Rebranding of stereotypes: Is it fair?
The Black Lives Matter movement raging across the world after the gruesome killing of George Floyd in the USA has hit corporate India!
While Johnson & Johnson has announced that it is exiting the fairness category in India as the movement has grown in the past month, FMCG major Hindustan Unilever (HUL) has also decided to rebrand it 2000 cr controversial brand Fair & Lovely to a more acceptable name Glow & Lovely “to lead the celebration of a more diverse portrayal of beauty”. Many more brands are expected to follow suit to save grace as well as their stock prices!
Globally the movement has made many big brands change their discourse with calls to support more black-owned businesses.
JP Morgan CEO Jamie Dimon kneeled with the Black Lives Matter protestors, Jack Dorsey, chief executive of Twitter and Square, declared Juneteenth (June 19) a corporate holiday to commemorate the end of slavery, Reddit founder Alexis Ohanian, resigned from the board to make way for the first black director in the company’s history.
Bank of America & Goldman Sachs promised to spend $1 billion over the next four years to address racism. And these are just a very small subset of examples that show the sense of urgency among brands to adopt a more inclusive narrative.
We did not see protests against racism in India but the rebranding of skincare products came in as a bi-product of the global movement.
The underlying truth still remains that India, similar to Middle Eastern and African nations, has a huge market for “whitening” products, with the size of such products projected to be 5000 crores by 2023 and almost half of all skin care products in the country.
According to Indian Fairness Cream & Bleach Market View, the fairness industry is projected to grow in leaps & bounds with a crazy obsession in Indian women for fair-toned skin, reinforced by racial stereotypes. Dusky ladies often subject to racial discrimination in their own country and there are many advertisements, TV serials, movies, and matrimonial sites in India which brazenly differentiate based on skin color.
The change in the narrative by the big brands to be more inclusive is definitely not a wrong move but is it fair that the corporates, who have till now made huge amounts of money via racially discriminative products, can quickly save face when they see trouble?
How does racism affect investments?
Diversity is an important part of the Environmental, Social & Corporate Governance or the ESG factor which refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business.
Research has proved that these criteria help to better determine the future financial performance of companies (return and risk) and this criterion is widely being adopted by global funds in choosing investments and corporates in changing their narratives.
Companies with better gender representation have outperformed their peers and with the generation of millennials being more concerned about issues like diversity, climate change & inclusivity, the company’s championing this cause will catch investor attention.
While India was unaffected by the Black Lives Matter campaign, strangely enough, the global markets also showed no sign of turmoil even when a large section of the population in the US & Europe protested against racism triggered by George Floyd’s killing on May 25th.
The sentiment is undoubtedly getting strong against the racist culture that adversely affects millions of lives and brands are proactively saving themselves the legal and/or sentiment-based trouble by rebranding.
As investors, it is our duty to support sustainable business practices that bring about societal change and see those good policies by corporations grow our investments while making the world a better place!
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