Last week I wrote about how social media AI is banning sustainable/ethical products offered for sale on line, preventing customers from seeing products they want. Today is a tale from the other side of the spectrum. You may recall that several weeks ago, retailer Tractor Supply Company (TSC) faced on-line criticism from customers and conservative organizations as being woke due to TSC’s DEI and carbon commitments. TSC is an 85-year old publicly-traded retailer with 2,200 locations, 50,000 employees and over $14B annual revenue. It calls itself “the largest rural lifestyle retailer in the U.S.” and ranks 291 on the Fortune 500.
Although these commitments weren’t new, the company’s activities during this year’s Pride Month caught the attention of a conservative social media influencer who called for boycotts of the company. The call to action resonated with enough customers that last Friday, TSC issued a shocking statement abandoning its DEI programs and carbon goals to reflect the values of the rural communities and customers the company serves. Specifically, TSC stated it will:
- No longer submit data to the Human Rights Campaign
- Refocus our Team Member Engagement Groups on mentoring, networking and supporting the business
- Further focus on rural America priorities including ag education, animal welfare, veteran causes and being a good neighbor and stop sponsoring nonbusiness activities like pride festivals and voting campaigns
- Eliminate DEI roles and retire our current DEI goals while still ensuring a respectful environment
- Withdraw our carbon emission goals and focus on our land and water conservation efforts
Regardless of your position on ESG issues, this is huge. It shows yet again the power of change (for better or worse, depending on your perspective) that social media can wield. This is a rapid, dramatic and explicit reversal in direction for any company. The initial reaction by investors? Most likely not what you think – as I write this Friday morning, the stock is up around $5/share over Thursday’s close, an approximate 2% increase.
What does this say about ESG, DEI and sustainability as key buying criteria for customers or investor values? Was this the right or wrong thing for the company to do? This is an example of how complex materiality is, knowing your primary audience, and perhaps a wake-up call about the criticality of business fundamentals (i.e., revenue generation) to operations and investors.
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Photo credit: Refrina – stock.adobe.com
