How companies can accelerate racial justice in business

The killing of George Floyd at the hands of police officers on May 25, 2020, caused a surge in anti-racist activism across the world. From Tokyo to Cape Town to Stockholm to Rio de Janeiro, Black Lives Matter protests advocating the basic principles of social justice – equity, rights and participation – have taken place in more than 60 countries.

The social unrest has also ignited the debate about the role and responsibility of business as trustees of society to accelerate social progress. Racism is manifested in current social, economic and political disenfranchisement of historically marginalized and underrepresented ethnic groups such as the lack of opportunities, lower socio-economic status, higher unemployment and the racial wealth gap.

Between Floyd’s death and the end of October, about one-third of Fortune 1000 companies responded by making a public statement on or commitment to racial equity, and the private sector pledged a total of $66 billion towards racial justice initiatives.

Yet companies have been repeatedly reckoning with the gap between intentions and progress. There have only been 15 Black CEOs over the course of the 62 years of the Fortune 500’s existence, and currently, only 1% of Fortune 500 CEOs are Black. There are no Black female CEOs of the Fortune 500 and only three women of colour.

Too often, company programmes take a broad-brush approach to diversity and offer uniform policies and training. These strategies fail to address norms and practices that are rooted in specific historical and societal patterns of exclusion, marginalisation and disadvantage.

In addition, varying national laws and regulations, demographic compositions and societal norms across the world also mean organisations struggle to design common indicators and strategies.

To address these challenges and drive systemic and sustainable change towards racial justice, the World Economic Forum is creating a global coalition to tackle racism in business, with a starting point on Black inclusion and addressing anti-Blackness.

Partnering for Racial Justice in Business aims to operationalize and coordinate commitments to eradicate racism in the workplace and set new global standards for racial equity in business. It also provides a platform for businesses to collectively advocate for inclusive policy change.

At the time of launch, the initiative brings together 48 multinational companies representing more than 5.5 million employees, covering 13 industries, and with headquarters in three continents. Member companies commit to including racial and ethnic justice on their board’s agenda, taking at least one action and setting a long-term strategy to become an anti-racist organization.

To design racially just workplaces, companies must confront racism at a systemic level — addressing everything from the structural and social mechanics of their own organizations to the role they play in the communities in which they operate and the economy at large.

Accordingly, the partnership has set three impact areas to create change in business:

Creating equitable pathways to opportunities at work

Companies need to put in place policies and programmes for more racial and ethnic diversity across all levels of the organization and build inclusive structures and cultures in the workplace. This requires a focus on recruitment, retention and advancement, workplace culture and leadership. Programmes and policies need to be hardwired into the system to ensure long-lasting change.

For example, 20 years ago, The Coca Cola Company, a founding member of the coalition, started to collect and analyse data on employment decisions, such as recruitment, compensation, performance evaluation, progression and lay-offs. Reviewing these processes allowed the company to identify any racial and ethnic disparities. It put diversity KPIs on corporate scorecards and ensured compensation was linked to diversity targets. These efforts showed results and the share of Black employees in executive roles went up from 1.5% in 1998 to 15% in 2010. But when the company stopped disclosing diversity data by race, the share of Black executives went back down. “We didn’t keep our eye on the North Star,” says the company – highlighting the importance of instituting long-lasting change.

The Coca-Cola Company has re-focused its efforts to address critical areas of racial equity including representation, socio-economic investment, political giving, employee education and accountability and is committed to publicly reporting ongoing progress.

Building inclusive products, services and supply chains

Businesses play an influential role in advancing racial justice outside of their organizations through the products and services they offer and in the way they manage business relationships with suppliers, distributors and customers.

For example, BlackRock, another founding member of the partnership, has committed to focusing on racial equity and social justice in its investment and stewardship activities in three areas: increasing partnerships with minority businesses including minority-owned brokers, developing and launching investment products focused on racial equity and social justice, and promoting workforce and leadership diversity in the companies in which they invest.

Supporting their communities and engaging in public advocacy

Companies need to take wider responsibility to advance racial justice not just for the impact they have on their employees’ lives but also on the broader communities in which they operate. This can mean increasing investments in groups with inequitable access to markets, jobs and capital or collectively advocating for necessary policy changes and regulations for inclusion and advancement of under-represented professionals.

For example, UPS, another founding member, pledged 1 million UPS employee volunteer hours to support mentorship and educational programming in underserved Black communities.

And several founding members including Salesforce have advocated for the passage of anti-hate crime legislation in the state of Georgia, US, to protect against racism and discrimination.

United around one clear mission, this coalition is making a concerted effort to work across industries and with the public and social sectors to accelerate racial justice in business.