Corporate America's inequality test

The big picture: The public's concern about inequality is hardly new, but expectations for meaningful change are growing.

• I heard some of that anxiety during side conversations Sunday evening at Money20/20 in Las Vegas, centered on who is getting left behind as the economy goes agentic.

Driving the news: Over the weekend, Anthropic announced it intends to commit 5% of its equity to a new public benefit fund, with the potential to increase that stake as its valuation grows.

• Elon Musk responded by pledging to give one SpaceX share to every child in America next year.

• United Airlines CEO Scott Kirby told the New York Times that wealth inequality has become a danger to society and called for a national wealth tax.

So how should communicators respond? For one, don't treat this as just another item for your corporate social responsibility teams to handle.

• Alison Taylor, a professor of business and society at NYU Stern, sees elements of the "old sustainability or corporate responsibility playbook" in these announcements, particularly Musk's: Make a splashy public commitment and assume the backlash will subside.
• Instead, she said there's an opportunity for corporate affairs chiefs to play a "strategic, ethical positioning role" and ensure consistency between "what's in your sustainability report, what your CEO is saying, what your government relations team is doing, what your lawyers are doing."

Between the lines: We're in a very different, more skeptical environment now than we were 10 years ago, when inequality campaigners — myself included — would celebrate even a passing mention of wealth inequality in a leader's remarks.

• "People did take CEOs' word for this in 2018 to 2020, and I don't think they do anymore because we've all seen the reversal," Taylor says, pointing to how many companies backed off diversity commitments made after the Black Lives Matter protests.

Big promises, especially when companies benefit from the boom, will face scrutiny.

• "Pretending to give everyone a meaningful stake in their success could be seen as a cynical attempt to neutralize support for new laws, be it on data centers, worker surveillance or antitrust action," said Nabil Ahmed, senior director of economic justice at Oxfam America.
• "Ultimately, it's about dignity — and nobody wants to be reliant on a group of very rich people for their future," he said.

Zoom in: Jesse Derris, president of Orchestra, sees this moment as "qualitatively different" from other recent social movements. However, he cautioned against jumping in reflexively.

• "You can always correct an underreaction, but it's very hard to correct an overreaction," he said. "You want people to feel that a response is coming from a place of honesty and is real, as opposed to performative."
• His advice: Lead with empathy, stay true to your company's values and have "a structure and a rubric" for deciding when and how to act.

What to watch: Derris expects economic populism, affordability and AI to define the political and reputational environment for at least the next two years, with more of these debates shifting from Washington to state and local governments.

• "It feels like we've been in this for a long time," he said, "but I do feel like we're at the beginning of the cycle."

The bottom line: To navigate the inequality conversation, corporate affairs leaders will need the influence to shape business decisions and the judgment to keep their companies from making promises they can't deliver.