The news releases rolled in last week, one after another, the numbers swelling with each one. More than 80 companies were demanding that North Carolina repeal a law that limits bathroom options for transgender people and blocks local anti-discrimination rules. A day later, it was more than 90. Then more than 100. Then more than 120.
It’s an extraordinary shift from eight years ago, when California’s Proposition 8 came up for a vote and the number of companies that lined up to publicly support same-sex marriage rights were fewer than five. It’s even a shift from two years ago, when the corporations speaking out against a “religious liberty” law in Arizona numbered 83.
Back in 2012, when Goldman Sachs CEO Lloyd Blankfein signed up to be a spokesperson for the Human Rights Campaign, he was called an “unlikely advocate.” In 2013, when Starbucks CEO Howard Schultz told a shareholder his support for same-sex marriage was “not an economic decision,” it was described as “bold.”
Now, when CEOs weigh in – such as when PepsiCo CEO Indra Nooyi called the North Carolina law “contrary to our values as a company” and one that “impedes our progress toward equality” in a letter Friday to the state’s governor – they’re described simply as joining the criticism. And that criticism now comes not only from all industries – technology to consumer goods to financial services – but at times includes threats to reconsider doing business in the state.
Corporate America’s evolution on gay rights appears to have reached a tipping point, one where so many companies have taken a stand on the issue that the risk of speaking out has been superseded by the risk of not doing so. The watershed levels of opposition to recent legislation in Indiana, Georgia and North Carolina has turned the question of “why would a company publicly wade into social issues like gay rights?” into another one: “Why wouldn’t they?”
What was once exceptional has become, in other words, almost expected.
How did it happen? Public sentiment surely is playing a role. A recent survey by Public Religion Research Institute finds that 71 percent of Americans support laws that would protect lesbian, gay, bisexual and transgender people from discrimination in jobs, housing and public accommodations. Data from the Pew Research Center recently found that 55 percent of Americans, and 70 percent of millennials, support same-sex marriage.
But Deena Fidas, the director of the workplace equality program at Human Rights Campaign, an advocacy group for gay rights, describes the now commonplace public support from companies as the result of more than a decade of outreach between the LGBT and corporate communities. “It’s perfectly understandable for the casual observer to look at North Carolina and think it’s trendy now to be pro-LGBT,” she said in an interview Monday. “But there’s a very strong structure behind this outreach.”
One factor has been the growth of the HRC’s Corporate Equality Index, which scores companies on their friendliness to LGBT issues and publishes it. When it was launched in 2002, just 13 companies received a perfect score. Fourteen years later, 407 have one. The index examines discrimination policies, employee benefits, presence of LGBT employee groups and a company’s external work with the LGBT community.
As companies began paying closer attention to these metrics, Fidas says, more corporate leaders started identifying with it, and more internal policies and benefits started shifting to accommodate gay workers. Because companies had been doing more to allow for greater equality for their LGBT employees, supporting these issues meant supporting employees, not just airing their voices about public or social policy.
Another major factor, Fidas says, were the state-level fights over same-sex marriage. A watershed moment happened in 2011, when New York became the largest state to legalize same-sex marriage. In the years that followed, says Fidas, “the business voice grew from just ‘it’s the right thing to do’ to ‘it’s good for our business.’ “ Having different laws in different states created headaches that made it harder to move employees from one state to another, for instance.
“That’s a very different leg to stand on when you’re justifying public policy [to] your shareholders or your board of directors,” Fidas says. “Indeed, it’s a social issue, but it’s also a material issue for our business in terms of how we move talent.” In a relatively short period of time, she says, companies got comfortable with taking state-level action. “In a major way, the state-to-state marriage fights warmed us up to the moment we are in now,” she said, with the current wave of state-level laws.
If there was a final straw for a willingness to speak out publicly on the issue, it was last year’s Supreme Court ruling, which upheld a right to same-sex marriage. As one author told the New York Times Friday: “The Supreme Court gave corporate America the political cover to speak out.”
In addition to these broader trends that have shaped the business world’s engagement on the issue, Fidas admits some companies may also be paying attention to what their competitors are doing. There’s “ strength and comfort in numbers,” she says. “Once you start to have leadership across three to four industries, all those initial leaders’ peers are asking ‘why aren’t we on this letter too?’ ”
Those who remain unconvinced might want to consider a recent working paper from professors at Duke University and the Harvard Business School. The research, covered everywhere from the Harvard Business Review to the Post to the Times, surveyed people about Indiana’s “religious liberty” law, including a statement in some of the surveys that was attributed to Apple CEO Tim Cook or other leaders about how the law would allow discrimination.
In those surveys, support for the law dropped sharply, an encouraging sign for any sincerely concerned CEO who’s become outspoken on the issue. But the study also found another sign of encouragement for CEOs. People who were told about Cook’s discrimination concerns also said in the surveys that they were more likely to buy Apple products. In other words, the business case for speaking out about social issues such as gay rights may go well beyond protecting the rights and interests of their employees.