Years ago, I decided to dedicate my professional career to creating a more just and equitable society. I chose to do this by focusing on the private sector, by helping companies to operate in ways that are more socially and environmentally responsible.
Much of that work has involved helping companies to operationalize abstract concepts into practical changes that can be made within their organizations. It’s great to have ideals – I’m an idealist at heart – but at the end of the day, it’s actions that make a difference.
If we want to be conscious capitalists who use business as a force for good, what exactly does that look like in practice? What does a mission-driven business that wants to help people and protect the environment do differently compared to one that is focused solely on profits?
These are the questions that I’ve been drawn to and that I have made the focus of my work. As I survey the landscape of where our society stands at this point in time, I still come back to them and ask myself, “What actions can individual companies take to address systemic racism?”
The suggestions below reflect specific practices that we as business owners can implement to change our organizations from within. If you’re not the business owner, you can still raise these issues within your company.
For all those companies and organizations that have issued statements denouncing systemic racism, I offer these as follow-up actions that can make a difference.
Using a Framework for Improvement
The best framework that I’ve found to help companies evaluate their impacts and make practical improvements is the B Impact Assessment (BIA). It presents best practices that can be implemented by sole proprietors up to multinational corporations to evaluate and improve their company’s operations.
This is a free tool that can be used by anyone, regardless of whether you want to get certified as a B Corp or not.
Among the many practices listed on the BIA are some that can help a company to take meaningful action to address systemic racism. They can be implemented by all companies, regardless of size, to begin to rectify the myriad problems that we face.
I believe that it’s just the right thing to do, but if you need more of an incentive, it’s worth noting that customers across political lines are asking brands to take a stand against racial injustice.
[A note about the BIA: the questions below are meant to be representative of key practices, but the actual point values for your company may vary due to employee count or industry. To get certified as a B Corp, you must reach a verified score of at least 80 points.]
Put Stakeholders First
Capitalism and racism grew up together in our country. We have inherited a system that prioritizes shareholder benefit and profits for a few, but not for all.
The entire approach that B Corps take upends this by prioritizing stakeholders, not shareholders.
B Corps challenge shareholder primacy and instead ask companies to consider all stakeholders impacted by a company, including customers, employees, suppliers, and community members.
By engaging stakeholders, companies can begin to understand their needs and concerns and work to make sure that the impact they’re having on those individuals is a positive one.
Like so much of the BIA, this abstract concept of putting stakeholders first is then operationalized into specific practices that a company can adopt. The options range from small but worthwhile steps to more impactful commitments (this is the common format within the BIA.)
In this case, a company can engage stakeholders in a range of ways, from having them represented on a non-fiduciary advisory board to publicly reporting on stakeholder engagement and results.
The BIA specifically mentions having mechanisms for reaching out to underrepresented groups, which can involve working with local community members and organizations. This step ensures that the company is not operating in a silo in which only one set of voices is being heard.
Listening to the concerns and needs of the Black community is a start. Addressing those concerns, designating someone to be responsible for following-up, and reporting on those results is more impactful.
Pay Living Wages
Black, indigenous, people of color (BIPOC) tend to be more highly represented in low-wage jobs and can be disproportionately affected by low wages.
This has been laid bare during the pandemic, as BIPOC individuals are more likely to be essential workers who don’t have the luxury of sheltering in place yet are putting their lives at risk for low wages.
This question on the Impact Assessment creates an opportunity for companies to take an objective look at whether or not their employees are earning a living wage.
If, as a company, you find that fewer than 75% of your employees are earning a living wage, that becomes an opportunity to make a change. The BIA is designed to help companies identify those potential opportunities, benchmark their progress, and set specific goals to make improvements.
This particular practice can help a company move away from vague statements about taking care of their people to ensuring that their workers are being paid a wage that they can actually live on.
Review Hiring Practices and Conduct a Pay Equity Analysis
Including a statement on your job descriptions about your company’s commitment to diversity, equity, and inclusion is a good start but it’s not enough.
Data has shown that racism is apparent in hiring practices, to the point of determining who even gets called for a job interview, with people with white-sounding names receiving more callbacks than people with Black-sounding names. This has not changed over time, and racial discrimination still persists.
Even after getting a job, there is a significant wage gap between white and black employees (and also between white employees and other people of color).
Companies can take direct action to address this problem in a number of different ways.
A statement is better than nothing, but concrete, tangible steps to remove unconscious bias from the hiring process and then to remove pay gaps are better.
Specifically, implementing policies for blind reviews of resumes, ensuring that job descriptions have inclusive language and provide salary information, and conducting a pay equity analysis can all help to address the systemic inequities that exist. Combined, they ensure a fair and equitable hiring process and compensation structure.
In addition, providing training about diversity, equity and inclusion is important, especially now. Particular attention can be paid to educating employees about antiracism. The B Corp community has compiled many useful antiracism resources.
Ensure Diversity in Management
Having diverse perspectives has been shown to boost a company’s profitability. The World Economic Forum has laid out the business case for diversity, noting that companies with diverse management teams have a 19% revenue increase compared to less diverse teams.
The reason is quite simple: a diversity of perspectives can present greater opportunities for innovation in a dynamic business environment. Good leaders know that listening to other perspectives challenges their own thinking, prevents groupthink, yields creative solutions, and builds empathy.
Despite the many benefits, however, Black people, people of color, women, and others are less represented at higher management levels.
If your company has a statement on equity, diversity, and inclusion but finds that there’s no diversity among workers, in management, and at the board level, this reflects a discrepancy between words and actions.
As the old adage goes, you can’t manage what you don’t measure.
Taking an objective look at diversity in the management ranks can shed light on a company’s true commitment. If there isn’t much diversity at the management level, the company has an opportunity to set a goal to increase that and then identify what practices can help it to meet that goal. This may include addressing hiring practices, creating an inclusive environment, and providing professional development opportunities.
Focus Charitable Giving Practices
Many calls-to-action, including the one issued by the B Corp Women CEOs in support of Black Lives Matter, have asked for financial contributions to organizations that are actively working in support of the Black community. This is an important step that anyone can take immediately.
Your organization can build on this by clarifying the impact that you want to have through your charitable giving. Is this a one-time donation or is there an opportunity for greater impact?
Some options that you can consider include developing a formal statement about your company’s philanthropy, so that you’ve considered how to align your charitable giving for a specific outcome. For example, if your company is committed to dismantling systemic racism, you can develop a formal statement around that and screen the organizations that receive your donations so that you select ones that are advancing that work.
You can take that a step further by making a formal commitment, such as a percentage of annual revenues, a monthly contribution, or a set amount per sale.
Another opportunity to do more is to allow your employees to select the organizations that your company will contribute to and matching their donations. This could be particularly meaningful for employees to donate to organizations that they are personally connected to or believe in.(Resource Generation provides a helpful resource for employees who may want to move beyond charitable giving to wealth redistribution.)
Support Underrepresented Suppliers
Choosing to explicitly support underrepresented suppliers, including those that are owned by BIPOC, women, queer folks, and those who may be differently abled, can shift the flow of capital in our society, helping to bridge the wealth gap.
Is your company working with local businesses or are you buying from corporations that have no stake in your community? Are you intentionally choosing to work with business owners who may not have had equitable access to opportunities?
Just as consumers can vote with their dollars, so too can companies choose to spend their money in ways that align with their values.
Two basic practices that anyone can start with are tracking supplier diversity and establishing a policy to support suppliers from underrepresented populations.
These are important steps because they will help you to establish a benchmark that you can track over time and begin to establish guidelines that your company can follow to diversify your supplier base.
Beyond that, you can set targets, which will help to actively seek out diverse suppliers. You may also consider establishing a formal supplier diversity program for your company.
Commit to Addressing the Climate Crisis
The climate crisis is deeply intertwined with racial and environmental justice.
People of color are more likely to be adversely affected by global warming, they’re more likely to live in areas with higher pollution rates, and they’re more likely to suffer the effects of air pollution.
A Black environmental activist has coined the term intersectional environmentalism, which centers racial and social justice work within environmental work, ensuring that our most vulnerable communities are protected alongside our natural resources. A Black climate scientist has also eloquently pointed out that racism derails our efforts to save the planet.
Bottom line, if you and your company care about the environment, you must address racial justice. It is not a separate issue.
The first step to tackling climate change requires that every company manage its greenhouse gas emissions. All of a company’s activities are resulting in emissions, from keeping the lights on to travel and commutes to the energy used to maintain the website.
In order to reduce emissions, companies need to begin by monitoring and recording emissions, such as by calculating their carbon footprint. Beyond that, they can then set reduction targets, which will involve identifying specific changes that they can make to reduce their emissions.
Every company can monitor and record their emissions and set reduction targets, ideally working towards a Net Zero commitment by 2030.
Getting Started
These examples are just the beginning. So much needs to be done.
The practices listed here can, and must, work alongside with numerous other efforts that are underway and desperately needed to end systemic racism. Policy makers, activists, educators, parents, religious leaders, consumers, investors, and everyone who cares about justice has a role to play.
As the co-CEO of B Lab Anthea Kelsick made clear:
We cannot credibly build an inclusive economic system without addressing the fundamental injustice, inequity and violence that disproportionately impacts Black people and other People of Color.”
We can start by doing this work within our own organizations. As business owners, we have the responsibility to set the course for our companies. Employees also have a role to play, by advocating within your organizations for change. Ultimately, as a Black tech CEO points out, we need to “change our company blueprints.”
I do believe that we’re at a watershed moment in our country’s history, and we have the responsibility and obligation to make sure that all the words and statements that have been made in the heat of the moment do not evaporate over time, only to be forgotten.
The fear, anger, and despair that we feel at the injustice around us can be channeled into our work, to rectify the wrongs of the past and present. Let’s get to work.
Next Steps
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