Brands and social purpose in a politically divided time

Record temperatures recorded in 2023 add to the long and frightening storyline of climate change. Scientists warn that this year's weather represents an entry into what they describe as "uncharted territory" and argue that humanity is living through a "defining moment" for its future. The duty to act is clear; our Earth Day 2023 survey reveals over two-thirds (69%) of Brazilians believe that if businesses do not act now to combat climate change then they are failing their employees and customers, even higher than the global average of 59%. Our Global Trends 2023 report shows another majority (79%) believe that we are heading for an environmental catastrophe if we don't change our habits.

The world is clamouring for a solution to the climate crisis – and companies are part of that solution. However, the issue is being sidestepped, with voices from across the political and business spectrum dragging the issue into the so-called "culture wars". The nascent "anti-GES agenda", for example, has been gaining momentum over the last year and is worrying environmental activists. The view has matured that the ESG acronym, created in 2004 to direct the world's sustainable actions, is now instrumentalised by a minority that seeks to impose its own progressive agenda at all costs. Add to the equation a loud and disruptive voice – like that of the world's richest man, Elon Musk – and we see that a previously peripheral opinion is suddenly amplified and reverberating across the political spectrum. In the United States, conservative presidential candidates, including former Vice President Mike Pence, have denounced the focus on "social purpose enterprises" as a way of subjecting economic productivity to a political ideology.

There's no reason  to panic: we've already seen this movie

This view is not new. In 1970, Milton Friedman argued that a company's social responsibility should be limited to "increasing its profits". Talk of "purpose" or "social conscience" was a mere distraction from the larger goal and risked undermining the competitive structure of the system. Indeed, for some today, companies should not be concerned with "social purpose" and should focus on producing a good service at a low price. It is argued here that this reductionist view does not correspond to reality. People are not just consumers – they are citizens with strong and informed opinions – and although they don't have the power to overthrow a CEO by voting, as they do with their politicians in elections, they do influence companies by choosing how to spend their money and, more importantly, what to say about it afterwards. Data from Ipsos surveys of both the general population and experts support this view in three important ways;

1. Profit and purpose are not mutually exclusive – 8 out of 10 Brazilians surveyed see no contradiction between companies supporting social causes and making a profit, according to the Ipsos Global Trends 2023 study. For 91% of the members of Ipsos Reputation Council (a group of business leaders with expertise in corporate reputation) focusing on a company's social purpose does not distract management from financial results. In other words, profit and purpose are "two wheels of the same car".
2. For the Brazilian public, "achieving solid financial results" is not the only or most important factor in determining good corporate governance – in fact, "ending corporate corruption" and "demonstrating transparency in communications" are some of the most important attributes for respondents of the IGRM sustainability survey. In contrast, the focus on financial metrics is only one of the most important issues for 17% of Brazilians. The reputation experts go further: 81% of members of the Council say a poor ESG performance has consequences materials for companies. 
3. Finally, a growing proportion of citizens – 64%, up 10 points compared to 2013 – say they want to buy products from brands that act responsibly, even if it means spending more. This shows that our buying habits are not exclusively driven by the cost-benefit logic, in other words, "being competitive", as Friedman defends, is not just about offering the best product at the lowest price. It is also necessary to consider that people are increasingly making consumption decisions based on the issues that concern us as citizens. The 2023 Ipsos ESG Council report sums it up perfectly: "[...] this merging of socio-political issues with purchase behaviour has created a green economy where sustainability is a competitive advantage that can be a catalyst for growth".

The siren's song: danger on easy roads

We need to recognise that Friedman and his current followers have a point: the quest to emulate a brand purpose can distract companies. For brands seeking to capitalise on the ESG agenda, it may seem easy and tempting to improvise a rebrand, sponsor a social cause or two, and then flaunt these shares as a kind of certificate of "good ESG". In doing so, however, these companies are creating a façade, believing that they are up to date with their sustainability commitments and diverting attention away from actions that could have a real impact. The "magic formula" works until the first crisis hits, at which point executives will scramble to justify their unsuccessful foray into the ESG agenda; or worse, decide to abandon it altogether. The result? Inauthenticity.

Many brands use the language of social purpose without committing to real change. That's what nearly 6 out of 10 Brazilians think, according to the Global Trustworthiness Monitor 2023 survey. While being 'open and transparent' is the bigger trustworthiness driver for Brazilians, being seen as inauthentic is not good. Beyond the clear reputational problem for the company, there is an even greater danger: inauthenticity spreading from one economic sector to another one risks exacerbating the "sense of a broken system" and feeding the polarised climate. That is, repeated demonstrations of empty or watered-down commitments can undermine trust and citizens' confidence in companies that claim to support social causes. Going further, it can reinforce the narrative that the ESG model itself benefits elites who are disconnected from the real problems facing society and who care more about their individual bottom lines than the broader wellbeing of society.

Conclusion: A case of success

We are in an era where neutrality is impossible – sometimes what you say is more important than what you do. Brands need to do more than simply embrace the moral cause of the moment – it is also necessary to identify challenges and contingencies, and then mobilise in unison. Companies must respect complexity and the fact that every action – and inaction – affects consumer sentiment and other stakeholders. To do this effectively, it is essential to establish clear guidelines for the implementation of ESG in companies. These efforts cannot be superficial or purely reactive; instead, they must incorporate fundamental values, long-term strategies, and short-term commitments to make a significant impact. For example, if a brand wants to promote sustainability, this intention must be reflected in all its operations, from sourcing to marketing, without forgetting its internal responsibilities towards its employees and collaborators.

Table of content 

1. An introduction to Flair Brazil 2024: Nostalgia or perspectives
2. Inflation vs. porfolio: The brand vacuum
3. Brands and social purpose in a politically divided time
4. Digital extremism: How algorithms feed the politics polarisation
5. The importance of female representation in Brazil
6. The role of companies in taking responsibility and action
7. Conclusion