Stakeholders Disconnected from Corporate ESG Efforts: Research

‘While corporate activism may appeal to a small, vocal minority, it risks alienating a broader base of stakeholders, including consumers,’ said Emilie Dye.

A Qantas Airways plane is seen decorated with the logo of the 'Yes' campaign for 'The Voice,' in Sydney, Australia, on Aug. 14, 2023. David Gray/AFP via Getty Images

In light of corporations increasingly engaging in social activism, new research has found that many shareholders, employees, and customers disagree with their companies’ social and political activities.

The Centre for Independent Studies (CIS) has released a report (pdf) shedding light on stakeholders opinions on corporate advocacy and activism.

The study, which surveyed 2,500 Australians (1,000 consumers, 1,000 employees, and 500 shareholders), found that most stakeholders were unaware of their companies’ social and political activities.

Specifically, 58 percent of the employees, 66 percent of the shareholders, and 44 percent of consumers did not follow their companies’ advocacy for social causes.

The figures were even higher for political causes, with 83 percent, 74 percent, and 65 percent reporting a lack of engagement.

Corporate Social Activism Misaligns With Stakeholders

According to the report’s co-author Emilie Dye, over 60 percent of employees and 41 percent of shareholders felt that corporate support for political causes did not align with their personal convictions.

“Among consumers, 60 percent say the corporate political advocacy rarely or never aligns with their views,” she added.

“In fact, 6 percent of employees say they have left a job because of their employer’s activism.

“The results suggested that far from being a mass movement, driven from the ground up, these activism initiatives are considered peripheral—if not largely ignored—by most shareholders and employees.”

While younger generations increasingly wanted businesses to intervene in contentious public debates, Ms. Dye said two-thirds of Gen Z respondents (born between 1997 and 2012) preferred companies to focus on providing good service and high returns, and stay out of public debates.

The report also found that consumers were twice as likely to avoid purchasing from a company they disagreed with, compared to those who would choose a company they agreed with.

When asked why companies engaged in social activism, 24 percent of respondents believed it was to increase profits, followed by fear of public backlash (22 percent) and gaining favour with the public and politicians (20 percent).

“The data suggest that while corporate activism may appeal to a small, vocal minority, it risks alienating a broader base of stakeholders, including consumers,” Ms. Dye said.

Echoing the sentiment, Simon Cowan, another co-author, said there was a “critical misalignment” between corporate activism and stakeholder values.

“This report should give strength to managers who feel bullied into taking a public position on contentious social issues, and make those who have been convinced to do so take pause,” he said.

The CIS report comes as companies in Australia and around the globe are increasingly engaging in political, environmental, and social issues.

During The Voice movement, an initiative by the Labor government to embed an Indigenous advisory body into the Australian Constitution, it was reported that 14 of the 20 top ASX companies supported the Yes campaign.

Despite the top companies donating millions of dollars to support the movement, it was overwhelmingly voted down by Australian voters.