Brands Taking Stands™ | Principles and Politics Collide Over Tariffs

Sep 26, 2018 2:45 PM ET
Newsletter

THE BIG STORY

Principles and Politics Collide Over Tariffs

The collision of principle and policy in current affairs has just ratcheted up several notches in intensity. The reason? The latest round of tariffs on Chinese goods imported into the U.S. that takes direct aim at profits at a number of the largest multinationals. After losing the lobbying battle to stave off this latest round, these companies are going public with their protests, hoping to encourage a rollback by taking a collective stand against a policy that hits their bottom line.
 
The issue in play revolves around the best way to deal with the numerous trade frictions with China. While supportive of addressing those complaints—such as the uncompensated use of proprietary intellectual property, and the requirements for U.S. businesses to have a Chinese partner whether wanted or not—American corporations are opposed to tariffs that force them to choose between cutting their profit margins or hiking prices to consumers.
 
First among the brands taking a stand at this intersection is Walmart. In a letter sent prior to the imposition of the latest tariffs imposed on $200 billion worth of Chinese goods, and then released publicly after their announcement, the company warned of adverse consequences: "Either consumers will pay more, suppliers will receive less, retail margins will be lower, or consumers will buy fewer products or forego purchases altogether.”
 
Other retailers echoing a similar position include Apple, Target, Fitbit, Hewlett Packard Enterprise, Home Depot, Dell Technologies, Intel, Newell Brands, Mattel, Whirlpool, and Carrier.

Organizations representing thousands of businesses have spoken out against the tariffs. The U.S. Chamber of Commerce, the Business Roundtable, the National Association of Manufacturers, the National Retail Federation, and the Koch Network are among the numerous top business groups that have stepped up their efforts to push back against the tariff policy. And new associations have been formed to double down on the stance, including Americans for Free Trade, which itself has been joined by other large trade associations such as the Consumer Technology Association, American Petroleum Institute, American Apparel and Footwear Association, Association of Equipment Manufacturers, Toy Association, and National Fisheries Institute.

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NEWS YOU CAN USE

That Nike Ad Story: The Latest Chapter
If your marketing chief came to you, the CEO, and said that a proposed new ad campaign for your company would be extremely controversial, that it would gain millions of dollars in earned media while causing a short-term dip in the share price of about three percent, but that in the long-term, it would boost the share price to an all-time high and add $6 billion to the company’s valuation, you could be forgiven for being skeptical. But that’s exactly what has happened in the fallout from Nike’s provocative “Kaepernick” ad campaign. After a few initial noisy reports of burned shoes and proclaimed boycotts, it turns out that the company has sold 61 percent more merchandise since releasing the ad, according to Reuters.

As the company sells the majority of its shoes to the under-30 crowd, a demographic cohort that is overwhelmingly supportive of social issues in their consumer choices, the campaign looks like a perfect alignment of a high-risk corporate cause with equally high profit. The full case study for this campaign and its results will be a classic.

More Bands Taking Stands
The Black Eyed Peas have joined the ranks of bands speaking out on social issues. The band has released a music video for its song, “Big Love,” to protest gun violence and the family separation policy for immigrants. “Big Love” calls on Americans “to use the power of their vote to support candidates who promote compassion over cruelty.” Proceeds will benefit March for our Lives and Families Belong Together, two advocacy groups for the respective causes. The Black Eyed Peas join Lin-Manuel Miranda, John Legend, and Logic who have voiced opposition to the separation policy.

Watch the music video here. (Warning: It is very graphic.)

Values and Returns Matter to Investors: UBS Survey Delivers the Data
A new report from UBS reports on 5,300 investors with at least $1 million in investable assets across 10 markets to evaluate attitudes towards sustainable investing. Among the key findings:

  • 65% believe it is “highly important” to help create a better planet.
  • 81% align spending decisions with values
  • 12% of U.S. investors report having sustainable investments, compared to 39% globally. However, 49% of the U.S. investors’ portfolio assets are dedicated to sustainable investments, the highest of any country.
  • 51% of U.S. investors expect sustainable investment returns to match those of traditional investments. 19% expect sustainable investments to outperform traditional investments.
  • 58% of investors expect sustainable investing to become the standard approach to investing in 10 years.
  • 72% of young investors have sustainable investments.

The survey includes a helpful breakout of the various approaches to sustainable investing: Exclusion, integration, and impact investing—a measure of how quickly the idea has become a complex activity as it spreads throughout the investment industry. Brands with missions and principles embedded in their strategies and practices will find an increasingly receptive market in this development. Get the full story here.

C-SUITE COMMENTS

“Our messaging with our shareholders has changed. We stopped giving quarterly guidance. We reduced our guidance metrics. We said, ‘We’re going to invest for the future.’ We had some investors leave because they wanted more dividend or more share buybacks. We cut our share buyback in half. We didn’t increase our dividend until we had a lot of extra cash on hand. You get the shareholders you deserve.”

— Mark Bertolini, chairman and CEO, Aetna
Excerpted from the New York Times Corner Office

PEOPLE ON THE MOVE

Peter Paul van de Wijs has been appointed chief communications officer for the Global Reporting Initiative. As head of GRI’s marketing and communications team, van de Wijs will be responsible for developing and implementing GRI’s global internal and external communications strategy. He will also be a member of the GRI executive team, reporting directly to GRI chief executive Tim Mohin. Previously, van de Wijs led his own business and has held executive positions at the LEGO Foundation and the World Business Council for Sustainable Development (WBCSD). He has also held various international positions in communications, sustainable development, government affairs, and issues management at The Dow Chemical Company, including leadership of Dow’s Global Water Strategy team. 

Alix Guerrier has been named chief executive officer of GlobalGiving. Guerrier is the co-founder and former president of LearnZillion, one of Fast Company’s 10 most innovative education companies in 2014. She has nearly a decade of experience building and scaling a technology platform to support individuals and enterprises, and doing so by listening to its teachers and other stakeholders to iterate and improve. GlobalGiving is the first and largest global crowdfunding community for nonprofits.

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