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29 Oct, 2023 12:12

No more culture wars? Corporate America is finally realizing that getting ‘woke’ is bad for business

Major brands and Hollywood studios appear to be questioning the benefits of social messaging as investors like BlackRock reverse course
No more culture wars? Corporate America is finally realizing that getting ‘woke’ is bad for business

From Hollywood studios to beer makers and personal hygiene brands, for the past decade corporate America has been pushing increasingly progressive ideology, often to the outrage of a large portion of its target audiences and even to the detriment of its sales. But judging by recent statements made by some of the most influential figures in finance, there may be a small glimmer of hope at the end of this “woke” nightmare.

Over the years, the phrase ‘get woke, go broke’ has time and time again proven to be more than just a popular catchphrase. Take for example Gillette, which cost its owner Procter & Gamble $8 billion after the release of its infamous commercial that tried to take a dig at “toxic masculinity.” Or Budweiser, whose Bud Light used to be one of America’s top-selling beers but is now facing a nationwide boycott after the company did a catastrophic collaboration with transgender activist Dylan Mulvaney. 

And, of course, there are Disney and Netflix who are still trying to win back their audiences after consistently releasing formulaic, preachy, LGBTQ agenda-driven films and TV shows that audiences are refusing to watch.

But, despite the boycotts, diminishing sales, and an increasingly frustrated customer base, these companies have refused to back down from their ‘woke’ messaging and have not shown any sign of going under any time soon.

The thing is, that aside from activist writers, producers and marketing directors who aim to spread their questionable ideas about the world as far and wide as possible, there has always been another underlying reason why these companies have pursued progressive messaging. And that is ESG, or Environmental, Social, and Governance ratings.

ESG standards

As with all billion dollar corporations, money is made not only by selling stuff, but also by attracting investments. For years, companies like Disney, Netflix, Budweiser, and Gillette relied on their ESG ratings to draw in investors and keep their shareholders happy.

The concept of ESG was first introduced at the United Nations back in 2004. On paper, these principles were meant to be a force for good and encourage companies to be more transparent, plus environmentally and socially responsible. The non-financial metrics were supposed to serve as a basis for companies to evaluate and rank their commitments to goals such as promoting diversity, fighting climate change, and performing social outreach, among other issues.

But in practice, ESG-compliant companies have instead consistently faced accusations of exclusively promoting progressive, liberal, or ‘woke’ ideology and focusing too much on keeping up their ESG ratings instead of listening to their customers and giving them what they ask for.

Billionaire Elon Musk, for example, has described ESG standards as “the devil” and a “scam” perpetrated by “phony social justice warriors” after several tobacco firms and oil giants like Exxon scored higher in the ratings than Tesla.

RT

The forces behind ESG

Financial giants like BlackRock, Vanguard, and State Street (aka Big Capital), which manage trillions of dollars in investments and control some of the largest shares in most Fortune 500 companies have been using their influence to strong-arm companies all over the world to feverishly embrace ESG principles.

ESG ratings have effectively become a means to blackmail companies to push progressive ideology. Environmental responsibility has been distorted to mean unrealistic Net Zero demands. The Social rating is used to judge how much a company focuses on promoting modern gender ideology. And to get a good Governance score, companies have to hire Diversity, Equity, and Inclusion (DEI) officers and make sure their boards are of the ‘correct’ political mindset.

As explained by entrepreneur and GOP presidential candidate Vivek Ramaswamy, fund managers can make it “very difficult for you if you don’t abide by their agendas.” Companies like BlackRock can force top corporate management teams and boards to play by their rules because they possess the power to “determine, in many cases, executive compensation and bonuses and who gets re-elected or re-appointed to boards,” he said. 

Meanwhile, BlackRock CEO Larry Fink, who has become known as “the face of ESG,” has warned that if a company, either public or private, doesn’t embrace ESG and refuses to engage with the community and have “a sense of purpose,” it will “ultimately lose the license to operate from key stakeholders.”

Change of heart?

However, this year, those same money managers have seemingly started to reverse course and drop support for ESG investment strategies.

In September, the Vanguard Group announced that it had approved just 2% of ESG resolutions brought by shareholders this year, down from 12% in 2022. Meanwhile, BlackRock, the world’s largest asset manager, approved only 7% of the social and climate proposals that it faced this year, compared to 24% in 2022. 

BlackRock’s global head of investment stewardship, Joud Abdel Majeid, explained the low approval ratings by citing a “continued” decline in quality of proposals, describing them as “overreaching, lacking economic merit, or simply redundant.”

Even Fink, who almost single handedly pushed these standards to the forefront of the business world in order to “force behaviors,” has also recently stated that he himself “doesn’t use the word ESG anymore, because it’s been entirely weaponized” and “politicized by both the left and right.” 

That was after Fink reported earlier this year that his company had lost approximately $4 billion in managed assets tied to ESG backlash. Admittedly, those losses have had a negligible impact on BlackRock’s nearly $9 trillion fortune.

RT

‘Woke’ companies, especially in Hollywood, might have to focus on something other than divisive culture wars

It could be argued, however, that the move away from ESG, or at least certain aspects of it that have proved to be particularly counter-productive, has already been taking place. For example, when it comes to the Governance aspect, a large number of companies, including major corporations like Amazon, X (formerly Twitter), Nike, and Disney have already started to purge their DEI divisions and have fired tens of thousands of “diversity staff” and laid off their Chief Diversity officers over the past few years. 

But now with the biggest money managers starting to publicly shy away from ESG, the companies that have relied on these ratings over the past decade might also have to re-assess their strategies if they want to stay on top.

According to a recent report by Needham financial analyst Laura Martin, Disney CEO Bob Iger unexpectedly told a 120-person investor event in September that he wanted to “quiet the noise” on culture war issues because it was “not healthy” for Disney’s business, stressing that content should be “entertaining, not issues-focused.”

“It’s not our goal to be involved in a culture war. Our goal is to continue to tell wonderful stories and have a positive, positive impact on the world,” Iger also said back in July.

However, it’s debatable whether Iger actually wants to remove Disney from the culture wars or is simply looking for a way to make the company's role in pushing the progressive agenda less prominent and minimize blowback. 

So far, Disney hasn’t announced any concrete steps to move away from the “culture war” and it will likely take at least a year or more to see if it has indeed changed its direction. In the meantime, the media giant, like most of its competitors, continues down the path of stuffing its releases, like the upcoming Snow White remake, full of progressive ideology and digs at traditional values.

Netflix, which has become infamous for race-swapping popular characters in the name of diversity and pushing preachy LGBTQ content, is seemingly also trying to move away from the ‘woke’ crowd, albeit at a snail’s pace.

After losing over a million subscribers in 2022, the streaming service started crawling back to form by canceling progressive shows about antiracist babies, instead focusing on true crime documentaries and refusing to censor controversial comedians like Dave Chapelle and Chris Rock. 

RT

In the wake of Chappelle’s “The Closer” special last year, which drew the ire of many progressives, the streaming service even told its outraged staff in a memo that they should look for another job if they had issues working on content they didn’t agree with.

However, save for a few successful recent films and shows, like Guardians of the Galaxy Vol. 3 and One Piece that managed to distance themselves from the current culture wars and actually entertain their audiences, neither Netflix nor Hollywood as a whole have really ditched their old habits.

Aside from the ESG focus, the ‘wokness’ in most of these projects can also be explained by the fact that most Hollywood writers rooms are “staffed with incompetence and general assorted activists,” as pointed out by a Hollywood screenwriter who goes by Script Doctor on X. He explained that many of these “youngins” currently working in the industry had gotten their positions through inclusivity quotas. 

However, this summer’s Writers Guild of America (WGA) strike could result in changes to the industry, the screenwriter said on a recent podcast. After a nearly five-month stand-off, the Alliance of Motion Picture and Television Producers (AMPTP) finally signed a deal with the WGA under which writers will get more money for their work and will receive certain protections, including from AI.

But, at the same time, those changes also mean that studios will have to pay more for a single project, meaning they will be incentivized to maximize profitability by choosing quality over quantity. Script Doctor also noted that reforms to how writer rooms operate will also push showrunners to hire the best writers they can, instead of bringing on expensive “diversity hires” who bring little to no value to the table.

With ESG ratings slowly but surely making their way out the door, one can hope that companies will finally be incentivized to start focusing more on pleasing their customers rather than preaching and pushing fringe ideologies on their already frustrated target audiences.

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