The New ESG…P?

Nature abhors a vacuum.  So, apparently does civil society.  With our political leadership increasingly MIA – Missing in Action or MIsAligned—when it comes to fundamental governance issues about which our populace cares deeply, the private sector is stepping in to enforce common sense and the rule of law.  Of course, that star has been rising for over a decade now, evolving through the more obligatory phase of “corporate social responsibility” to the activist ascension of “ESG.”  Dick’s Sporting Goods undertook the highly symbolic step of discontinuing gun sales in the wake of mass shootings; CVS took cigarettes off its shelves.  Both were attractive product categories, yet both concluded that the social ills caused by them were antithetical to their company’s purpose and values.

Nike decided to take a knee with Colin Kaepernick, which was a decidedly socio-political stance unlinked to a specific product/market decision.  Since the tragic spectacle of the armed incursion into our nation’s Capitol last week, and with the spectre of a similar riotous mob descending upon the upcoming inauguration, several businesses have decided to take more action that is even more expressly tied to the business of managing our nation.

Airbnb has announced that it is cancelling existing and blocking future short-term rentals in the DC metropolitan area.  Several law enforcement agencies have advised the public not to visit DC during the inauguration, but clearly Airbnb has reason to doubt the force of their guidance.   What better way to discourage visitors than to deny them temporary housing?  It’s difficult to imagine that a company the likes of Marriott could follow suit, given the necessity of maintaining operating cash flow during an already challenging economic time.  Airbnb’s status as mostly a pure platform play without significant staff and infrastructure costs to bear enables them to stare down the financial impact without unduly angering shareholders.

Delta led the major US airlines in announcing that they would refuse checked baggage containing weapons for all flights into the DC metropolitan area.  Many state and local governments have approved the militarization of our public spaces by sanctioning the right to bear arms indiscriminately.  Private businesses, however, can limit the presence of weaponry within their domains and are increasingly doing so.  Some restaurants and retailers here in Atlanta have installed metal detectors and/or security guards who frisk entering patrons to ensure that weapons are not brought onto their premises.  US Airlines realized they had a powerful role to play in limiting the transport of deadly weapons into a potentially incendiary socio-political gathering scene and played their cards.

Twitter has garnered the most press with its highly public and ceremonious de-platforming of our Tweeter-in-Chief.  (One wonders what the last four years would have looked like if Twitter had made a categorical decision not to host accounts from any elected officials from the beginning.)  But other social media platforms and payment processing engines have quickly followed suit to disable the calls to violent action and their associated fundraising on platforms like Parler.  And this decision is spurring the most rancor: the de-platformed, who believe their First Amendment rights are being violated, are loudly objecting.  Those groups and individuals should re-read the Constitution.  They are still able to speak as much as they want; they simply are no longer permitted the exponential amplifier of a privately-owned and -administered social media site, which has clear rules of conduct for inclusion. If Congress passes legislation dubbing these sites public utilities and regulating them as such, then arguments for free speech would become legitimate, but we are a long way from that outcome…antitrust suits by the DOJ and State Attorneys General notwithstanding.

In more conventional corporate public service, Disneyland has announced that its Anaheim-based theme park—one of the parking lots to the Toy Story attraction, to be precise—will soon open as a “super POD (point of dispensing”) for up to 7,000 Covid vaccine recipients daily.  Granted, this action is a tad more self-serving than the other corporate actions: until this pandemic is under control, Disney’s theme park revenues are way down.  But LA and every other major city has no shortage of public or quasi-public facilities where they could host super-PODs.  LA’s Dodger Stadium, San Diego’s Petco Park, and Sacramento’s CalExpo are also enlisted in the mass vaccination effort.  The fact that a private company like Disney has stepped up and offered its considerable crowd-management expertise speaks to the void left by a disjointed and mismanaged vaccine roll-out by some among elected and appointed officials.  And a big Sheriff Woody cowboy hat’s off to Disney for stepping up to this public service for Southern California.

It is unclear whether this new assumption of the mantle of quasi-political governance by leading corporations is situational and temporary, or whether we are embarking on a new phase of ESG that intentionally subsumes elements of governance where our political systems are dysfunctional.  Large companies continue to accrue size, power, and followership; and they may channel a more representative and unified voice from American constituencies than our elected officials at this point in history.  If so, we can continue to expect to see corporate capitalism exercise influence in these domains and others in the future.

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