatives have thrown down the gauntlet.
“The other side of the argument, cemented in an op-ed by Milton Friedman in The New York Times on Sept. 13, 1970,” Busler continues, “is that the primary or only function of business is to increase profits.”
As to why American businesses are espousing liberal objectives that they know are impossible — like Biden’s net-zero fossil fuel emissions by 2050 —Peter Huntsman, CEO and chairman of chemical manufacturer Huntsman Corp., believes it’s because they lack the courage and the leadership to stand up to the left or to laud the accomplishments America has made becoming more diverse and reducing pollutants.
“Today, we’re emitting roughly 6,500 million metric tons of CO2 — same thing we were emitting in 1970,” Huntsman told The Wall Street Journal. “And look at how much more electricity we’re using, and look how many more transportation and miles we’re driving. We’ve expanded the economy 30 times over, nearly, and core CO2 has stayed flat.
“We should be celebrating this achievement, shouldn’t we?”
Holding up a plastic water bottle, Huntsman added, “We can make 10 of these for the amount of plastic we used in one of them a decade ago. I don’t know why we don’t celebrate these accomplishments.”
As for companies becoming more diverse, between 1999 and 2019, the number of people of color and of women in the U.S. workforce grew by 26% and 18.5%, respectively, according to data from job website Zippia.
Strides have also been made in the representation of minorities in the C-suite, through more work needs to be done. Black Americans make up 13.6% of the U.S. population, according to the U.S. Census Bureau, but are just 5.9% of all CEOs in the U.S., according to the Bureau of Labor Statistics.
American Exceptionalism
It’s high time, Huntsman believes, for corporate leaders, politicians and the public to celebrate “American exceptionalism” and to stand up against the “vociferous cancellation orthodoxy.”
Political activism by Disney and other woke corporations “certainly is not being driven by what consumers want,” agrees Jon Schweppe, director of policy and government affairs at the American Principles Project.
“According to one study, nearly 70% of America’s CEOs affiliate themselves with the Republican Party. But because our education system almost exclusively produces loud, angry left-wing zealots, these CEOs have no choice but to surround themselves with these kinds of people,” Schweppe wrote in a Newsweek opinion piece. “Failure to please these ideologues would pose an existential threat … to the CEOs' livelihood.”
Since CEOs won’t stand up to woke agendas, institutional stockholders at investment management firms and pension funds, and retail investors, can step into the void and make an impact, Busler says.
“Consumers have plenty of recourse” if they think the policies or the politics at the companies where they shop “have gone awry,” Busler says.
Another important consideration: Goods and services cost more at companies that layer liberal policies on top of their sales targets, Busler says, so consumers ultimately can and should “vote” their dollars and their consciousness at the register.
The bottom line, Padfield says, is that “corporations will have to think twice about promoting cultural Marxism and rejecting conservative values — or at the very least, give the appearance of at least being willing to engage with conservatives.”
Flaig sums up the current conservative movement thus: “If I tie everything back to investing and maximizing shareholder returns, ultimately, we believe in meritocracy.”