By Brenna Curti, Research Assistant

On March 26th, 2015, Salesforce CEO Marc Benioff tweeted to his over 150,000 followers, “Today we are canceling all programs that require our customers/employees to travel to Indiana to face discrimination.”

Salesforce is one of the largest American cloud computing companies with annual revenue of over $4 billion.  Each year, Salesforce holds a major conference in Indianapolis that draws over 10,000 in crowds and over $8 million in spending to the city.

So, why is its CEO suddenly anti-Indiana?

Let’s rewind a few weeks: On March 20th, a bill titled the Restoration of Religious Freedom Act (RRFA) landed on Indiana Governor Mike Pence’s desk.  The bill, now a law, allows any person or corporation to cite religious beliefs as a defense when sued by a private party.  The intent of the bill is to give companies and business owners legal cover in the event they do not want to do business with same-sex couples.

Much like countries and multi-lateral governing bodies place economic sanctions on misbehaving nations, technology companies and other businesses have responded to this legislation by implementing their own kind of economic sanctions on the state of Indiana.

What happened is reflective of a new trend in American business and public opinion – the growing importance of social responsibility among corporations – and of a change in the relationship between business and politics. 

Not since the 1960s have we seen businesses so directly engage in major political issues, going well beyond traditional lobbying.  Businesses have learned that there is not only a role, but maybe even a demand for them in the political decision making process.

In this instance, it was outrage from businesses, not special interest groups, which made the difference.  Is this the new norm in American politics?  Is this how business will need to operate going forward?

Despite the economic downturn and the risk of their open stance backfiring financially, what Salesforce has done represents a new way in which businesses are engaging in political issues.  Salesforce has led the way, but companies like Apple, Walmart, Yelp, Angie’s List, Eli Lilly, Cummins, and Eskenazi Health have all stepped up to the plate on this issue as well.  These businesses have stronger standards than the government and are going beyond what the law dictates because it’s good PR, but also because it’s the right thing to do.

Tim Cook, the CEO for Apple, one of the most high-profile companies in the world, even went so far as to pen an op-ed for the Washington Post:  “These bills rationalize injustice by pretending to defend something many of us hold dear.  They go against the very principles our nation was founded on, and they have the potential to undo decades of progress toward greater equality…Our message, to people around the country and around the world, is this: Apple is open. Open to everyone, regardless of where they come from, what they look like, how they worship or who they love. Regardless of what the law might allow in Indiana or Arkansas, we will never tolerate discrimination.”

Jeremy Stoppelman, founder of fellow tech giant Yelp, published a blog post that did not sugar coat Yelp’s planned response to the legislation:  “It is unconscionable to imagine that Yelp would create, maintain, or expand a significant business presence in any state that encouraged discrimination.”

Corporations aren’t the only ones involved – even a major event host jumped into the fray.  Days before the N.C.A.A. was set to hold the men’s basketball Final Four in Indianapolis, the organization’s president Mark Emmert issued a statement saying that the RRFA “strikes at the core values of what higher education in America is all about…[the N.C.A.A.] will closely examine the implications of this bill and how it might affect future events as well as our work force.”  Following suit, a major gaming convention that draws over 60,000 people to the city each year declared it will move its conference elsewhere.

As the bill made its way through the state legislature, LGBT rights groups constantly hit it with major criticisms, but none had enough clout to make headway in thwarting or amending the bill.  While these organizations have changed the national dialogue on equality, their protests, rallies, persistent phone calls, sit-ins, and thousands of letters were not enough to move Governor Pence to action.

What was enough to move the needle were the millions of dollars of “economic sanctions” Indiana businesses committed to dropping if the bill was not amended.  CEOs across America stepped up to the plate to defend their employees’ rights (and protect their bottom lines) and threatened to effectively dismantle Indiana’s economy if they did not get the response they wanted.

Similarly, it wasn’t until the economic impact was clear that Governor Pence made the following statement at a news conference in Indianapolis: “I’ve come to the conclusion that it would be helpful to move legislation this week that makes it clear that this law does not give businesses the right to discriminate against anyone.” Governor Pence hasn’t asked for amendments to the law because he believes it’s the right thing to do morally; he’s done it to protect his state’s bottom line.

Today’s political climate presents more than an opportunity, it presents a demand for companies and businesses to assume responsibility to advocate on behalf of their employees, customers, and stakeholders; recognize the public’s appetite for corporate social responsibility; and realize the direct impact they can have on the policies that affect them, lobbying firms, PACs, and trade associations aside.