DOES PATRIOTISM TRUMP SUSTAINABILITY?
Sustainability (ESG) has been front and centre of business discussions when the intended beneficiaries of commerce changed from shareholders to stakeholders.
Then, hardly noticed at first, things moved on. Companies rowed back on their commitments. Net-zero targets were postponed. ESG no longer got top billing in annual reports. It was even derided by some as 'woke capitalism'.
The new thing is corporate patriotism. [See Footnote]. It is still mainly in the USA but many European firms are affected. The pull comes from creating jobs and paying taxes at home; the push, from global insecurity and avoidance of trade embargoes on unfriendly countries.
When ESG is mentioned now, it is often only to support new patriotic anthems: foreigners pollute; they abuse human rights; they steal IP; they are untrustworthy; and on and on.
How should supply chains, marketing, operations and the rest respond?
Should they pivot in a U-turn?
Can their already long list of trading criteria be further lengthened?
Footnote: Article in this week's edition of The Economist (August 17th 2024), 'Patriotism is replacing purpose in American business'.
Senior Vice President Global Sourcing at Avantor
4moInteresting development in the sustainability space. Am not a fan of terms like woke capitalism or corporate patriotism, but they do reflect the times we are living in. Like many trends in life, there is a race at the beginning to be first, biggest, fastest until it reaches a point at the extreme where the pendulum swings back to some kind of middle ground. Not to say that is a better positioning, and one could certainly argue in the case of sustainability that meeting the goals will require something more at the extreme end rather than in the middle. As for the notion of bringing business back to a home country, there is some logic to that from a sustainability perspective regardless of any jingoistic tendencies. Of course, for many corporates what does bringing it back home mean if you are selling in multiple continents and countries?