Last month I wrote Why Firms Choose to Offend Customers about how it is that companies like Disney, Budweiser and Target publicly take social issue positions so different from public opinion. While I had the basic outlines correct, I did not have all the details.
RealClearPolicy has some of the fine grained details. They involve the actions of the Human Rights Campaign and its Corporate Equality Index (CEI) which becomes a major component of the firm’s environmental, social and governance (ESG) score.
Americans have the right to know, for example, whether a high CEI rating can either directly or indirectly translate to a better ESG score. For major corporations, a high ESG score has very practical, concrete value in terms of accessing financing or even being able to do business with other companies. Can a high CEI score result in inclusion on certain coveted index funds? It’s also important to know whether a corporation’s score may translate into a lower interest rates on bank loans. The answers to these questions have the potential to factor into fiduciary requirements from participating banks and financial institutions.
The Human Rights Campaign is defined as “the nation’s largest LGBTQ+ organization."