Posted Oct 3, 2022 11:11 AM
On the other side of the Atlantic, the world of responsible investment is being put to the test by social debates. In Texas, the director of the budget wishes to dissuade his pension funds from investing in socially responsible funds, accused of boycotting energy, a strategic sector of this State. Asset managers offer to engage in anti-woke activism, or to invest in companies shunned by ESG (environment, social and corporate governance). The Twitter-Elon Musk saga was itself heavily colored by politics, with Musk portraying himself as a champion of free speech.
The initial promise of the ESG was that of a moral and reasoned finance, placing itself far from political passions. This promise is confronted with its own limit: in the population, the values are multiple and sometimes in contradiction. Business and finance are not immune to these conflicting values.
A New Trend in Modern Capitalism
These unprecedented shock waves could prefigure a new trend in modern capitalism, that of an economy segmented by the fractures of politics. In the United States, companies are less and less able to stay away from the great debates of society. Some have had to choose their side in the face of the cancellation of the constitutional protection of abortion, by financing the abortions of their employees. The CEO of Disney was forced to position himself against the governor of Florida in the debate on the teaching of sexuality in school.
Companies can no longer confine themselves to pluralism (flattering the values of each other) or neutrality. They must commit at the risk of losing some customers and employees. We see the emergence of two parallel economies, with their galaxies of consumers, employees, suppliers, shareholders united by common political convictions.
Multinationals do have a nationality
The polarization of the economy is accentuated just as brutally because of the constraints of geopolitics: the multinationals must choose to which bloc they belong. The war in Ukraine forced almost 1,000 companies to withdraw from Russia. Sanctions taken by States played a role, but pressure from stakeholders (shareholders, customers, employees) was decisive.
The rise of tensions with China and the question of human rights are pushing Western companies to relocate their production to their national territory (one thinks, for example, of the American semiconductor plan). We discover that the multinationals have, after all, a nationality and that it can dictate to them to backtrack on the highway of globalization.
Soon, multinationals for moderates?
The theory of “gentle commerce” promised to dispassionate human relationships through economics. Merchant interactions are by nature transactional: for everyone, it is only a question of improving their consumer satisfaction, not of engaging in a major societal debate. But, as we can see, this separation is no longer effective. Should we be worried about it? It’s not that obvious.
Choosing a product and choosing your employer means choosing the causes you defend. […] The Old Continent can play the card of multinationals for moderates.
The political differentiation of companies is becoming a new field of civic engagement: choosing a product and choosing your employer means choosing the causes you defend. Moreover, polarization towards the extremes is no more a fatality in economics than in politics: members of the circle of reason also want companies that embody their values.
This is perhaps where the Old Continent, less polarized than the United States, can have a card to play: those of the multinationals for moderates.
