What are the election’s implications for companies as they seek to protect and enhance their reputations—and how do they fit within the pressures we’ve seen companies face over the past years?
Moving forward, businesses will have to deal with two opposing forces:
Young people will continue to pressure companies to weigh in on social, political and cultural issues. Young voters came out for Democrats, and abortion ranked high on their concerns. These Gen Z voters—together with millennials—are more likely than older generations to believe companies should take a stand. They are companies’ future talent and future customers.
The counter-reaction. Governor Ron DeSantis, one of the big winners from this cycle, squarely took on "woke corporations." Conservatives will be looking at the coalition DeSantis assembled, as well as his very public fight against Disney.
So what does this mean for the landscape companies will operate in?
More theatrics. We may not see significant policy changes, but the theater of hearings will put pressure on companies. In the absence of actual legislative action, these sideshows also move to the main stage. Which in turn moves the center of conversation toward taking on "woke capitalism" – and generally more to the extreme.
Divided government. It’s possible we could see a situation where someone like Larry Fink from BlackRock is aggressively challenged by a Senate committee for not pushing harder on climate change—and the next day by a House committee for pursuing ESG.
Unexpected alliances. What unites Gen Z progressive and older blue-collar voters is a strong mistrust of large corporations. With labor seeing a lift in popularity among Gen Z, and part of the conservative movement questioning untrammeled free markets, expect unlikely alliances.
The unknowns. Corporations have spent recent years navigating sociopolitical flashpoints. In a volatile, uncertain environment, we should expect more of the same—especially as staying silent no longer means neutrality.
What we then see as the emerging battleground for business is the tension between the war for talent and the war on woke—the need to speak to the values and priorities of the next generation of talent while dealing with those who see ESG and DE&I as back door attempts to impose a liberal-left agenda.
In this context, our core guidance is to commit to be ready.
Gather information on your relevant facts, your people, your direct impact, your environment and your past.
Engage authentically. Prepare decisions. And activate across disciplines and outside help as needed.
The first week of COP 27 in Sharm El-Sheikh was punctuated by Friday’s Global Carbon Budget report that there’s a 50% chance the global temperature increase will surpass 1.5 degrees Celsius by 2030. The conference so far is also notable for including "loss and damage" on the agenda --compensating low-income and emissions countries for climate change impacts—in a historic first. And another unexpected outcome: Calls for remaking the development bank system to respond to climate change.
Here are other themes our Energy and Sustainability team is watching for:
The war in Ukraine has upended governments’ priorities and shifted political focus from the climate crisis towards short-term energy security. Challenges posed by spiraling prices for fossil fuels, the fragility of clean energy supply chains and higher interest rates have intensified tensions and deepened mistrust in the international community and will make for difficult conversations at COP.
Adaptation and concerted action to tackle the implementation gap. The most important challenge for governments at COP27 will be to demonstrate a willingness to act together in the UN context and to prove the resilience of multilateral cooperation in times of multiple crises as 2022 emissions increase. The outcome of the first ongoing Global Stocktake will reveal the collective progress and gaps from nations and corporates under the Paris Agreement.
Financing low- and middle-income countries’ pathway to net-zero and the question of reparations will dominate negotiations. Despite some progress at COP26, developing nations will demand more support while developed countries see themselves sliding into recession.
New interest in African oil and gas reserves exposes an old North-South divide. African countries are expected to double down on their right to exploit their own enormous oil and gas reserves, but finance is steering away from supporting such projects as global demand adapts. At the very least, the push for new investments in fossil fuels on the African continent could become a valuable bargaining chip for African nations when making the case for more financial support.
There are some bright spots–and corporates can lead the way. The U.S.’ massive Inflation Reduction Act and the E.U’s continued implementation of its Green Deal show real progress. Corporates can stand out by demonstrating credible implementation plans for their commitments.
As with most things in America in 2022, there’s a stark partisan divide when it comes to perceptions of Elon Musk’s purchase of Twitter.
Our Research and Insights team asked our insight community TrendSpotters—a group of 300 news-attentive voters—about how they felt about Elon Musk’s acquisition of Twitter from November 3-7.
Here’s what they found:
Nearly all Democrats surveyed (96%) want companies to stop advertising on the platform if safety standards are lowered, but such a move by brands would be opposed by nearly three-quarters (74%) of Republicans.
Democrats warn brands that they could appear complicit in supporting hate speech if they continue to advertise on the platform.
Republicans champion free speech – and believe it’s up to the consumer to decide what they read.
This reaction reflects strong partisan differences in reactions to Elon Musk’s purchase of Twitter – 60% of Republicans are pleased with news about the acquisition, but only 4% of Democrats are.
Other Republicans are indifferent (21%) to the news, while Democrats feel skeptical (30%), fearful (20%), or indifferent (20%) about this acquisition.
Democrats fear changes to the platform will worsen division and exacerbate "hate speech" – with concerns raised about Musk lifting bans or enabling imposter accounts through changes to the blue check.
But Republicans see the acquisition as a welcome corrective to the "silencing" of conservative voices on social media platforms, even if they don’t personally warm to Musk.
Reflecting their high level of media engagement and news-attentiveness, two-thirds of participants have a Twitter account – with a quarter checking it daily.
Our latest recommendations for how brands should approach Twitter are updated here.