In recent years, we’ve witnessed a growing phenomenon: business leaders speaking out on social, environmental, or political issues with high visibility (some examples include Larry Fink of BlackRock, Howard Schultz of Starbucks, and even the Portuguese António Horta-Osório of Lloyds Banking Group and Credit Suisse). On one hand, this trend may reflect a genuine commitment to ethical values and social responsibility; on the other hand, the risk of turning these statements into mere marketing strategies — known as woke washing — has never been more evident.
Whether we agree or not with the expression of such “opinions” by CEOs, what is their impact on company performance? Is it worthwhile for a CEO to engage with social, political, or environmental issues? Or does it harm the business? It depends…
Recent research published in the Strategic Management Journal shows that, in fact, markets are beginning to distinguish between companies that align their words with actions, and those whose activism is just a show (what the authors call woke washing in this case). When a CEO takes a stand on social or environmental issues and, more importantly, translates that position into strategic decisions, the trust of investors, customers, and employees increases. On the other hand, when the discourse is limited to symbolic gestures, the impact is negative: reputation suffers, customer loyalty declines, and even shareholder value can be affected. Investors, consumers, and employees now demand authenticity — it’s no longer enough to share well-meaning press releases on LinkedIn or other social media platforms, or to support media-driven campaigns. We can conclude, then, that markets reward consistency, and authentic leadership is emerging as a competitive advantage.
For Portuguese companies, this is a crucial lesson. Pressure is mounting to take a stand on topics like diversity, environmental issues, or human rights. However, instead of adopting opportunistic public statements, leadership teams need to integrate these causes into the organization’s strategy and governance. Otherwise, accusations of woke washing not only damage reputation but can also lead to significant financial losses. These losses will become even more concrete with the enforcement of the new Omnibus regulatory package, which requires companies to “report on” and “act on” these topics in a concrete way, under penalty of applicable fines.
True corporate activism is not made up of catchy phrases, likes, or viral campaigns — it is born out of authenticity and consistency between what a company says and what it does. When a CEO turns commitments into measurable actions, they create trust and competitive differentiation. And in today’s climate of public scrutiny, trust is one of the most valuable assets any business can have.
The irony is that the leaders least motivated solely by quarterly figures are often the ones who grow them the most. By placing purpose, people, and impact at the center, they build organizations that are more resilient, innovative, and competitive. And that combination is, today, the true formula for maximizing profits — in a sustainable and lasting way.
It’s time to rethink what it means to “lead” and to embrace the kind of authentic leadership that both the market and society expect and need (as I argue here). And perhaps it’s also time to accept that, in today’s business world, pursuing profit alone is the riskiest strategy of all.
Filipa Pires Almeida, Executive Director of Center for Responsible Business and Leadership at CATÓLICA-LISBON