American capitalism has been undergoing a dramatic transformation: Businesses across the economy are wading into politics, largely in a progressive direction. Although corporations have long supported candidates and causes in pursuit of policies that benefit their bottom lines, in recent years corporate America’s political activism has extended far beyond issues directly tied to profitability. They’ve done so consistent with the influential Business Roundtable’s 2019 redefinition of the purpose of a corporation from maximizing shareholder value to a much broader social mission that includes environmental sustainability, demographic diversity, and “dignity and respect.”
Some have termed this an “awokening.” It has manifested itself most notably in companies’ embrace of “environmental, social, and governance” (ESG) policies. One survey shows that some 82% of large U.S. corporations devote space in regulatory filings to demonstrate their ESG bona fides, such as instituting “diversity, equity, and inclusion” (DEI) initiatives, and reducing their carbon footprints. Every Fortune 100 company today endorses DEI. The world’s largest and most powerful banks and other financial services firms are allied in their desire to do their part to get to “net zero” carbon emissions – and have leveraged their market power to encourage businesses across the global economy to do the same. Companies have also taken public positions on hot-button issues from guns and abortion to immigration, voting rights, and criminal justice.
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