Companies have made bold racial equity statements and now stakeholders, including investors, are demanding to see the real actions behind those words. In this latest post in our Racial Equity in Action series, Olivia Knight, Racial Justice Initiative Manager at As You Sow, explores rising stakeholder expectations and the role corporations must play.
2020 was a catalyst for change as systemic racism, microaggressions, and antiracism—all terms often absent from corporate conversations in the past—were hurled front and center. As Americans were shaken into recognizing and confronting racism in every level of our society, companies took the opportunity to make bold, sweeping, social justice statements. 66% of companies in the S&P 500 made a statement in direct response to George Floyd’s murder. Statements ranged from noncommittal expressions of support to explicit acknowledgment of corporate complicity in perpetuating systemic racism and promises to actively change business models and adopt an antiracism framework. Externally, 36% of companies made financial donations towards racial justice causes.
At As You Sow, a leading corporate watchdog and shareholder advocacy non-profit based in Berkeley, California, we recognized this as a watershed moment. Companies could no longer stand on the sidelines of social issues—they had to take a stance against systemic racism in order to keep their customer and employee base engaged. Companies that perhaps had never given much thought to their relationship with racial equity have been compelled to take a hard look in the mirror and understand that their internal policies and their external actions may not be supporting and promoting racial justice.
I manage the Racial Justice Initiative at As You Sow. Our remit is to monitor and rank corporate statements on racial justice, their corporate diversity, equity, and inclusion policies and disclosure, as well as external actions towards achieving racial equity. Since June 2020, we have researched the S&P 500 and built corporate scorecards for each company, creating a snapshot of their corporate actions towards racial justice. Viewers of the scorecards are encouraged to educate themselves on how the company responded to George Floyd’s murder, but also critically look beyond the initial press statement to the company’s transparency around disclosing workplace data along racial and ethnic lines. A viewer is also motivated to ask, is the company doing enough in its policies and practices that I feel comfortable supporting it with my money as an investor or consumer?
“Systemic change to end systemic racism must include the corporate sector, and now, more than ever, companies must be held accountable for their actions on social justice issues.”
Critical thinking on issues of racial justice is quickly becoming the new normal, pressuring companies to make concrete, equitable changes in their business models that match the bold action plans many have created based on climate and other ESG goals. During corporate engagements with As You Sow, we have found that companies are curious how to achieve the best score possible on our Racial Justice Scorecards while also asserting that what they are already doing is enough. Our discussions have been a process of educating companies on how to critically evaluate their actions.
We do not claim to have a fool-proof step-by-step guide to achieve racial equity inside a company, nor do we have a model of the ideal diversity, equity, and inclusion program. But we do know, having looked at the public websites and resources available from the companies in the S&P 500, that corporate acknowledgment of systemic racism is vital, and yet only 17% of companies in the S&P 500 have made that acknowledgment. It is vitally important for companies to train their staff on DEI, unconscious basis, antiracism and the history of capitalism in American society, and how it has shaped our current structures. It is also paramount that companies are transparent regarding their internal and external actions related to race and ethnicity. Yet, only 15% of the S&P 500 have released a quantifiable goal related to their workplace diversity, equity, and inclusion goals. Stakeholders will continue to demand corporate disclosure on race and ethnic workplace data, perhaps most importantly, hiring, retention, and promotion rates of people of color within the company.
It took the horrific televised murder of a Black man under the knee of a police officer to shock corporate America into awareness of the existence of racial injustice and their responsibility for making systemic change at the corporate level. Systemic change to end systemic racism must include the corporate sector, and now, more than ever, companies must be held accountable for their actions on social justice issues. Companies must understand that their future success will depend on their willingness to address racial equity on all fronts- from their public statements to their internal policies to their external actions.
Continue to hear from thought leaders in this space by following our Racial Equity in Action series on the Presidian Blog, where we explore how, as sustainability and impact leaders, we can move the needle toward a more equitable and just society. Our series sits at the intersection of racial justice and social responsibility and features insights from the PGS community as well as external experts and thought leaders. Our goal is that through these shared insights we can better address racial inequity as a part of our day-to-day interactions and careers. If you’re looking to accelerate or shift your career, live your values, and lead with purpose, consider joining an upcoming cohort at PGS.