C APTAINS OF INDUSTRY and social-justice warriors are strange bedfellows. Yet many American companies have embraced leftist causes. In 2016 PayPal cancelled its expansion in North Carolina after the state began limiting transgender people’s choice of bathroom. When Donald Trump instituted a travel ban on people from Muslim countries, 164 firms signed legal briefs opposing it. And following a mass shooting in 2018 Delta, an airline, ended discounts for members of the National Rifle Association.

Sceptics of corporate social responsibility ( CSR ) say that such acts are mere marketing. Firms support reforms like laxer immigration laws out of their own financial interest; and supporting causes like gay rights costs them nothing. They still prefer conservative policies on their main concerns, often taxes and regulation.

Yet in a two-party system, firms cannot order a main dish of tax cuts with criminal-justice reform on the side. Democrats back social liberalism and tighter state control of corporations; Republicans espouse the opposite. Do supposedly socially tolerant companies donate more to leftists than to candidates on the business-friendly right?

To answer this question, we built a zero-to-ten “wokeness index” to measure the social progressivism of 278 firms. We give one point each for signing legal briefs in favour of gay marriage, or opposed to the Muslim ban or transgender bathroom restrictions. We grant another point for joining a group that seeks to end the gender pay gap and for having a workforce that gives at least 60% of personal donations to Democrats. The final five points are based on CSR scores from JUST Capital, a pressure group.

Armed with this index, as well as data on political donations from the Centre for Responsive Politics, a research group, we sought to measure whether woke firms practise what they preach. The results offer some support for each side of the debate.

On one hand, wokeness clearly sways political-action committees. Using a statistical model, we found that if you took a group of companies in the same industry—which all gave $100,000, and were based in states that voted similarly in the presidential election of 2016—those with ten wokeness points would have given $12,000 more to Democrats than those with zero. (Companies tend to donate more to the party that is more popular in their home states.)

This effect varied by industry. The wokest health-care companies (such as Cigna, an insurer) gave Democrats half of their donations, compared with just a third for the least woke (like Universal Health Services, a hospital manager). The gap was smaller in industries affected by environmental regulation, such as chemicals. The wokest of these firms gave about 30% of their money to Democrats, and the least woke 25%.

However, CSR sceptics will note that even the wokest companies give priority to profits. Firms in the top quarter of our index gave 58% of their money to Republicans. Liberals can denounce Alphabet, an advocate of gay marriage, for donating to politicians who oppose it. But if Google’s parent company were less woke, it might have given even more to Republicans. ■

Sources: Centre for Responsive Politics; JUST Capital; employersforpayequity.com; Federal Election Commission; SEC; The Economist