
30 Jan Targeting Corporate Social Activism
It goes without saying that the United States does not have a royal family. Nor do any of its individual states have royal families. All of that said, if the state of Minnesota did have a royal family, it would be the Daytons.
George Draper Dayton moved to Minnesota in 1883. In 1902, he bought Goodfellow & Company, reorganized it, and changed its name to Dayton Dry Goods, which soon became Dayton’s department store. Under his leadership and that of his two sons, Dayton’s grew to be one of Minnesota’s most important retail businesses. In 1956, the Dayton family built the first fully enclosed shopping mall in the country, Southdale Center, in Edina, a suburb of the Twin Cities.
George’s great-grandson, Mark Dayton, was a Democratic Senator representing the state of Minnesota from 2001-2007, and then he served two terms (20011-2019) as the state’s 40th governor. As a Senator, he proposed the creation of a “Department of Peace,” and as governor, he made the legalization of same-sex marriage his legislative priority. He was and is on his party’s left wing, in other words.
In 1960, George’s grandson (and Governor Mark’s uncle), Douglas, launched Target, which he envisioned as an “upscale” discount store, a “classier” competitor to Kmart. Two years later, Douglas became the first president of Target, which was then a subsidiary of Dayton’s and had then opened is first store. He served in that position for seven years, leaving to become a senior vice-president at the newly renamed parent company, Dayton Hudson Corporation. Over the next three decades, the original Dayton’s business would be largely subsumed by Target’s discount operations, and in 2000, the company was reorganized as Target Corporation. As of 2022, Target was the 36th largest corporation on the Fortune 500 (by revenues), was the seventh-largest retailer in the country, and had more than 1900 locations.
In large part because of the Dayton family’s influence – and Douglas Dayton’s influence most especially – Target Corporation (in all its various and sundry guises) has long prided itself on its philanthropic spirit and its social activism. When Douglas died in 2015, his St. Paul Pioneer Press obituary noted that he “helped others through activism with social justice, education, arts and nature-preservation groups….” Dayton was a longtime board member of the Urban League and the Nature Conservancy, two mainstream but notably left-leaning charitable organizations. Upon Dayton’s death, then Target CEO Gregg Steinhaffel declared that “Doug was instrumental in helping to guide the strategic direction of Dayton Hudson Corporation for many years and institutionalize the values that are at the heart of Target Corporation today.”
So…why do you care about any of this?
Well, I don’t know that you do, but you should, for at least two reasons.
First, Target is one of the best-known social activist corporations in the country. It made a huge deal about the death of George Floyd – which occurred in the company’s backyard, after all – and it has long been at the forefront of advocating for and celebrating LGBTQ rights. The brief history above demonstrates that none of this is new for Target. Social justice campaigning is not the byproduct of a particular CEO’s political predilections. It is not the result of pressure from a specific group of activist employees. It has not been imposed on the company by external pressure groups or activist investors. In short, Target’s social activism is both historical and organic. It is not the result of pressure from the top down, from the bottom up, or from the outside in, as most corporate social activism is. It is, in corporate America, both unique and potent.
Second, despite all of this and despite its recent history of pushing its LGBTQ activism far beyond what is typical, Target just caved and just agreed to halt much of its more controversial social activism:
Target, one of the most full-throated corporate supporters of Black and LGBTQ rights, changed its tune Friday.
Its stores once featured prominent displays of themed merchandise for Pride Month and Black History Month. And after the May 2020 murder of George Floyd a few miles from the company’s Minneapolis headquarters, the retailer committed to increase the representation of Black employees across the company and spend more than $2 billion with Black-owned businesses by 2025.
The retail giant said Friday it was ending those workforce and supplier diversity programs, after paring back its Black- and LGBT-themed merchandise in 2023.
Most importantly, among the concessions/promises it made, Target agreed to end its participation in the Human Rights Campaign’s Corporate Equality Index. This is, to put mildly, an significant surrender on the company’s part. Recall that Target’s social activism enraged many of its customers two years ago, when they deemed the company’s Pride Month displays and promotions excessive and overtly supportive of transgender ideology. Most experts believed then that the campaign was prompted by efforts by Target executives to maintain the company’s score on the CEI. While Target was criticized by the HRC for walking back some of the more blatant aspects of its displays, it nonetheless redeemed itself in the organization’s eyes the following year, once again earning a perfect score on the 2024 CEI scorecard. In short, Target has long been a forthright and reliable ally of the Human Rights Campaign.
Until now.
What Target’s abandonment of the HRC tells us is that the effort to compel corporations to abandon DEI and social activism continues to gain momentum. The “preference cascade” I have noted several times in these pages is real and continues to pick up steam. Those working to purge the non-business-related activity that (more or less) constitutes the “S” in ESG continue to notch victories and continue to push corporate executives to rethink their priorities.
Up until about six months ago, most of the pushback on ESG was focused exclusively on the “E” – that is to say, on environmental posturing that increased energy costs without achieving much tangible by way of results (even assuming those results would be pecuniarily worthwhile in the first place). Since last summer, the “S” has also been under assault, and now, with Target making concessions, those pushing back have won an important victory – perhaps its most important so far.
To put it bluntly: the anti-DEI activism isn’t going away and it has, indeed, become an integral part of the pushback against ESG.
Act, engage, and invest accordingly.