Slaying the 'multiheaded beast' of woke business

American consumers have a message to any company that wants their business: Hold the politics.

Just ask conservative filmmaker Robby Starbuck. What started with a single post on X taking Tennessee-based Tractor Supply to task for its DEI policies has morphed into a growing national movement, sparking public outcry and prompting policy change from John Deere, Harley-Davidson, Jack Daniels, and Lowe's.

This enthusiasm harmonizes with a new study released by the nonprofit 1792 Exchange in conjunction with WestGroup Research and the Manuel H. Johnson Center for Political Economy.

The study finds that almost 80% of Americans feel that companies have gotten too political.

Affiliated with Troy University in Troy, Alabama, the Johnson Center seeks to oppose such ideological capture by training the next generation of business leaders in free-market principles.

Align recently spoke to Johnson Center executive director Allen Mendenhall about Starbuck's methods, the need to puncture the myth of corporate omnipotence, and why there's nothing "right-wing" about applying constitutional principles to company policy.

Prudent adaptation

ALIGN: Critics of Robby Starbuck claim he's motivated by a "right-wing agenda." But isn't he rather advocating for neutrality — a return to "business as usual"?

Allen Mendenhall: It strains credulity to label a faithful and thorough application of the 14th Amendment as a "right-wing" position. Yet this is precisely the narrative some progressive voices assign to corporations seeking to comply with the reasonable rulings in two landmark cases: Students for Fair Admissions v. Harvard and Students for Fair Admissions v. University of North Carolina.

These decisions, which are far from partisan, determined that race-based affirmative action programs in college admissions violate the Equal Protection Clause of the 14th Amendment. Ultimately, these rulings represent a recalibration of how constitutional principles are interpreted and applied within academic settings. When a corporation adjusts its practices in response to these decisions, it is not a political act but a prudent adaptation to evolving legal standards.

Similarly, Starbuck's position could be seen as advocating for a return to a more traditional corporate focus, emphasizing business fundamentals like customer satisfaction and shareholder value rather than pursuing a specific ideological agenda.

He is not seeking to eliminate existing legal protections but rather question the extent to which companies should actively engage in social causes beyond their primary business functions. That isn't "right-wing." If anything, Starbuck advocates for a more focused, less politicized approach to corporate governance and strategy.

ALIGN: What does it say about these policies that they can be so easily and quickly abandoned in the face of a little pressure? Has something changed to make this pressure more effective than it was before?

Allen Mendenhall: The boycott of Bud Light that followed its to decision to make Dylan Mulvaney a spokesperson was nothing short of a rupture in the ideological fabric. It exposed the truth that consumers possess powerful potential despite the fantasy of corporate omnipotence.

No matter how mighty the shareholders are or how aggressively marketers attempt to impose their controversial politics, this resistance was an important reminder: Consumers, when provoked, can reassert themselves and disrupt the narrative from within. No company wants to be the next Anheuser-Busch, the subject of social media mockery with plummeting sales.

Slaying the Hydra

ALIGN: The right often thinks of "wokeness" as a kind of centrally controlled monolith; in a recent article, you point out that it is more accurate to describe it as a "loose confederation." Why is this more dangerous — and why is it important that the right avoid a simplistic understanding of the forces pushing ESG on us?

Allen Mendenhall: The word I used in my original draft was "concatenation," but a great human, Mike Sabo, who edited the piece, judiciously removed it to improve readability. Yet it's the perfect word.

If ESG were Goliath, you could kill it with a slingshot and a stone. But it's plugged into networks of interlocking institutions across different countries. As I say in the piece, ESG is not a leviathan but rather a hydra — a multiheaded beast of disparate interests; a loose confederation of academic theorists, corporate opportunists, bankers, investors, lobbyists, non-governmental organizations, and misguided do-gooders all jockeying for position to appear as the most righteous.

ESG is dangerous partly because it involves a subtle form of control that shapes how institutions and individuals understand their societal roles and responsibilities. Its power does not derive from one centralized authority but from its capacity to spread and integrate itself into core institutions, government-driven investment vehicles, and the administrative state. But most people cannot even explain what it is.

ALIGN: Given that "wokeness" is a "hydra," is going after it company by company (as activists like Starbuck do) the most effective strategy? What other methods might we consider?

Allen Mendenhall: First, embrace truth and courage. I feared backlash when we launched our anti-woke business program for undergraduates at the Manuel H. Johnson Center. However, the nationwide support we received was overwhelming.

CEOs shared with me insights into the inner workings of ISS and Glass Lewis, while professors expressed interest in creating similar programs at their institutions.

Even when banking lobbyists threatened my job and career following my remarks at the Alabama statehouse, the support from across the country emboldened me. What initially felt like isolation soon became a realization that a powerful coalition stood with me.

This experience proved the necessity of boldness and honesty — qualities that anyone can embody, regardless of their position.

Facilitating meaningful change requires a comprehensive strategy on a larger scale that includes legal action, in-depth research, tactical boycotts, legislative efforts, and thorough education. It means exposing weak politicians beholden to the lobby core. We must also separate taxpayer funds from ESG-weighted portfolios.

We should think outside the box, exploring partnerships with peoples and communities worldwide who share more traditional values — perhaps even those we have historically not yet considered allies.

With declining birth rates and populations in Europe and countries more inclined toward leftist ideologies, we may see, over time, a natural decline of these potentially harmful ideas. This decline will result from the destructive nature of these ideologies and the dwindling number of their supporters.

Ultimately, strength in numbers, even among less influential groups, provides a foundation for effective resistance. This is a long-term vision that recognizes demographic changes and the evolution of ideologies over time.

Common ground

ALIGN: The need to bring back American manufacturing has become something of a bipartisan issue. Is there an effective way for ESG opponents to appeal to potential allies "across the aisle" while avoiding irresolvable ideological arguments?

Allen Mendenhall: Setting aside the manufacturing issue, there is potential for the left and right to find common ground on ESG. Leftist groups frequently protest against companies like BlackRock, but they get little attention from the legacy media.

For my students on the left, I recommend reading a few books: "Woke Capitalism" by Carl Rhodes, "Our Lives in Their Portfolios" by Brett Christophers, and "The Problem of Twelve" by John Coates.

Though I may not always agree with these authors, we share a common understanding of the underlying issues. It is frustrating to see uninformed journalists criticize the anti-ESG movement from what they perceive to be a leftist standpoint, especially when they lack a full understanding of the topic and are being manipulated by those who do understand.

Some leftists are prepared to abandon the traditional focus on class and poverty in favor of embracing the riches, status, and influence that come with fully committing to environmentalism and identity politics.

ALIGN: To what extent do you see local business as a solution? Can rampant ESG be a spur to entrepreneurship?

Allen Mendenhall: I will withdraw my deposits from Truist and bank with a local community bank that does not promote ESG and values at odds with mine. I hesitate to encourage people to withdraw deposits from Big Banking en masse because a run on the banks wouldn't help anyone.

But I don't think local for the sake of localism is necessarily helpful from an economic standpoint. The entrepreneurship approach is far better, and I suspect we will see exciting changes across investment and financial services. We are already seeing them.

Pushing back

ALIGN: What can our subscribers do to fight ESG?

Allen Mendenhall: People of varying financial means must approach the fight against ESG in different ways. Those who are just getting by can focus on purchasing products only from companies that align with their values or are at least politically neutral.

However, those with more financial resources can have a more significant influence in the investment arena. We need more corporations acquiring substantial shares of publicly traded companies to have a stronger voice in decisions on shareholder proposals during proxy season.

While I am generally cautious about turning to politics for solutions, we have seen significant progress from state treasurers and legislators who are becoming aware of the implications of ESG. They are starting to push back by divesting from asset management firms that prioritize ESG and ensuring that public funds are not wasted on investments that favor ideological values over financial returns.

It seems counterintuitive that fund managers or their clients would favor underperforming ESG investments and business strategies over more profitable options. However, a recent survey by the Hoover Institution reveals that young investors — who are often less financially secure than their parents were at the same age — are willing to sacrifice 11% to 15% of their savings to support ESG-driven initiatives related to social causes or the environment.

It will be interesting to observe how these younger investors' priorities evolve, just as the counterculture youth of 1968 became, for the most part, the Reagan-voting yuppies of the 1980s.

In contrast, Baby Boomers prefer a more traditional investment strategy, expressing a reluctance to incur financial losses with their retirement savings.

If young investors are truly passionate about issues like net-zero emissions or gender diversity, why not invest directly in charities or philanthropic efforts dedicated to those causes? Alternatively, why not aim to maximize their investment returns to have more resources to support their preferred political and social agendas?