On the eve of the
World Virtue Signalling Championship in Davos, the Spectator editorial dealt
with the concept of “woke capitalism,” a
phenomenon in which big business that, under normal circumstances, would not
dream of favouring one political party over another suddenly weighs in on the fashionable
culture conflict. The Spectator warns, “corporate
Britain should be wary of following corporate America by seeking to project
their ‘values’ through taking sides in culture wars.” Specifically, such values
involve diversity and the environment (climate change) and come from the left/liberal
school of thinking. Nowadays, corporates are falling over themselves to appear
greener than green and company prospectuses abound with schemes for carbon offsetting
(Greenwashing) and environmental “responsibility.” When I worked for Serco, more than 20 years
ago, that Company claimed to be progressive and was bound a code of corporate
social responsibility. I seem to remember plenty of arm-waving, particularly on bids for contracts, but evidence of social responsibility taking precedence over profit margin would have been hard to find. Nowadays,
companies strive for accreditation in Environmental and Social Governance (ESG)
rather like ISO 9000 quality. Company
policy must now serve all stakeholders rather than, as Milton Friedman suggested,
that the core endeavour of any business should be to increase shareholder
profit. However, before we dismiss Mr
Friedman, we need to be sure that it is the all stakeholder policies that are
driving the share price rather than the rather obvious fact that there was a
successful and resilient business model in the first place. In that case, woke initiatives just make you
feel better about making money.
By coincidence I was reading “Trail Blazer (the power of
business as the greatest platform for change)” by Marc Benioff, the CEO of
Salesforce. Salesforce is a huge and successful company, pioneering cloud
computing and employing over 45,000 people. I’m proud to say that my successful
daughter is one of the 45,000 which is how I came by the book.
Marc Benioff has form at Davos proclaiming in
2018 that “companies cannot afford to separate business objectives from the
social issues surrounding them.
It can
no longer be about growing or giving back, rather it must be about doing well
and doing good.”
Marc Benioff, who does not
appear reluctant to explain his success, tells us that the way to achieve good
in business is by embracing a culture in which your values permeate everything
you do and he warns us that “none of us can afford to sit on the side-lines.”
In his book, Mr Benioff donates his opinions
forthrightly.
There is none of the “I
think” with which Darwin introduces his writing, the hesitation with which
Faraday begins discussion on magnetic fields, or the deprecating “it seems to
me” that introduced the great theories of Einstein – Benioff gives it to us
straight and with the confidence of a messiah or Greta Thunberg, pronouncing
that “Einstein got it right” about solving problems
and
even, gratuitously reminding us that Einstein was one of his “boyhood heroes.”
But is it really true that such is the social and environmental pressure that buisiness faces a stark corporate choice, get woke or go broke?
All this greenwashing and diversity crusading sounds compelling
until you stop to ask, what values are being pursued and who decides them? Empirically,
no one seems to be able to offer any evidence that wokeness, for that is what
this is, directly influences the bottom line?
Even Benioff admits, “the funny thing about values is that their impact
is not always quantifiable – even for a company obsessed with data as we are.” But Salesforce ploughs on, generating $300
million in grants and 4 million hours of volunteer time. So what, as my DS at Staff College would have
challenged? Benioff doesn’t say.
It does not seem that there is a coherent ESG agenda and
companies greenwash to suit themselves. It
has even been suggested that companies milk the woke environment to deflect criticism
against the capitalist system itself.
Pledges of voluntary virtue are just old capitalism in lipstick as the
BBC Analysis programme observed yesterday.
So who is actually setting this ESG agenda, companies or the
government? Certainly, historically, there
are many examples of socially enlightened entrepreneurs doing good for their
workforce but the major changes in terms of employee rights and protections
have been legislated by governments. Do we really want media personalities and their tribe or even demonstrably successful entrepreneurs like Marc Benioff to control our lives? Surely, in a democracy, it is our collective sense of belonging, expressed
through elected representatives, who should be driving the ESG agenda and be accountable
for it. Crucially, companies should be paying taxes to support it, contributing
their fair share but not defining.
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