Are You Ready for The Wave?

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The Wave Is Here

As our CEO Jeff Berkowitz detailed in Campaigns & Elections today, while campaign operatives prepare to catch up on sleep after the election ends, corporate and issues advocacy professionals’ hard work is just beginning – charged with navigating their organizations through the new landscape shaped by the results. Following an election cycle driven by the twin tides of populism and progressivism, that task may prove even more difficult than in the past.

From aggressive congressional investigations to even more frequent executive action, companies will find themselves fighting a two front war in Washington. Those two fronts will extend across the country, as it is likely red states will get redder and blue state bluer after the election, sweeping into office newer, more ideological legislators from each party. Many of these legislators will find themselves in supermajorities and trifectas, both of which are expected to expand after the election. With one-party control growing in many states, these legislators — and an increasing array of down ballot statewide elected officials — will widen the already gaping policy chasm businesses have to straddle between red and blue states.

Fortunately, here at Delve we have a well-honed playbook that sets public affairs operations up for success in the face of such challenges. Here’s what you need to do to navigate what the post-election tides sweep into 2023 with an information advantage.

Your Post-Election Playbook Is Here

Understand Where Your Risk Exists: More fights are about to occur in more jurisdictions on a wider range of issues on which companies and industries will be expected to engage. Yet even the most well-resourced organizations cannot run a 50-state offense and defense. To focus time and resources on where the most important battles are likely to occur, survey the landscape for where meaningful wins can be achieved and where serious political and reputational blows are likely to come. This survey should identify and assess key factors that indicate the likelihood of opportunity or challenges on key issues and interests for your organization, such as ballot initiatives; current and past activity of legislators and regulators; the presence and activity level of national and local activists, competitors, and other stakeholders; past and current lobbying efforts and political activities; and much more. At Delve, we weigh a customized set of risk factors across each jurisdiction to develop a heat map of risk and opportunity that helps public affairs professionals and lobbying teams target with pinpoint precision where to concentrate their resources and engage in the right fights early.

Find The Stakeholders: Friends are best found before the fighting begins, so once you understand where there is risk and opportunity, it is time to assess which stakeholders are likely to (or certainly ought to) engage in the debate, and whether you can work with them, or have to overcome their opposition. The traditional lobbying in “smoke-filled rooms” is long gone, so successful public affairs efforts must consider a range of actors beyond the actual policymakers, such as community organizations, competing businesses, labor unions, academics, and public and private interest groups. Reading the tea leaves of their previous statements and positions, funding sources, any relevant affiliations, and interests illuminates where they may come down in the fight, and together, help create a “web” of stakeholders that informs your strategy to bolster defenses and advance your interests through a winning coalition.

Secure An Information Advantage: Having assessed the landscape and mapped out the stakeholders, it is time to dig deeper into who those policymakers and stakeholders are and what is important to know about them. Whether it means developing key facts proving the value of a policy or discovering false motives of the opposition, an information advantage is an essential part of a winning public affairs playbook. These insights can include funding sources, inferred strategies and observed tactics, coordination with other groups, who influences them, what their motivations are, and how credible they should be considered by others. With more stakeholders engaging in more debates, the field of play is wider than ever before, so sharp, usable information lets you shape the debate with government decision-makers, the press, and public.

Build a System to Avoid Surprises: Even after charting a course and launching a campaign, the foundation it is built on continues to shift. The advocacy landscape moves faster and with greater intensity along with heightened political and reputational risks. By the time critical information reaches the headlines, it is often too late. Going past noisy mass media and social media to decipher what your opponents and key stakeholders are likely to do next is critical to mitigating risks and seizing on opportunities. Analyzing a wide range of primary and secondary sources can indicate changes to the state of play, so build a robust program that analyzes and synthesizes social media, press coverage, legislative action, regulatory filings, meeting schedules, event outcomes, stakeholder newsletters, and a wide range of other sources. It’s not the aggregation of these pieces of information, but rather the analysis of how they fit together that can provide a timely and actionable view of the landscape that keeps you ahead of the curve.

Don’t Wait to Turn Your Playbook into Action

Companies and industries cannot wait for the election results on November 8th to prepare for the coming onslaught of scrutiny and pressure. Next year’s legislative sessions and executive actions will be shaped and influenced sooner than you think. Smart public affairs professionals can leverage this playbook to keep their organizations ahead of the curve before it’s too late. If you need help assessing these risks and identifying which stakeholders are likely to shape next year’s policy debate, feel free to contact us.

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The Phone and Pen Are Back

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Here’s What You Need to Know

When Congressional Republicans frustrated President Barack Obama’s agenda, he bluntly declared, “I’ve got a pen, and I’ve got a phone,” with which he pledged “to sign executive orders and take … administrative actions that move the ball forward.” With at least one chamber of Congress expected to shift to GOP hands, President Joe Biden will find himself with a similar predicament, and if his first year in office is any indication, he is not waiting to wield his phone and pen in ways that impact a wide range of businesses.

Biden has issued more than 100 executive orders since taking office – including more in his first year than any president since Gerald Ford – and that does not count numerous administrative actions taken by various federal agencies. Come January, with Republicans likely to gain control of the U.S. House and possibly the Senate, that number is all-but-assured to grow exponentially. Here’s what public affairs professionals need to know to anticipate how these actions could impact their interests.

How Biden May Put His Phone and Pen to Work

Declare A Climate Emergency. Even after passage of the Inflation Reduction Act, climate activists and members of Congress are pressuring Biden to issue an emergency declaration on climate change, which would allow the president to (1) halt crude oil exports, (2) limit oil and gas drilling in federal waters, and (3) direct agencies including the Federal Emergency Management Agency to boost renewable-energy sources.

Seize The Means of Energy Production. With gas prices rising, Biden has indicated he may invoke the Defense Production Act (DPA) in an effort to boost the U.S.’s oil-refining capacity, a hammer he has already wielded against the energy sector in other ways.

Extend The COVID Emergency. The COVID-19 Public Health Emergency (PHE) is set to expire on January 11, 2023, after the Administration extended it for the seventh time last week. With Congressional Republicans likely to scrutinize his pandemic response, particularly after Biden declared the pandemic “over,” and without another extension the PHE’s relaxation of many regulations could come to an end even as senior health officials seek additional funding to fight the virus.

Pressure States and Companies on The Culture Wars. Covid is not the only culture clash likely to see executive action. Under pressure from abortion rights activists, Biden could double down on commitments by his Task Force on Reproductive Healthcare Access, including the possibility he could declare a public health emergency on abortion access. Biden could also pressure states through Medicaid and other funding mechanisms to cover abortion access, leaving care providers, insurers, and employers caught between federal and state health officials. Biden may take similar action to ensure access to “gender-affirming care.

Forcing Social Impact on Financial Services Sector. More executives could see their compensation tied to how well their company is doing on environmental, social and governance (ESG) goals – with an emphasis on the environmental – if the Securities & Exchange Commission finalizes its Climate Disclosure Rule. Furthermore, the Department of Labor proposed a rule in October 2021 that could compel ERISA plan fiduciaries to incorporate more ESG investing, and in February issued a request for information seeking input from stakeholders about whether the agency should add climate-risk questions to Form 5500, the form plans are required to submit annually. Plan fiduciaries and other stakeholders may be impacted by the final rules and policy pronouncements that come from these actions.

“Ungigging” The Economy. Biden faces growing pressure from gig economy workers and labor unions to follow through on his 2020 campaign pledge to “Ensure workers in the ‘gig economy’ and beyond receive the legal benefits and protections they deserve.” That pledge could lead to executive action forcing companies like Uber, Lyft, and DoorDash to classify drivers as employees rather than independent contractors.

Return Of the Joint Employer Rule. Biden is also facing demands from unions and labor activists to broaden the legal test for determining when a company jointly employs franchise workers – something the Obama Administration attempted to do before courts stepped in. Biden’s National Labor Relations Board recently proposed a rule to broaden the joint employment relationship to include indirect and unexercised control over the terms and conditions of a job.

Increased Executive Actions Will Leave Businesses Fighting a Two-Front War in Washington

As we noted last month, a Republican takeover of at least one and possibly both chambers of Congress will bring new pressures and scrutiny to companies and industries that populists in the GOP view with increased skepticism. As Republicans launch investigations likely to hit a wide range of industries, President Biden will be counteracting Congressional intransigence with executive action, often leaving it to courts to sort out conflicting policy directions. Public affairs professionals cannot wait to prepare for this new landscape in which they will have to satisfy competing demands from each end of Pennsylvania Avenue. If you need help assessing these risks and which stakeholders are likely to influence them, feel free to contact us.

The Power of The Purse – And Pensions

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Here’s What You Need to Know

State financial officers – 36 of whom are independently elected – control more than $4.56 trillion in state-administered pension funds and $1.27 trillion in revenue collected by state treasuries. Now, they are increasingly recognizing those portfolios can be a political force that can greatly impact banks, asset managers, and firms that rely on financial markets.

That’s why, as Delve CEO Jeff Berkowitz last week wrote in American Banker, “In the November midterm elections, the twin tides of progressivism and populism will crash ashore, and financial institutions will need to look further down-ballot than ever before to assess the risks they face from incoming elected officials.”

While political risk analysis often looks at Congress or state legislatures, businesses need to be aware such risks extend beyond oversight and legislation. Traditionally, governors are the main state executives shaping policy debates, but other statewide officeholders responsible for specific government functions advocate for policy changes too. As they do, firms in and out of the financial sector will need to prepare for very real legal and financial consequences.

How Commerce Got Politicized

The multistate tobacco settlement in the late 1990s helped state attorneys general (AG) recognize the power they had to pressure disfavored industries or signal opposition to a president. Not surprisingly, over the past 10 years campaign spending on AG races has more than tripled, fueled by corporate funds flowing into national groups like the Republican Attorneys General Association and Democratic Attorneys General Association.

In recent years, state AGs have blended legal action with political headlines on a wide range of policy issues, from suing energy firms over climate change to seeking to overturn the Affordable Care Act to making it easier for local prosecutors to sue financial services firms to seeking lower drug prices and even curtailing EPA regulatory authority.

AGs are not alone though. The most recent statewide officials to enter the political arena are state treasurers.

Treasurers Join the Fray

Between state government expenditures and investments by more than 300 state-administered pension funds, state treasurers have considerable market power, not to mention their offices’ sway over market regulation. Now they are wielding this power in a wide range of industries and companies – often from competing partisan perspectives.

To Drill or Divest. Last year, 15 state treasurers launched a coalition opposing financial institution’s ESG commitments that could lead to defunding or divesting from fossil fuel-related project. This summer, two of those officials – Texas Comptroller Glenn Hegar and West Virginia Treasurer Riley Moore – announced the disqualification of a number of banks and asset managers under recently passed laws prohibiting their states from doing business with “financial institutions that are engaged in a boycott of energy companies.” Last month, a coalition of 14 Democratic treasurers responded, signing a letter objecting to “blacklisting financial firms that don’t agree with their political views.” However, that has not stopped California’s state treasurer is pushing her state’s teachers’ pension fund to divest from fossil fuels, which Maine’s treasurer began last year.

Stand With American Allies. 35 states have passed legislation restricting state public pension fund investments in or other state commerce with companies that endorse or comply with the anti-Israel Boycott, Divestment, and Sanctions (BDS) movement. This summer, Arizona Treasurer Kimberly Yee warned investment firm Morningstar its environmental, social and governance ratings subsidiary was violating her state’s anti-BDS law. Last September, Yee was the first of seven state financial officers from both political parties to divest pension funds from Unilever after its subsidiary Ben & Jerry’s announced it would no longer allow sales in Israeli settlements. As the Biden Administration’s pursuit of a renewed Iran nuclear deal roils Middle East security politics, expect growing awareness of how firms engage in the region.

Step Away from American Enemies. When Russia invaded Ukraine, the push for companies to divest did not just come from the private sector and the public. State treasurers moved to divest their pension funds from companies and funds that included Russian interests. If the U.S. and China continue at least selected decoupling, this trend could become very complicated for banks and asset managers.

Social Issues Carry Financial Consequences. In 2019, Maryland Comptroller Peter Franchot declared his state’s pensions would divest from any and all Alabama-based companies in reaction to that state’s strict abortion law. Now, as companies respond to the Dobbs decision by covering employee abortion travel costs, opposite pressure could come from red states. Similarly, at least four state treasurers — Connecticut, Rhode Island, Nevada, and Massachusetts — have divested or are seeking to divest from investment funds with firearms-related holdings. Expect such actions to expand as the culture wars increasingly play out in state capitals.

Look Before You Leap

The politicization of commerce puts business in a precarious position. States are becoming increasingly polarized in their political and social issue demands on companies, and that makes it more difficult for companies to take either side without facing consequences. Adding to the confusion, while the principles in question can seem straightforward — every vote should count, climate change is real, gun violence should be thwarted — behind these shared principles are often expectations from well-coordinated activists that firms will endorse divisive, partisan solutions.

With state treasurers becoming a growing political force, companies can now face real financial consequences if their business practices and public statements do not comport with the views and objectives of elected officials who hold sway over state finances and investment. To avoid the pitfalls, companies must understand the full range of policymakers and stakeholders before starting their corporate advocacy. They should also be mindful of how they engage in policy and cultural debates, because just as in physics, every political action has an (un)equal and opposite reaction.

Mind the Gap

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Here’s What You Need to Know

Nearly 6 in 10 Biden voters and nearly 8 in 10 Trump voters agree that like-minded states (blue and red respectively) ought to secede and form their own separate country. Perhaps no other statistic better underscores “the great divergence” now under way, as red states get redder and blue states get bluer in this November’s election. This domination by one party in state governments mean fewer checks on partisan excesses and strains the country’s ability to form consensus where it can and compromise where it cannot, complicating a broadening range of issues for business.

With fewer representatives in government from the political center, companies will have to navigate a gap in policy direction between red states and blue states that on a growing set of issues has become diametrical opposition. Moderate Democrats who held back the excesses of progressivism and the free market mantra of Republicans that similarly curtailed populist impulses have both ebbed in recent election cycles, and the expectations for November suggest they will continue to fade. Here is what firms need to know as they prepare to navigate this widening divergence between the states.

The Midterms Will Make Red States Redder and Blue States Bluer

When state legislatures are sworn in next year, majority parties are likely to grow even more dominant in more than two-thirds of state legislative chambers. Currently, 24 states have legislatures featuring a “supermajority” by one party and that number is likely to grow after this November. Furthermore, 37 state governments today feature a “trifecta” – where one party controls the governor’s office and both chambers of the state legislature. Only thirteen states have a government divided between the two parties. The gap between trifecta and divided state governments may expand after November too.

While social and cultural clashes might seem like the obvious place businesses will get pulled between red and blue states, the pressures will not stop there. Companies can expect competing demands on a range of business and economic issues from both sides of the chasm:

As this gap in policy direction between red states and blue states expands, stakeholders and policymakers on both sides will crank up the heat on firms to take a stand even as they remain divided over what that stand should be. On a growing range of issues, companies will face immense pressure to conform and accept either the red or blue state version of reality.

In 2023, One in Four State Legislators Will Be New – And More Partisan – Including Key Chamber Leaders

Complicating businesses’ ability to navigate state legislatures and address competing pressures from diverging states will be the number of new members populating those chambers, many of whom will be more ideological than their predecessors. One in four state legislators sworn in next year will be freshmen, thanks to the highest level of open seats in five election cycles. This shift means businesses will start out the year with a bigger-than-usual task of acquainting themselves and building relationships with new policymakers who may be less familiar with issues impacting various industries and firms than their more seasoned predecessors.

Among these open seats are legislative leaders such as Arizona House Speaker Rusty Bowers, Rhode Island Senate Majority Leader Michael McCaffrey, and Wisconsin Assembly Majority Leader Jim Steineke. While the latter two decided to retire rather than seek re-election in the face of primary challenges, Bowers was one of numerous Republican incumbents to lose in primaries this cycle. Thus far, Republican incumbents have been losing state legislative seats at over twice the rate of the past two election cycles, generally to more populist challengers. While not to as dramatic an extent, Democratic incumbents are losing to more progressive challengers this cycle as well. More ideological state legislators mean fewer representatives focused on economic growth and business-friendly reforms rather than the latest front in the culture war.

These Dynamics Leave Businesses Caught in A Chasm with Fewer Allies

This increasing divergence between the states places businesses in a precarious position as they face mounting pressure from stakeholders on both sides of America’s cultural and political chasm. When businesses do take a stand — or no stand — they are bound to alienate a swath of policymakers and other stakeholders on various sides on the issue. Firms must understand that while they may have earned and maintained a great deal of trust, it will take a lot to ensure that trust withstands the growing wave of politicization.

As competing pressures from newer, more partisan faces in state legislatures arise, businesses will have to adjust how they approach their advocacy. They cannot wait for the election results to begin assessing risks and challenges or understanding what range of stakeholders and policymakers will shape those outcomes.

The Hill Op-Ed: There’s A Wave Coming, But It’s Not the One You Think

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In his latest column for The Hill, Delve CEO Jeff Berkowitz explains that businesses have much more at stake this fall than which party controls Congress. From investigations into the Biden Administration that may drag firms into them, to pragmatic lawmakers disappearing as the parties become more dominated by less experienced and more ideological officeholders, to a widening gap in policy direction between states, a rising tide of politicization of commerce is presenting firms with many challenges. To see what firms need to know as they seek to navigate and overcome them, read the excerpt below, then head to TheHill.com to read the full article. 

Most in Washington are debating whether there will be a red wave this November and, if so, how large it might be. Yet, whether it turns out to be a wave or a ripple for Republicans, the twin tides of progressivism and populism are bringing a much larger wave that will crash down on businesses.

From The White House to statehouses, skepticism, scrutiny and pressure will rise as a new wave of politicians from both parties is elected in November for whom criticizing business has proven to be a resonant line of attack on the campaign trail and in office. This means businesses have more at stake this fall than just which party controls Congress and state legislatures.

The Lesson of 2018

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Here’s What You Need To Know

“There is a massive backlash coming. You will rue the day when it hits you. That day is November 8, 2022.” This declaration, made by Senator Rick Scott (R-FL) to “woke Corporate America,” is one of many warning signs that the expected Republican takeover of at least the House of Representatives and possibly the Senate will not provide relief for companies and industries from excessive regulation and taxation.

Instead, as our CEO Jeff Berkowitz noted in The Hill this morning, Republicans are likely to follow what Democrats did after the 2018 midterm election and exert full oversight authority over an Executive Branch held by the opposing party. As they did in January 2019, companies and industries will find themselves caught in the crosshairs. That’s because everything from the post-2008 financial crisis bailouts to more recent engagement by companies on social issues and environmental, sustainability, and governance (ESG) initiatives has “led an increasing number of conservatives to question whether or not the interests of Corporate America aligned with their own.”

Public affairs professionals cannot wait to prepare their organizations for this whirlwind of investigations. Here’s what you need to know to prepare for the scrutiny that lies ahead.

As GOP Digs Into Biden, Many Industries Will Be Caught in the Web of Investigations

Many Republican members, including those who will likely be chairs of key committees or oversight subcommittees, have publicly pledged to put the Biden Administration under a microscope should the GOP win back control in the midterms. These investigations will hit a range of companies and industries even as they aim at the President.

Healthcare. As we noted earlier this summer, “a wide range of industry participants – from manufacturers to hospital systems to care providers and others,” stepped up to support the government’s response to COVID-19. Now, as Republicans make plans to investigate the Biden Administration’s handling of that response, these firms will undoubtedly be pulled into the inquiries. We have already seen media and government watchdogs dig into how the flood of government funds was allocated and to whom. A Congressional GOP inquiry could add considerable fuel to that fire.

Energy. With the Biden Administration allocating billions of dollars toward green energy projects, Republicans on the House Energy and Commerce Committee will investigate deep into how these dollars are being invested and whether the Biden Administration is creating more climate boondoggles for donors and allies (remember Solyndra?). Banks and asset managers will also face questions about their compliance with the Administration’s pressure to reduce financing for fossil fuels projects, as well as the Securities and Exchange Commission’s efforts to force climate-related disclosures on companies.

Finance. Republican members of Congress – who have already shown skepticism of the practice of ESG investing – are certain to investigate the Biden Administration’s encouragement of and pressure on financial services firms over ESG commitments and social impact investing, with sharp questions for financial institutions Republicans view as cooperating with the Administration. Scrutiny on social impact commitments will stretch beyond finance to other corporations the GOP views as co-opted by the “woke” agenda.

Automaking. Between California’s plans to phase out gas-powered vehicles and Biden’s unilateral executive decisions mandating more electric vehicle (EV) production, the push to grow EV market share by government fiat is already prompting investigations by House Republicans. The recent passage of EV incentives in the Inflation Reduction Act (IRA) is likely to add fuel to that fire. As our energy team noted, the IRA brings to the forefront China’s control over the global supply of critical minerals and metals necessary for EVs. Automakers are moving to address this supply chain issue, but not fast enough to avoid lawmaker questions about post-IRA price hikes and layoffs.

China. Speaking of China, House Republican Leader Kevin McCarthy (R-CA) has already announced a Republican majority will create a bipartisan committee to put our trade relations under a microscope and identify ways to increase our competitive edge with China on manufacturing and supplying critical minerals and minerals, pharmaceutical ingredients, and more. Firms with significant investments in China, or who Republicans believe should be ensuring our national interests over China’s, may find themselves caught in the middle.

Big Tech. McCarthy and Representatives Jim Jordan (R-OH) and James Comer (R-KY) declared a GOP majority will investigate tech companies over alleged censoring of an article in the New York Post detailing emails sent from the laptop of President Biden’s son, Hunter Biden, likely as part of or alongside a more comprehensive investigation of alleged tech censorship and anti-competitive excesses.

Pharmaceuticals. As the Administration moves forward with Medicare drug price negotiations and other measures to rein in prescription costs, Republicans could be either a friend or a foe to the pharmaceutical industry even as some members plan their own efforts to pressure the industry. The sector’s reliance on China for active pharmaceutical ingredients is also likely to draw questions.

Fintech. The Consumer Financial Protection Bureau’s aggressive approach at regulating the growing fintech sector, including “Buy Now, Pay Later” and cryptocurrency, has raised the ire of Republicans, and fintech firms could find themselves caught between their would-be regulators and Congressional demands.

Student Loans. Republican threats to probe Biden’s recent executive action on student loan forgiveness for ethics violations may also prompt hearings on how what are essentially taxpayer dollars contribute to the rising cost of attendance in higher education and whether colleges and universities are spending those dollars judiciously.

You Have 118 Days To Prepare Your Testimony

Representative Jamie Comer (R-KY), who is expected to lead the House Oversight Committee if Republicans take the majority, is already laying the groundwork to roll up his sleeves when the new Congress convenes in January. While many of these investigations could originate in his committee, nearly all House and Senate committees have oversight subcommittees that will also conduct investigations into their areas of jurisdiction.

It is likely that in 118 days, the new Congress will be sworn in with Republicans in control of at least one chamber. Companies and industries cannot wait for the election results to prepare for this onslaught of scrutiny. Smart public affairs professionals are already working to ensure their organizations get a fair hearing when it comes.

Trustbusting the Midterms

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Here’s What You Need To Know

“Bring down the price … And do it now,” President Biden tweeted earlier this month, directing “companies running gas stations” to sell gasoline at cost. The demand defied logic (the majority of gas stations are independently-owned and have very low profit margins), but it did highlight how frustrated presidents can become over their limited ability to address economic headwinds hindering their party’s electoral prospects. If we have reached this level of rhetoric in early July, just imagine how heated things will get after Labor Day.

It is not just the price of gas drawing ire from elected officials feeling the heat from voters. Progressives and even more establishment Democrats are increasingly blaming corporations, from grocery stores to car companies and beyond for rampant inflation. As Congresswoman Alexandria Ocasio-Cortez (D-NY) told Yahoo! Finance, “A lot of these price increases are potentially due to just straight price gouging by corporations,” which the publication noted, “echoes comments in recent weeks from Sen. Sherrod Brown (D-OH), Sen. Elizabeth Warren (D-MA), and the White House.” Progressive voices, such as The Nation, have cheered on such claims, warning, “A failure to be blunt about profiteering leaves a void that will ill serve their party in 2022.”

While it ignores economic reality, left unchecked this rhetoric – and the accompanying policy responses – could cause lasting damage to companies and industries already struggling to hire workers, navigate supply chain disruptions, and prepare for a potential recession. Public affairs professionals cannot wait for the results of the midterms to stave off the lasting reputational and policy impacts. Here’s what you need to know to take action now.

Profiteering Claims Aren’t Just Rhetoric – They’re Driving Policy Action

Blaming business for economic woes isn’t limited to rhetorical gestures—it’s manifesting itself in an agenda that is being pushed by the President, his appointees, and members of his party in Congress.

Anti-Trust Laws: Last year, President Biden was already laying the groundwork for Democrats’ midterm arguments, directing federal agencies to take investigative action to rein-in corporations, urging direct government intervention in a wide array of industries ranging from meat and poultry to oil production and announcing 72 new antitrust initiatives targeting a dozen industries. Many of these initiatives are being led by financial regulators who have a record of hostility towards the private sector that The White House nominated.

Presidential Appointments: The seeds of the current regulatory environment were sown with appointments made by Biden upon becoming President, including: Lina Khan, Chair of the Federal Trade Commission; Rohit Chopra, Director of the Consumer Financial Protection Bureau; and Jonathan Kanter, Assistant Attorney General of the Department of Justice’s Antitrust Division. All three have pursued a more aggressive approach to regulating firms.

Wage and Price Controls: In charging that companies are price-gouging, some Democrats are considering price controls as a remedy. In May, the House passed a bill banning “excessive” gasoline prices. Senator Bernie Sanders (I-VT) and five Democratic members of Congress have introduced legislation that would impose tax rate increases on companies with CEO to median worker ratios above 50 to 1, while some have called for implementing a maximum wage.

Ending Stock Buybacks: In April, Senate Democratic Leader Chuck Schumer (D-NY) and leaders of the House Oversight and Reform Committee demanded executives of major oil and gas companies stop stock buybacks and dividends to provide relief at the pump. Of course, suspending buybacks and especially dividends could make it even harder for oil companies to attract the capital required to fund expensive drilling programs that generate more oil. Beyond the energy sector, there had previously been a push among some Democrats to ban stock buybacks entirely.

What’s Really To Blame for Economic Woes?

As we wrote in May, in addition to Russia’s invasion of Ukraine, growing demand post-pandemic and difficulties faced by oil producers in ramping up output have been contributing to an upsurge in gas prices. Beyond the pinch at the pump, there are several factors driving inflation:

  • Monetary Policy. The pandemic spurred unprecedented levels of stimulus spending, introducing trillions of dollars of cash into the American economy that would not be circulating under normal circumstances.
  • New Spending Habits. After receiving stimulus payments and accumulating cash savings during the pandemic, American consumers now have greater purchasing power that is accelerating consumer spending.
  • Supply Chain Issues. Even as Americans want to buy more products, they are unable to do so because the supply chain can’t produce and deliver enough of them. Producers must contend with skyrocketing prices for materials, labor, fuel costs, and shipping, ultimately weighing production costs with guesses on future consumer demand.
  • Shrunken Workforce. America’s labor market is still recovering from the pandemic. Meanwhile, the federal government continues to extend eligibility for social safety net programs like Medicaid, food stamps, and unemployment insurance, which some scholars argue deters workforce reentry.

Despite Democratic focus on corporate profits, many economists, including those aligned with past and current Democratic administrations, say the price-gouging and antitrust zeal fails to understand the true nature of the inflationary spike, which they say are more a product of market forces and government policies than corporate greed.

As the Midterm Rhetoric Heats Up, Public Affairs Professionals Must Be Ready

Faced with unhappy constituents frustrated with the party in power, Democrats in Congress and the Biden Administration hope to refocus the conversation on “Big Business” profiteering, and no industry or company will be safe from scrutiny. That means public affairs professionals must be armed with the facts necessary to make their case to the public and policymakers about the current economic reality. Otherwise, damaging ideas based on false premises can gain traction and set the terms of debate for future policy proposals. The right competitive intelligence can equip public affairs professionals with the tools they need to anticipate and address such challenges with calm and confidence.

Forbes Column: Do You Know How Government Is Impacting Your Business?

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In his latest Forbes column, Delve CEO Jeff Berkowitz outlines how an ever-changing legislative and regulatory landscape can have a significant impact on your business. To learn the key actions that keep you ahead of change, read the except below, then head to Forbes.com to read the full article.

From mom-and-pop shops on Main Street to Fortune 500 companies trading on Wall Street, the last two years of the pandemic have made clear just how much government action (or inaction) can determine whether and how businesses can operate and grow. That reality was made clear by the frequent changes to Covid-related rules by officials at every level of government, from The White House and U.S. Supreme Court to governors and even city councils. This volatility forced businesses to constantly adapt to ever-changing guidance and regulations, from shutdowns to vaccine mandates to masking ordinances and beyond. Even as we move beyond the pandemic, businesses must remain cognizant of just how much influence elected (and unelected) officials have on their business operations.

Such government involvement is not new or unique to the pandemic. In some places, its intervention is obvious, such as permitting processes under the National Environmental Policy Act or labor rule disputes at the National Labor Relations Board (NLRB). In recent years, however, governmental scrutiny has compounded, and businesses must increasingly consider the role that lawmakers and regulators have on less obvious day-to-day functions of their business, from pressuring corporations on their boards’ demographic makeup to licensing rules that come with costly repercussions.

At every turn, the government is adopting policies that affect businesses, industries and sectors. Whether your organization is large or small or your industry niche or broad, you may have significant policy challenges that make operating your business more difficult, more time-consuming and costlier. That means you need to stay ahead of government actions, so you can help shape policy in a positive way.

Continue reading at Forbes.com and find out three key actions to help your business manage a growing and complex web of governmental influence.

The Roe Dilemma

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Here’s What You Need To Know

Amidst the uproar over the leaked U.S. Supreme Court draft opinion in Dobbs v. Jackson that could determine the fate of Roe v. Wade, companies face pressure from competing stakeholders to take a public stand. Whatever position they take—or even if they stay silent—is bound to alienate one or even both sides of this charged debate. Yet, news of the draft decision is just the latest social issue flashpoint in which companies are caught in the crosshairs, with questions, concerns, and demands coming from employees, consumers, investors, elected officials, and beyond.

Public affairs professionals know threading this needle will be difficult. As we’ve warned before, “Especially in this hyperpolarized political environment, it is important for CEOs and companies to remember that while they may believe they are signaling the right thing, they very well may be widening the divide instead of closing it.” Here’s what you need to know to navigate this ongoing challenge smartly…

The Demand To Take a Stand

The leaked draft caused a wave of activism demanding and expecting companies to act. Some companies, including Amazon, Apple, Citigroup, Levi Strauss & Co., Lyft, Salesforce, Uber, and Yelp, swiftly adopted new employee benefit packages covering the travel costs of employees seeking abortion procedures. The moves come in response to pressure from not just outside activists but also employees within companies. The pressure, though, is not one-sided. Congressional Republicans, for example, were already pursuing cancellation of Citigroup’s contract to provide payment services for House offices over the bank’s plans to cover abortion travel for workers.

Companies must also contend with the fact that younger consumers—an influential demographic sought by many companies—expect companies to speak out on important social issues, including abortion access. Those consumers claim to be more likely to patronize businesses that openly share their values. Investors are likewise seeking companies committed to social impact, including pledges on abortion rights and similar social issues. In February, a group of 36 investors managing $236 billion in holdings sent a letter to CEOs of more than thirty companies requesting they disclose their stances and employee benefits related to reproductive healthcare.

Every Action Has a Reaction

The desire to respond quickly to the leaked draft may be driven in part by corporate executives who just watched The Disney Company’s CEO forced by employees and activists to belatedly speak out regarding a Florida sex education measure. Yet, the second half of that all-too-true fable is just as important a lesson. In response to Disney’s opposition to the measure, the Florida legislature empowered Governor Ron DeSantis to revoke Disney’s special operating privileges in the Sunshine State. Similarly, when Delta spoke out against a Georgia election law, state House Republicans passed a bill stripping Delta of a jet fuel tax break.

As we noted after Texas passed a contentious abortion law last year, this “new reality means trying to get along with the leaders who enact policies that are good for business while placating the activists whose agitation isn’t, or finding ways to speak up for important values without blowback from elected officials.” Indeed, as we saw with Disney, such blowback is no longer just coming from politicians, but also from consumers who do not share the more vocal protestors’ views. After all, Americans remains split 50-50 on whether firms should address this issue.

This Isn’t Going to End Any Time Soon

Last week, the U.S. Department of Homeland Security circulated warnings to corporate leaders “flagging the potential for civil unrest” once a ruling in Dobbs becomes official. The potential for extreme rhetoric, violence, and destruction means companies will have to be careful in how they respond to the ruling, and if or how they associate with various advocacy groups that could be implicated—fairly or unfairly—to disruptions.

In the longer term, companies’ response to this anticipated decision are likely to be scrutinized to see if their practices match their proclamations. For example, how many companies will now cover employees’ travel for an abortion but not for critical cancer care or other complex health issues? The potential for such questions regarding companies’ real commitment to women’s health is a future viral moment waiting to happen. In addition, a decision dismantling Roe in whole or part will lead to a lengthy state-by-state battle, with Republican-led states emboldened to restrict abortion and Democratic-led states encouraged to protect and expand access. This widening legal divergence will undoubtedly foster tensions between companies and state governments. Even at the federal level, firms have to consider that Democrats’ current hold of the reins of power may end in November, and Republicans are already planning their investigations.

Abortion laws also are not the only social issue companies will face pressure to address. From voting laws and sex education to transgender rights and critical race theory in public schools to issues not yet ripe for politicization, stakeholders and policymakers will crank up the heat on firms to take a stand even as they remain divided over what that stand should be.

Conclusion

While the Dobbs leak provided little time for companies to react, public affairs professionals must anticipate the pressure campaigns to come. As crisis communication guru Richard Levick warned last week, “Taking sides on the most problematic issues of the day may not be advisable, but it may also be unavoidable.” At Delve, we recommend firms “take a cohesive approach that aligns their brand strategy and policy stances … assess[ing] risk from both a global and local perspective so that you can better understand and address key vulnerabilities—before they are pointed out in the public arena, and before you lose control of the narrative.”

Forbes Column: Are You Ready to Launch Your Brand’s Social Impact Initiative?

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Social impact is more than a buzz word. For growing numbers of organizations, it’s an operational principle. Yet the public remains skeptical that businesses mean what they say on such issues. In his latest Forbes column, Delve CEO Jeff Berkowitz outlines how organizations can make a real commitment to social impact without any surprises, and what a failure to fully consider such initiatives through can mean for an organization. Read the except below, or head to Forbes.com to read the full article.

With brands taking greater leadership roles in society, they’re now expected to engage on a wider range of issues, including those not directly related to their business. A variety of stakeholders will encourage an organization to lead with social impact as much as they do the products they make or the services they provide. Employees, investors, advisers, community activists, policymakers and even executives see how critical dedication to shared social values can be not only to a company’s corporate culture but also to its bottom line.

In a deeply divided nation, such corporate activism can present challenges to organizations once reticent to take public stands on contentious issues but now thrust into today’s political and social debates. As Axios reported, a recent survey warned about “the danger of speaking out impulsively on issues that aren’t core to the business.” According to Fox Business, the survey found that while 63% of corporate executives think “companies should speak out on social issues,” just 36% of voters agree. Even worse, only 39% of voters think corporate communications of social issues is effective.

Here are three practices executives must adopt to shape their organization’s social impact in a thoughtful and authentic way that minimizes risks and increases the likelihood their efforts will be well-received: (1) Know your history before you engage. (2) Don’t sign up for principles before you understand their implications. (3) Actions speak louder and longer than words.

Continue reading at Forbes.com and learn why these three practices are crucial to social impact success.