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There are various political trends impacting businesses in 2022. The political environment affects all companies as operations need to follow the law. Political changes can cause businesses to obtain extra risk or experience major loss. This political risk can incentivize bank bonus offers or cause lenders to pull back entirely. As a business owner, you should understand how government policies, local and federal rules and regulations could affect your organization. Here are the latest political trends impacting businesses in 2023.
Economic Policy Changes
First, economic policy changes are a top political trend impacting businesses in 2023. Different political parties enforce different policies to manage global economies. Taxes can be altered, causing businesses to either gain or lose funds meant for the marketplace. More so, economic policies could impact interest rates. As a result, rates for loans, including small business loans, can be influenced. For example, with an economy of increased taxes, consumers spend less within the market. Therefore, banks start offering limited and smaller business loans to those in need. Certainly, economic policy changes are a political trend impacting businesses in 2023.
Changes In Politician Funding
A second political trend affecting businesses are changes in politician funding. Over the past year, in coordination with Rhia Ventures, three proposals were submitted addressing the misalignment of values. In fact, these proposals earned a support level average of about 40%. Many shareholders came together and made a decisive vote. It demonstrated the belief that corporations should think twice about funding politicians without knowing their position on fundamental issues. For example, there is a shareholder proposal targeting The Home Depot. The proposals showcases the company’s almost $8 million contribution to politicians and organizations who have restricted abortion access since 2016. Of course, no matter your business beliefs, the trend of wanting change in politician funding is impacting businesses in 2023.
Capital Spending
Of course, the political trend of capital spending is impacting businesses. More than 55% of business owners reported capital outlays over the past 6 months. In fact, more than 25% of businesses are planning capital outlays for the new couple of months. As a result, owners have become less optimistic and productivity levels have decreased. Therefore, many businesses are starting to worry about their future business opportunities regarding conditions and operations. More so, equipment spending has increased among the larger firms. About 40% stated they bought new equipment, 25% had to get new vehicles and 19% improved or expanded their facilities. While most owners view this as a negative situation, some believe it will help owners stimulate longer term investment spending. Surely, capital spending is a political trend impacting companies in 2023.
Climate Change
Another political trend affecting businesses is climate change. Many stakeholders are pushing businesses to cut greenhouse gas emissions. In fact, the administration plans on cutting emissions by 50 to 52% by 2030. Additionally, the SEC has made plans to update the decade old climate disclosure guide. As a result, there will be an increased shift towards standardized disclosures for publicly traded businesses. More so, there is such slow progress on climate change. Therefore, stakeholders are trying to influence companies to collaborate and partner with organizations fighting climate change. Also, businesses are subjected to higher expectations of implement climate risk into energy-based operations. Certainly, climate change is a political trend impacting businesses in 2023.
Inequality And Wages
Finally, inequality and wages are political trends impacting businesses in 2023. Many activists are fighting for equal pay rates. As a result, it is projected that there will be many rules enforced similar to the SEC rules enacted in 2018. This rule required that all public companies disclose the CEO-to-employee pay ratio. Therefore, employees knew how much they were making in relation to their employers and executives. Additionally, some countries around the world are required to provide certifications of equal pay for women. More so, stakeholders are looking for businesses to provide women with increased reproductive health care, and other types of better healthcare management including reproductive health. In fact, women who can’t access reproductive care, such as abortions from their employer, are three times more likely to leave the workforce than those who can. Certainly, inequality and wages are popular political trends impacting businesses in 2023.
The Fed’s Policy Rates
Through the end of 2022, the federal reserve policies are impacting companies throughout the United States. The interest rate hikes have created a much tighter financial environment for businesses. This means, it will be tougher for companies to get approved for capital at higher amounts. Additionally, the cost of borrowing is much higher than just a few years ago. The rates impact business loan rates, bond rates, mortgage rates and stock prices. Business owners may not make as large investments into their companies without the additional capital. This could lead to overall growth decline throughout the economy. During 2023, the Fed’s policy rates could have a major impact on businesses until inflation has been brought under control.
There are several political trends impacting businesses in 2023. Economic policy changes can impact how businesses obtain loans and pay taxes. Changes in political funding are influencing business owners to support different politicians based on their fundamental beliefs. Of course, capital spending is causing businesses to lose momentum, reduce productivity and outlay their funds. Certainly, climate change has affected businesses in that businesses need to integrate business risk solutions, implement climate change disclosures and reduce greenhouse gas emissions. Finally, inequality and wages are impacting businesses as stakeholders are influencing companies to give women, those part of the LGBTQ+ and those of color the same wage as every other employee. These are the top political trends impacting businesses in 2023.
