As President Biden passes his first 100 days in office, companies are facing a flurry of legislative and regulatory activity in Washington—and trying to figure out how to navigate a series of challenges that are hitting the C-suite every day. The list of pressing issues both Washington and corporate America face is staggering: a lethal pandemic, an economy waiting to take off, rising tensions with China, vocal and ever-present calls for racial and social justice and climate action. The continued political tension across the U.S. means companies must remain aware of actions that could be perceived as too aligned to one political point of view and be prepared for backlash.
For companies closely watching what’s happening in Washington, the opportunities for engagement in the policy conversation will return, but the space will be crowded. Expectations and requirements for being a good corporate citizen are high, and companies with proven track records on issues that align with the Biden administration’s priorities—including racial and gender diversity, and climate action—will be well positioned for engagement and to achieve their policy priorities.
The analysis below covers some of the top policy and regulatory issues that emerged in the past 100 days with the new Biden administration—and some thoughts on how companies will be impacted in the days and months ahead.
As we’ve seen over the past three months, U.S.-China tensions remain and there is unlikely to be any shift from adversarial bilateral relations. This will require companies to walk a tightrope between competing stakeholders. President Biden’s China strategy is evolving and likely to focus on resuming both diplomatic channels and multilateral pressure.
Despite agreeing to work together on tackling climate change, the United States and China remain at odds on thorny issues like trade, national security and human rights, presenting an ongoing challenge for the business community. Companies will need to remain aware of potential pressure points from each government and continue to prioritize their local contributions and support on both sides.
President Biden’s aggressive environmental plan will hold corporations accountable for meeting emissions limits, requiring public companies to disclose climate risks and greenhouse gas emissions in their operations and supply chains. Depending on the level of opposition in Congress, Biden could pursue executive actions through the EPA to enforce stronger corporate emissions standards. The administration is likely be open to collaboration and buy-in from corporations on climate and sustainability policy, which should create potential opportunities for companies to position themselves as meeting the challenge to be more environmentally responsible.
However, any public engagement with the government will inevitably spotlight a company’s existing and future partnerships and commitments, which will come under greater scrutiny from environmentally focused NGOs and activists. Moreover, frequently updated ESG communications and climate impact disclosures will likely be mandatory for all publicly traded companies.
The Biden Administration surpassed initial vaccine targets and hit more than 200 million first-dose vaccinations by late April. President Biden also signed the $1.9 trillion American Rescue Plan Act in March, which provided $1,400 direct payments, $350 billion in aid to state and local governments and $14 billion for vaccine distribution. The American Rescue Plan Act also provided funding for a child allowance, support for small businesses and assistance for schools with a safe reopening. For companies, the COVID-19 recovery bill marked a significant immediate investment to bring the country one step closer to the full re-opening of business and schools.
President Biden has made a far more explicit commitment to a higher minimum wage, labor rights and collective bargaining than any recent Democratic president, and we can expect progressive groups to use White House’s support to ramp up organizing.
The House passed the Protecting the Right to Organize (PRO) Act, a bill supported by President Biden, which seeks to ease the path to unionization by putting in place new protections for workers seeking to unionize and establishing penalties for employers that diminish such efforts. The measure will likely run into opposition in the Senate, where 60 votes are needed to advance it past a filibuster. If passed, the PRO Act could have far-reaching implications on labor laws and make it easier for workers to form unions. Trade associations and pro-business groups are organizing significant opposition to the bill.
The push to increase the federal minimum wage to $15 was not included in the COVID-19 relief bill in March, with Democrats in disagreement over how much to increase it from the current rate of $7.25 per hour. Some Congressional Republicans have come out in support of a minimum wage increase but have opposed raising it to $15. A future increase in the federal minimum wage would impact at least 17 million workers and would likely be indexed to inflation—locking in a consistent rise in wages over the long term.
Social and Racial Justice
President Biden and his administration have made racial equity justice a defining pillar of their agenda in the wake of the murder of George Floyd and continued racial and social injustices across different aspects of American society. Biden signed executive actions directing agencies to redress racially discriminatory policies. His administration has also taken strong stances on criminal justice reform, calling for the passage of the George Floyd Justice in Policing Act to ensure accountability for law enforcement officers. The verdict of the Derek Chauvin case marked a significant milestone in the fight for equality and justice, and the Biden Administration is looking to build on this success by calling on Congress to pass extensive police reform before the anniversary of Floyd’s death in May.
The Biden Administration has also recognized that the pandemic has exacerbated current inequalities across race, gender and income level. In addition to the American Rescue Plan which helped families and small businesses struggling to pay bills, he has announced the American Families Plan, which proposes universal preschool for three- and four-year-olds, two years of free community college and additional direct support for low-income families. While the Biden Administration and Congress move towards concrete legislation, companies can demonstrate initiative on these issues by supporting their employee’s needs, as well as taking a stand publicly alongside their industry peers to either promote equality and justice, setting an example for the rest of society.
During his 2020 campaign, President Biden reassured the country that major tech companies would be held more accountable for their actions online and has bolstered this message through his appointments to key enforcing agencies, such as his FTC nomination of Lina Khan. Issues at the heart of the tech industry, such as content moderation under Section 230 (also known as the tech legal liability shield), and data privacy have been heightened in the aftermath of the January 6th incident on Capitol Hill as well as the spread of misinformation of COVID-19 vaccines. In Congress, the recently introduced SAFE TECH Act targets key areas of speech and implementing procedural guidelines for tech platforms. The intent of the reform has shifted from conservative bias to a wider lens of issues, such as children’s privacy, misinformation, and due process for consumers, and will parallel antitrust investigations over competition and accountability. Senator Amy Klobuchar (D-MN), the lead Democrat on the Judiciary Subcommittee on Antitrust, has drafted a bill introducing expansive antitrust enforcement reforms, which would bolster agency efforts to protect consumers and businesses alike
Discussions over Section 230 and antitrust reform will ultimately impact how companies manage their brand, including advertising of products and reaching target audiences. New rules could also impose procedural adjustments, such as transparency reports and updated terms of service. Federal agencies are exploring new methods of enforcement to break down barriers for smaller companies in the advertising and publishing spaces. Companies, regardless of industry, should proactively protect their customers’ data and well-being online, as well as ensure compliance with regulations as they emerge from the legislative and executive branches.
In the wake of the 2020 election, more than 250 bills have been introduced in at least 43 state legislatures aimed at tightening voting regulations, including a new law in Georgia that received significant attention and an outcry from several civil rights groups, corporate leaders and major corporations. President Biden and Congressional Democrats are pushing two national bills to expand voting rights: the For the People Act and the John Lewis Voting Rights Advancement Act. The For the People Act would expand early voting, lessen ID requirements, allow same-day registration and set up automatic registration for federal elections. The John Lewis Voting Rights Advancement Act would restore voting safeguards, including establishing a transparent process for states to report election law changes.
State-level legislation on voting will further increase demands and scrutiny on companies to take a position, particularly for those brands and corporations that have been vocal about racial equity, social justice, and voting. They will continue to feel pressure from their employees and customers to speak out on voting rights, such as in Georgia. Companies should continue to actively monitor new legislation in relevant states and districts to prepare for the public reaction.