Beyond the Midterms: How Social Impact Builds Long Term Allies

As Americans prepare to return to the ballot box for the midterms this November, political strategists and media figures are heralding a Republican takeover of the House. In preparation for the pendulum swinging to the right, many in Washington, D.C. are already taking their feet off the gas when it comes to engagement with Democrats, paying less attention to the issues they view as important to the left.

This is a mistake. 

In late 2021, ROKK Solutions, in partnership with Penn State's Smeal College of Business and Center for the Business of Sustainability, explored public opinion on environmental, social and governance (ESG) issues across 1,240 registered voters and found that, despite popular narrative to the contrary, a majority of voters on the left and right alike care deeply about issues that impact society: 75 percent of Democrats and 52 percent Republicans agree that climate change is at a crisis level, and 62 percent of voters agree that diversity and inclusion efforts are a priority (68 percent Democrats, 52 percent Republicans), just to name a few. What’s more, bipartisan support for these areas dramatically increases among Americans under the age of 45. 

Debunking the myth that issues related to ESG are highly polarized on its own is a pretty good reason for companies to keep their feet on the social impact gas, but it’s not the only one. As we move into the midterms election season, smart businesses should prioritize long-term relationship building across the aisle. 

In periods of divided government, the likelihood of major legislation that disrupts bottom lines becomes smaller. This seemingly quiet time gives companies an opportunity to prioritize strategic engagement as well as the momentum to build alliances with those who share their values. Highlighting community impact for Members of Congress and their staff is one way to make the most of divided government and position an organization for long-term success, no matter who is in the majority. For example, sharing environmental efforts with political stakeholders who are prioritizing climate policy and finding ways to support their proposals over the next two years will help create long-term allies who will be in a position to support business when the pendulum swings again. 

As many companies already know, though, political stakeholders are not the only ones to consider when it comes to social impact. The activist community is increasingly vocal on issues related to environment and social equity, and if history is any indicator, will become more so if Republicans take the House of Representatives this fall. Organizations that are already pressuring companies to take clearer stands on ESG issues are working to up that pressure, and if Democrats lose the House as expected, this community will view their corporate campaign as especially important. 

In the wake of George Floyd's death and the Georgia voting rights bill, a number of companies were name checked by groups like the NAACP and SEIU. Our research indicates that voter expectations of business response to external social issues like these will only continue to grow as younger generations enter and lead the workforce and increase their purchasing power. This trend, combined with an intensified activist push on business to make ESG progress, means that companies may find themselves in the hot seat at any point after the midterms if they miss opportunities to publicly engage on their social impact efforts.

If these risks and opportunities are not enough to convince organizations to continue building their ESG profiles through impact-driven initiatives, perhaps the most fundamental argument for action is. So much has been written about the so-called triple bottom line, but research from Impact ROI hammers home the importance of social responsibility to business imperatives. According to them, organizations that adopt best practices in the ESG space enjoy a number of financial benefits, such as outperforming peers in the stock market, increasing sales by as much as 20 percent and reducing employee turnover, among many others.  

There is clearly much to gain by prioritizing ESG in 2022 and beyond. By engaging early and often with consumers, policy makers and other issue stakeholders, smart businesses have an opportunity to build their reputation for the long term and advance their policy goals beyond just the midterms.

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