McESG?: Chicago HQ Exodus Shows a 'City in Crisis'

Even in the era of digital marketing and online home-page “takeovers” by brands with something to announce, it’s full-page ads in major newspapers where companies still turn when they want to make an important statement. They pat themselves on the back expensively in the Wall Street Journal about how they make things in America, take veiled shots at competitors — and, though also usually obliquely, make political observations.


Making a political statement was exactly what McDonald’s CEO Chris Kempczinski did in September when he authorized the fast-feeding icon to take out a full-page ad in the Chicago Tribune that seemed to offer nothing but support and encouragement to Chicago Mayor Lori Lightfoot.


“Chicago has always been first” for McDonald’s, the ad read, followed by fine print about the company’s significant new investments in a metro area that has been its home since Ray Kroc opened his first restaurant in suburban Des Plaines in 1955. “Our commitment to Chicago is only getting stronger,” the ad concluded. “We’re proud of our Chicago history and invested in Chicago’s future.”


What could be more read as sweetness and light?


But the Tribune advertisement only carried punch because of what had transpired shortly before it published. In a speech at the Economic Club of Chicago, an august gathering of local business leaders, Kempczinski called for change because of how the Windy City has become overrun by violent crime — and its business leaders, as well as citizens, seized by the fear of it.


Clarion Call


“There’s a general sense out there that our city is in crisis,” Kempczinski said. “The truth is, it’s more difficult today for me to convince [a McDonald’s executive] to relocate to Chicago from one of our other offices than it was just a few years ago. It’s more difficult for me to recruit a new employee to McDonald’s to join us in Chicago than it was in the past.”


After Lightfoot squawked, with her people saying a record 173 companies moved to or significantly expanded in Chicago in 2021, McDonald’s placed the makeup ad in the Tribune. But the horse was already out of the barn.


And in truth, Kempczinski’s honest critique of a once-great headquarters city was an overt act of ESG, which is what CEOs are supposed to commit these days — action on environmental, social and governance causes. It was a seriously considered, sober-minded warning to city leaders that they’d better get a handle on violent crime, or even long-time corporate pillars like McDonald’s might consider moving elsewhere.


What could be more socially responsible than for a CEO to try to help a city correct its biggest problem?


It’s just that Kempczinski’s critique wasn’t the kind of ESG progressive investors have in mind as they pressure America’s business leaders to twitch and contort every time the word “sustainability” or “diversity” is mentioned. ESG has become the flavor of the age, clothed in all sorts of responsible talk by CEOs about the future not just of their companies and industries but of, nay, the entire human race and even the planet.


Wrong Direction


In the meantime, more companies are voting with their feet about Chicago in the here and now, even as their own CEOs don’t necessarily openly cite violent crime as Kempczinski did. Caterpillar and Boeing moved their headquarters out of the city this year. Tyson plans to move its corporate employees out of Chicago to the company’s headquarters in Arkansas. And Ken Griffin, the billionaire owner of the Citadel hedge fund, loudly relocated his headquarters to Florida this year — after he did voice concerns about the city’s violence.


Of course, none of this is lost on Lightfoot nor on other business leaders in Chicago, as they react with new task forces and studies to try to figure out what to do and as they try to shed culpability by pointing to similarly rising tides of violent crime in many other American cities.


But there’s also a sense they’re not taking this issue seriously enough, as Chicago and Illinois unfortunately behave more like the clueless administrations of troubled state and local governments on the coasts than like the jewel of Flyover Country values and practicality we should expect.


“What Chicago has not lost is the unique business culture that believes in civic support,” Derek Douglas, the newly installed president of the Commercial Club of Chicago, and its first Black leader, told Crain’s Chicago Business.


Maybe. For now. But he shouldn’t bet his Big Mac on it.