It’s easy for companies to make dizzying commitments to address sustainability or economic justice.
We saw a deluge of them in 2020, and they kept coming over the next two years. But what does it take to go beyond a press release and spend time and money on those promises?
“It’s really tough for a lot of companies,” CNote CEO Catherine Berman said at GreenBiz Group’s GreenFin 22 event on Tuesday in New York. Berman’s company helps companies move beyond superficial promises by using their balance sheets as a force for change. CNote often shows businesses how to transfer their money and investments to black-owned banks, for example.
“For many partner companies, this is the first time they’ve done this,” Berman said. “So I think it’s exciting. But I also think it’s an educational journey for a lot of our business partners.”
This journey is starting in earnest for many household names that came out in 2020 with bold statements. Kim Thompson, a director at PwC, is part of the CEO Action For Racial Equity Fellowship, a program that guides CEOs from small internal diversity, equity and inclusion initiatives to larger, public-facing actions.
“We’re making a difference, and it’s exciting to see multiple companies joining forces…all working with the goal of addressing systemic racism,” Thompson said at the GreenFin event.
There are varying levels of involvement in this work, Thompson said, with some CEOs just starting the conversation, and others — about 30 general managers — working full-time with the fraternity. They focus on a range of issues including health care, education, economic empowerment and public safety. Signatories to the initiative include 3M CEO Michael Roman, Ford Motor Co. CEO Jim Farley, General Motors CEO Mary Barra, and Hannon Armstrong CEO Jeff Eckel.
Do you want to be like the company of the past or do you want to be a leader?
The motivation behind these actions also depends on the company, according to Thompson. Some hear the call coming from inside the house, the employees calling for it. Others seek to satisfy customer demand for fair practices. Not to mention that competition is heating up and companies are trying to outdo each other when it comes to DEI practices.
“It happens anyway. Regulators talk about it. So everyone talks about it. Do you want to be like the company of the past, or do you want to be a leader?” said Thompson.
Becoming a leader in this area – and making real progress on justice issues – certainly won’t happen overnight for businesses. Thompson looks to the next few years with cautious optimism that the political pendulum will not swing in the wrong direction. This is a real possibility, with recent Supreme Court decisions starkly reminding us of the political divisions in the United States.
“I’m going to push so hard against the recoil the other way,” Thompson said.
Berman, meanwhile, emphasized that some steps toward economic justice don’t need to be complicated or controversial.
“I think money is one of the easiest ways for businesses to make a lasting commitment to racial justice. Money on your balance sheet could be invested tomorrow in communities of color,” Berman said.
“Entrepreneurship and home ownership in black communities are the two main sources of wealth creation. So if we are really going to change the wealth gap in this country and really advance wealth creation in black communities, it’s the corporate money that sits there – that can be moved literally tomorrow – that’s, I think, one of our biggest levers for change,” she said.
And while that might be a great first step for many businesses, it shouldn’t be the last.
“I would venture to guess that most of us want to see racial equity and a commitment to racial justice as a movement – not for a moment. And so, how do we commit sustainably? our business models, in our corporate program, in our board reports. To do it, not just once, not in a press release, but year after year,” Berman said.