Coke, woke, catches flack from a new direction

By Tom Baxter

If you were channel surfing and missed the first few seconds of the new ad slamming Coca-Cola and its CEO, James Quincey, you might think it came from some lefty consumer organization — “poisoning America’s youth and worsening the obesity epidemic” — or maybe a group of activist investors — “years of dismal sales… terrible 2020 results.”

Actually, it’s the product of a right-wing group which is also targeting Nike and American Airlines. Coca-Cola and American Airlines have opposed Republican voting legislation in Georgia and Texas, and Nike signed a letter opposing state laws banning transgender athletes from participating in women’s sports. The three companies’ CEO are all named in the ads.

“Start serving your customers, and not woke politicians,” the anti-Coke ad says.

The ads claim these big corporations are “getting political,” as if business and politics formerly operated at a pristine distance from each other. Anyone who has spent time at a state legislature, a city hall or a county zoning board knows how ridiculous that idea is. Most of what government does is business, and business plays close attention to how government does it.

What has changed is the way business, government and customers — many of whom are also voters — intersect. More than is generally recognized, this has a lot to do with the changing way businesses relate to each other.

Last week, there were protests at a Nashville hat store which was selling patches with the Star of David and the word “unvaccinated,” a la Marjorie Taylor Greene’s assertion that vaccinations “passports” were “just like” the Nazis forcing Jews to wear a gold star during the Holocaust. Much more damaging, from a hat store perspective, was an announcement on Twitter from the Stetson hat company that it was pulling its goods from the store.

The same thing might have happened a couple of decades ago, but it would have happened more quietly. Businesses traditionally shun controversy, but in the age of social media they have been compelled to be more public in the way they distance themselves from negative associations.

“Capitalism as we know it is evolving,” is a motto of Engine No. 1, an activist investment firm which last week was involved in a dramatic example of this change in business-to-business relationships.

Against the strenuous objections of the company’s executives, ExxonMobil’s shareholders elected at least two directors committed to action on climate change from Engine No. 1’s slate of challengers. The vote was suspended at one point as company officials desperately tried to turn the tide, and the results of the elections for two other seats on the board still haven’t been announced.

When you put things that way, it might conjure visions of riled-up, Jimmy Stewartesque “investors” storming the gates. But the shareholders we’re talking about here are the big investment houses and mutual funds, and the nation’s largest pension funds, which gave Engine No. 1 key support in its effort to shake up the oil giant. BlackRock, the world’s largest asset manager, is also reported to have voted with the dissidents, reflecting a growing nervousness over how climate change might affect the stability of the economy.

Many of these financial giants also allied with the Dutch shareholder activist group Follow This to force Chevron’s board to go further in its efforts to reduce carbon emissions. The measure passed by 61 percent. To make last Wednesday a truly terrible day for Big Oil, a Dutch court ordered Shell to cut its carbon emissions by 45 percent over the next decade.

In the case of Exxon Mobile and Chevron, the activists were able to convince big-money investors that the oil companies’ resistance to environmental changes was also affecting their bottom line. They argue that to be financially successful today, companies have to assume a broader range of social and environmental responsibility. This has spawned a new acronym: ESG, for environmental, social and corporate governance.

Ideas like this were bound to face blowback from the right, and as a result, companies like Coca-Cola are being attacked by conservatives for many of the same offenses that liberals have complained about in the past. That, too, comes with doing business in this day and age.