How companies can accelerate racial justice in business

Melisande Kingchatchaval Schifter, Project Lead, Diversity, Equity and Inclusion, World Economic Forum

Anti-racist activism has seen a rise worldwide since George Floyd’s murder by police officers on May 25, 2020. Black Lives Matter protests promoting the fundamental principles of social justice, equity, rights, and participation, have been held in over 60 countries, including Tokyo, Cape Town, Stockholm, Rio de Janeiro, and Tokyo.

Social unrest has also sparked debate about the responsibility and role of businesses as trustees of society in order to promote social progress. Racism manifests itself in the current social, political, and economic disenfranchisement for historically marginalized and underrepresented groups, such as the lack opportunities, higher socio-economic status and the racial inequality.

Between Floyd’s death in October and October, around one-third Fortune 1000 companies made a public statement or committed to racial equality. The private sector also pledged $66 billion to support racial justice initiatives .

Companies have had to deal with the gap between progress and intentions many times. Over the 62-year history of Fortune 500, there have been only 15 Black CEOs. Currently, 1% of Fortune 500 CEOs is Black. The Fortune 500 has no Black female CEOs and only three women of colour.

Too often, programs for companies adopt a general approach to diversity. They offer uniform policies and training. These strategies do not address the specific historical and social patterns of marginalization, exclusion and disadvantage that these programs are designed to address.

Organizations also struggle to create common indicators and strategies due to the diversity of national laws and regulations, as well as demographic compositions and societal norms around the globe.

A global alliance to increase effectiveness

The World Economic Forum has created a global coalition to address racism in business. It will focus on Black inclusion and addressing anti Blackness.

Partnership for Racial Justice in Business is designed to coordinate and operationalize commitments to eliminate racism in the workplace, and to set new global standards in racial equality in business. It provides businesses with a platform to advocate for inclusive policies.

The initiative brought together 48 multinational corporations representing over 5.5 million employees. It covers 13 industries and has headquarters on three continents. The member companies pledge to include racial justice and ethnic justice on the agenda of their boards, take at least one action, and create a long-term strategy for becoming an anti-racist organisation.

“This initiative is an important step towards increased accountability, transparency and intentional action for dealing with racial injustices with an acute awareness the global Black experience,” Lindsay-Rae McIntyre Chief Diversity Officer at Microsoft.

3 areas of impact

Companies must address racism at a systemic level in order to create racially inclusive workplaces. This includes everything from the social and structural mechanics of the organization to their role in the community and the economy as a whole.

The partnership has identified three areas of impact to drive business change:

Creating fair pathways to work

Companies must establish policies and programs to promote racial diversity at all levels of their organization, and create inclusive structures and cultures within the workplace. This involves a focus on leadership, retention, advancement, workplace culture, and leadership. To ensure lasting change, policies and programmes must be embedded in the system.

The Coca Cola Company was a founding member and began to collect data about employment decisions 20 years ago. This included compensation, performance evaluations, advancement and lay-offs. The company was able to identify any racial or ethnic differences by reviewing these processes. The company established diversity KPIs in corporate scorecards, and made sure that compensation was tied to diversity targets. This effort paid off and Black executives rose from 1.5% to 15% in 1998 to 15.5% in 2010. The company did not disclose diversity data by race and the Black executive share fell to 1.5% in 1998. “We didn’t keep our eyes on the North Star,” the company said, highlighting the importance of instituting lasting change .

Coca-Cola Company has re-focused their efforts to address critical areas such as representation, socio-economic investments, and employee education and accountability. They are committed to publicly reporting on ongoing progress.

Building inclusive products and services

Through the products and services that they offer, as well as the way they deal with customers, suppliers and distributors, businesses play a significant role in advancing racial equality.

BlackRock, a founding member of the partnership has also committed to focusing its investment and stewardship activities on racial equality and social justice. This includes increasing partnerships with minority-owned businesses, including brokers who are minority-owned, creating and launching investment products that focus on racial justice and encouraging diversity in the workforce.

Alex Liu, CEO of Kearney, states that “Fighting [racial injustice] requires more than personal dedication to change and a decisive shift between intent to act.” To drive progress for the next generation, business leaders must be genuinely engaged stewards in order to deliver fundamental outcomes such as belonging and workplace joy.

Engaging in advocacy and supporting their communities

Companies must take a greater responsibility for advancing racial justice, not only for the effect they have on employees’ lives but also for the wider communities in which their operations are located. This could mean investing more in groups that have inequitable access or capital, or advocating collectively for the necessary regulations and policy changes to ensure inclusion and advancement for under-represented professionals.

UPS, another founding member of the association, has pledged 1,000,000 volunteer hours for mentoring and education programs in Black communities.

Salesforce is one of the founding members who advocated for anti-hate crime legislation to be passed in Georgia, USA, to combat racism and discrimination.

This coalition, united around a single mission, is making an effort to collaborate across sectors and with the public as well as social sectors to accelerate racial equality in business.

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