Why responsible branding matters to shareholders

The Sustainable Shareholder

Why responsible branding matters to shareholders

Washington Redskins blanket image by sha in LA via Flickr

Sustainable shareholders filed the latest corporate resolution in the longstanding effort to remove racist and offensive names and images from corporate brands when, last month, investors in FedEx requested a comprehensive review and reporting of the impact of ending the business relationship with the Washington Redskins, which FedEx paid $200 million in 1999 to brand the team's stadium through 2026.

The shareholder resolution, filed at the company's annual shareholder meeting, followed a request by 10 members of Congress in May to change the football team's name, which they referred to as a "racial derogatory slur akin to the 'n-word.'" The Congressional members had reached out to team owner Dan Snyder, NFL Commissioner Roger Goodell and FedEx management.

The resolution failed after garnering less than 30 percent shareholder approval.

After years of a behind-the-scenes advocacy by Native American tribes and socially responsible investors -- including a 10-year legal battle that temporarily subsided with the 2009 Pro Football v. Harjo case the Supreme Court refused to hear -- the pressure on the team owner, and FedEx as named sponsor of its stadium, has ratcheted up a notch in recent months. Goodell and major sports television network columnists have indicated the issue should be examined. NBC commentator Bob Costas -- the voice of NBC's Olympics coverage -- and President Barack Obama recently publicly suggested that Snyder change the team name.

The pressure to change a team name is mounting not just on the Redskins, but other professional sports teams as well, including the Cleveland Indians, whose mascot is a caricature known as Chief Wahoo, and the Atlanta Braves, whose tomahawk logo combined with fans' derogatory karate chop and tribal rally chant are widely regarded as the most offensive fan behavior in professional sports.

Offensive imagery in corporate brand names is nothing new -- Aunt Jemima and Uncle Ben are well-known brands depicting African-American servant cooks, Eskimo Pie remains culturally insensitive, and Frito Bandito and Sambo are stereotypical characters older readers will remember. Given this longstanding brand history along with the tradition of certain sports teams, it is unusual that the mainstream media would take the offense over the Redskins seriously, especially as no popular native voices are decrying the offense (as is typically the case with other minorities).

Yet with the nation becoming more diverse every year, and with awareness of racism, sexism and other forms of discrimination in the public eye more than ever, tolerance for offensive behavior, language and imagery continues to diminish, and the Redskins are now at the eye of this cultural storm.

Native Americans have long been ignored in the realm of racism -- their voice severely underrepresented in Congress, national media and corporate America -- but something is shifting, and corporate brand managers should take note. We have the college football community to thank for some of the shift: Back in 2005 the NCAA issued new rules about offensive names and mascots. Even before then, Stanford's team name became the Cardinal, and St John's the Red Storm.

But the pro sports leagues always have resisted. Snyder says he'll never change the Washington Redskins' name. And while it isn't clear that anyone can force him to change it, the question remains whether his brand faces a serious problem. After all, people like tradition, even if they aren't aware that the tradition is racist or otherwise offensive. But will consumers stop "buying the brand" if the offense continues? It's not likely given the lack of competition in each individual sports market, but ongoing negative publicity does harm the brand of any company.

Stroh's found this out with its now defunct Crazy Horse malt liquor. Sambo's (which was like Denny's back in the 1960s and '70s) also went under. And while it remains to be seen if Cadbury Pascall will rebrand Eskimo Pie or Tootsie Roll will remove the bow-and-arrow-wielding Native American from its Tootsie Pop wrapper, sports franchises are the current target of advocacy because of their high level of visibility and the proliferation of merchandising.

It's true that no offense is intended by anyone in professional sports, and corporate brand managers often feel similarly. But tradition is not a legitimate excuse. Brands can change and face no undue financial hardship. College football has changed team names even before the 2005 mandate, and everything has been fine for the many schools affected, because loyalty to a team truly has nothing to do with the name or mascot.

Sustainable shareholders long have attempted to advocate for responsible brand imagery. Efforts over a decade ago with Tootsie Roll and the most recent approach to FedEx reflect a perpetual concern over the exploitation of indigenous peoples.

Sometimes the concern overflows into government as well. Five years ago, the socially responsible investment industry held its annual conference in Squaw Valley, Calif. "Squaw" once was a derogatory word for female genitalia or a woman of ill repute coined by American settlers in the West; how many of you knew that? While this name is iconic to sports fans given its Olympic history and ongoing reputation as an excellent ski resort destination, Native Americans are incensed by it. When sustainable investors brought the leaders of the town and the tribe together during the conference, the town leaders revealed that they had never before realized the name was offensive to the ancestral home of the local native community.

In recent years, the U.S. Board on Geographic Names and nine states renamed dozens of sites, including mountains, lakes, roads and schools, to remove "squaw" and other derogatory names and terms from such places. These names were replaced because the tradition of institutional racism is far more important than the tradition of a name. And while some may suggest this is a moral issue, business leaders would be wise to understand the potential reputational risk for a company engaged in offensive behavior, for it surely can have financial consequences.

Washington Redskins blanket image by sha in LA via Flickr