January 2024
The promise of a new year is always ripe with hope and expectations. 2024 is no exception, though it will bring some surprises and its fair share of challenges. At Jackson Spalding, we’re keeping an eye on five trends – tensions really – that could pose serious reputational threats to brands and should inform intentional reputation management. Warning: this will not be the lightest read, but it could be one of the most important if it helps protect your brand’s reputation.
The U.S. presidential election is just 11 months away. The political divide has never seemed wider and the roiling, contentious rhetoric from both sides will ramp up as November approaches.
Every issue now has a political component. For businesses, nowhere is that more evident than harsh criticism of what were once innocuous (if not positive) terms such as DE&I and ESG.
Both have become weaponized as part of the U.S. political cultural war, with Congress conducting a yearlong investigation into ESG practices (including recently subpoenaing the heads of investment firms) and political candidates being criticized for associating with “activist organizations.”
Many DE&I programs have been labeled “too woke,” with employees complaining businesses have gone too far following the peak of the social justice movement while others argue they haven’t gone far enough.
The upcoming year will be a political minefield for brands, where issues can escalate in minutes and misinformation and disinformation can quickly damage reputation and public perception.
If there was a big winner in 2023, it was the organized labor movement in the U.S. After decades of losing influence and membership (union membership is currently about half of what it was in the early 1980s), labor bounced back in a big way last year. There were more strikes, by more workers, than at any time since at least 1981. The result? Big contract wins for the Teamsters at UPS and the United Auto Workers (UAW) at Detroit’s “Big Three” automakers among others.
The Service Employees International Union (SEIU) in California forced a compromise with fast-food chains that will raise the minimum wage to $20 an hour starting in April. In late December, Starbucks – which has fought unionization for years – sent a letter to Workers United saying it wanted to resume negotiations in 2024.
Labor will look to build on this momentum in the year ahead, reasserting itself in national and state politics and looking for new ways to increase membership. UAW president Shawn Fain has already said he is looking to organize non-union workers at other auto manufacturers and, in what could have far-reaching effects, the mid-size suppliers that support the industry.
SEIU is reportedly looking to expand its quick-service restaurant success in California to other states such as Washington and Oregon and is targeting the one industry that might see the most union activity in the new year… healthcare.
The war between Israel and Hamas continues to dominate international news, with the constant threat of it widening into a broader regional conflict. The horrendous loss of life from terrorist attacks in Israel in October and the humanitarian tragedy unfolding in Gaza have entrenched supporters on both sides. Many companies are backing away from commenting on issues when they don’t have direct involvement, but the burgeoning Middle East crisis may put brands squarely in the middle with competing employees groups.
Israel-Hamas and the ongoing war between Ukraine and Russia overshadowed another geopolitical issue in 2023: the looming cold war between the U.S. and China. The International Monetary Fund stated late last year that growing tensions between the two superpowers could devastate the global economy, including massive impacts on the global supply chains.
A continued standoff with China could cripple supply chains similar to what happened during the COVID pandemic with corresponding economic effects world-wide.
The AI Hype exploded in 2023. Now it is a question of what the world does with artificial intelligence… and whether it can ethically manage it going forward.
The three big areas likely to see the most impact from AI are healthcare, supply chain management and edge computing. There is growing excitement in the healthcare industry about what AI could mean for diagnoses and developing treatment plans. For logistics, AI could improve the way goods are moved, inventoried and distributed. AI could also allow computations closer to where data is generated, which has significant implications for manufacturing, and improved real-time processing for smart devices and autonomous vehicles.
AI, though, is already generating a new set of challenges and concerns, from “news” stories from reporters who don’t exist, to surveillance and harvesting of personal information. The European Union became the first government entity to try and regulate AI by grouping its use into “risk” categories and limiting how EU member governments can collect, store and utilize personal information gleaned by AI.
It is likely that there will be a call for U.S. lawmakers to adopt similar restrictions, and there is growing pressure on businesses to spell out how they intend to use AI, especially in relation to employees, and voluntarily adopt ethics codes for its use.
Whether climate change is real is no longer the point. 2023 was the hottest year ever recorded, likely contributing to everything from Canadian wildfires that burned an area larger than the state of Florida, to flooding rains in Europe and Africa.
Some experts believe 2024 will be worse.
Weather extremes caused major infrastructure damage: buckled roadways, collapsed dams, forced airport closures, burst water pipes. There is growing concern that these extremes will now threaten food supplies through prolonged droughts affecting farming, rising water temperatures killing off aquatic species, and heavier than normal rainfall wiping out arable land and spreading deadly livestock diseases.
Climate challenges will trigger advances in the way food is produced (e.g., vertical farming), but potentially create other concerns including rising food prices and further depletion of clean water supplies.
Companies should expect greater scrutiny of their sustainability and business continuity plans given expected disruptions to supply chains and operations from extreme whether incidents.
In the new year, we’d love to help you plan for the worst and hope for (and help create) the best. Ask yourself:
We’re here to help with these or other critical questions.
