LONDON — Social factors labelled “woke” by some detractors are driving reputation improvement for some companies, according to new data analysis from European business strategy, communications and political engagement firm Boldt.

However, companies should consider the potential consequences before committing to action in areas considered "woke", as this has no effect on sales. The new report, ‘Does a Woke Reputation Increase Business Value?’, points to a need for companies to hold their nerve and analyse the risks.

For companies, the term "woke" is increasingly used to describe their actions or positions related to social and political issues, especially those concerning diversity and inclusion – but such action has also drawn increasing levels of criticism over the past couple of years. In the US, for example, Republican candidate Ron De Santis has declared a ‘war on woke’, and Bud Light’s use of a transgender influencer earlier this year created a backlash and boycott of the brand.

The report, compiled by Boldt using ESG data and an analytical model from Mettle Capital, assesses the volume and sentiment of “woke-related” content driving trust – in this case, being a trusted business or brand that attracts sales – and reputation, or how the company is regarded by all stakeholder groups.

It found that there is no direct benefit to a company’s share price in seeking to be “woke”, and over the past 12 months, being woke has – for most companies in most sectors – had a greater impact on reputation (with regulators, policymakers and NGOs) than it did on trust (with consumers).

Sectoral analysis suggests that technology, consumer goods, and food and drink sectors saw reputations benefit the most from woke factors, while healthcare and transportation sectors benefited least.

Boldt partner Steve Earl said companies should consider the full range of factors, opportunities and risks when developing and communicating positions on social issues that could lead it to be considered “woke”.

Earl said: “Some companies have been prone to making knee-jerk statements and commitments on topics because it feels like the right thing to do, but they need to listen and think hard before doing so. We saw that overall, these social drivers can increase reputation but not sales, so firms should be clear whether what they’re doing is a group or brand-level undertaking.

“The decry of ‘go woke, go broke’, doesn’t seem to be accurate, but there is still much at risk so companies should tread carefully.”