05 Jan The Rise of Corporate Social Justice
More companies are taking a hard look at their own practices—and some are leading the charge for change.
Traditionally, companies have generally avoided speaking out on thorny issues like racial justice, gender discrimination, or the environment. That is, until the recent political, racial, and social reckoning in the United States prompted many to take a stand.
After the murder of George Floyd in May 2020, McDonald’s posted a tweet naming seven victims of police shootings and racist violence, and expressed solidarity with Black communities. Nike released an ad that was narrated by NFL quarterback Colin Kaepernick—who famously took a knee during the national anthem to protest police brutality—urging viewers to “believe in something, even if it means sacrificing everything.” According to McKinsey, one-third of Fortune 1000 companies made public statements about racial equity in the five months following Floyd’s murder.
Companies have also weighed in on issues as wide-ranging as gender equality, gun control, protection of immigrants, and safeguarding our natural environment. For example, when the Trump administration stripped federal protections from Bears Ears and Grand Staircase-Escalante national monuments in Utah, outdoor clothing company Patagonia warned customers, “The President stole your land”—and sued the administration.
As companies enter conversations around social justice, some savvy, committed women are helping them back their words with action—both inside their own walls and out in the world.
Building Better Policy
Many view 2020 as a watershed year for the cause of racial justice. “The events of 2020, specifically the killing of George Floyd, Brianna Taylor, Ahmaud Arbery, and others before them—and the 24-hour news cycle—brought to the forefront all of the issues disproportionately impacting the Black community in the United States, as well as other communities,” says Pia Flanagan, chief of staff to the CEO at MassMutual.
MassMutual was among the first companies to join CEO Action for Diversity & Inclusion, whose CEOs pledged to take specific actions to advance workplace diversity and inclusion. The effort now includes more than 2,000 signatory companies, with some taking their efforts a step further.
Last year, with her CEO’s blessing, Flanagan, the mother of a young Black son, took on the role of chief operating officer of CEO Action for Racial Equity, a new social justice fellowship program. More than 200 fellows—all from CEO Action’s signatory companies—have joined forces to advance public policies and corporate engagement to take on systemic racism and social injustice.
“I want not only my son, but all children, to see a world where they will have equal rights, equal opportunities, and equal treatment under the law,” says Flanagan, who, while still employed by MassMutual, turned her full attention to addressing societal issues in August 2020.
The fellowship program is a “think and do tank.” Using data-driven insights, the fellows are addressing systemic racism in four key areas—education, health care, public safety, and economic empowerment. They are advised by a Black Community Council comprising about 20 grassroots and civil rights organizations that have been working tirelessly for years.
Flanagan serves as a liaison to the fellowship team addressing equity in early childhood education. “If we do not fix the early childhood education system, we are going to leave some of our children behind, specifically Black children, as issues with limited availability, high costs, and inconsistent quality leave Black children at a disadvantage during critical years of development,” she says. “The data indicates that birth through age five is a critical stage in a child’s development. We also know that young Black boys are disproportionally disciplined and labeled, even at the early childhood education stage. It’s important that we get this right, because for every $1 invested in early childhood education programs for Black children and children from disadvantaged communities, there is a 13 percent annual return from better education and health outcomes for children, employment gains for parents, and greater economic productivity.”
The fellows intend to bring their learnings and experiences back to their respective companies. As Flanagan dives into the work, her son is a constant source of motivation. “As the mother of a Black son, I view the world through a different lens given how Black boys and men are perceived and treated in this country,” she says. “I go into that mama bear protection mode. I want to make sure that we are creating a future for him where he is limited only by his imagination—a world where he can thrive and flourish.”
Consumers increasingly are expecting companies to speak out on important issues, but some also have their antennae up for “woke washing”—the use of social justice as merely a corporate marketing strategy.
Olivia Knight, racial justice initiative manager at As You Sow, helps keep companies honest. “One of the biggest trends we saw was, and still is, [companies] throwing money at racial justice causes,” Knight says. “It’s wonderful that companies are looking for ways to support the Black community. But in some cases, perhaps those financial donations were a way of making a statement but not really changing any of their concrete practices.”
As You Sow monitors corporate behavior—from social justice to ethical sourcing of materials to climate impact—to help shareholders invest their values.
The organization’s Racial Justice Initiative, for example, uses a Racial Justice Scorecard to evaluate companies. “We are particularly looking at whether they made a statement after George Floyd’s murder last year, and if they did, what they said,” Knight says. Corporate statements are a start, but the bulk of a company’s score—80 percent—is tied to its policies and practices.
Knight’s journey has prepared her well for this work. After studying environmental analysis and Africana at Pitzer College, she worked in nonprofit health care. “Seeing which children got quality care because of where they lived, because of social and environmental factors, was really shocking,” she says.
She then earned a master’s in environment, development, and policy from the University of Sussex in Brighton, England, focusing on the implications of neocolonialism in international development policy. “My dad’s from Ghana, so I’ve always had this broad worldview,” Knight says. “And getting to play that out in my education was particularly helpful in guiding where I am now.”
After a chance meeting with Andrew Behar, CEO of As You Sow, she joined the organization to launch its Racial Justice Initiative. “As You Sow focuses on shareholder advocacy, so it’s really motivating people to become critical about how they invest their money,” she says.
Beyond creating scorecards to help investors track companies’ behavior, As You Sow speaks to companies directly and pushes them to do the right thing—from restructuring policies that are innately racist to disclosing data on hiring, retention, and promotion rates. “We help them understand what their stakeholders are looking for—so we’re having that conversation about antiracism, breaking that down,” Knight says. “We help them understand that disclosing more information based on race and ethnic data would be particularly helpful.”
Knight says that while some companies have simply used this moment to say something vague about racism, she does see energy around real change. “The slew of diversity proposals this year has been fantastic,” she says. “Requests for racial justice audits, wonderful. Companies are starting to understand what this means in terms of their business practices.”
As You Sow initially focused on evaluating the S&P 500, with plans now to expand to the Russell 1000 Index. “This scorecard is very dynamic,” Knight says. “We are in constant talks with companies and with our advisory committee. As DEI issues and racial equity issues change, or the conversations change around them, we’ll be taking that into account and keep the scorecard evolving.”
Voices from the Top
Some female CEOs, although they are still a rarity, have been vocal about social justice. Citigroup president Jane Fraser asked her industry to acknowledge its role in creating racial disparities. To help remedy those disparities, Citigroup made one of the largest corporate financial commitments—more than $1 billion—toward strategic initiatives to increase economic mobility in the US and close the racial wealth gap. The Citi Impact Fund will help more Black entrepreneurs get financing, increase access to home mortgages, and shine a light on Citi’s own policies and practices to ensure the company lives up to its commitment to become an antiracist institution.
Carol B. Tomé, CEO of UPS, says “there is no place in any community anywhere in the world for racism, bigotry, or hate.” The company’s Equity, Justice & Action task force has led advocacy efforts to pass hate crime bills in all 50 states and a federal antilynching act. The task force also partners with state and federal legislators to make it easier for all employees to vote.
UPS has committed $3.2 million toward programs supporting education, employment, small business, and advocacy, working with organizations like the NAACP and the United Negro College Fund. To promote better understanding of Black history and culture, it has also committed $1 million to the National Museum of African American History and Culture in Washington, DC.
Thasunda Brown Duckett, president and CEO of TIAA—one of two Black women running Fortune 500 companies—has conversations with her team about Black history. She believes the financial sector should be committed to “helping Black Americans chart stronger pathways toward economic success and empowerment.” TIAA’s Be the Change program includes antiracism advocacy among its employees and in its communities. The company also financially supports social justice organizations like the Innocence Project.
Not all companies are hopping aboard, however. Coinbase CEO Brian Armstrong has said that, although corporate social justice efforts may be well intentioned, his company has chosen to focus on business and keep mum about societal issues. He says such issues can be divisive—pointing to recent internal strife at companies like Google and Facebook—and feels that Coinbase employees should focus on what unites them.
Vivek Ramaswamy, a former biotech entrepreneur and author of New York Times bestseller Woke, Inc., says “woke capitalism” has created a culture of fear that suppresses free speech. “In the name of diversity, we’ve sacrificed true diversity of thought,” Ramaswamy says. And some employees appear to agree. In a Morning Consult survey of employed adults, 75 percent said “personal political views do not belong in the workplace,” with 79 percent of conservatives feeling that way.
But as images of police violence and other crises light up our screens, many companies say that staying silent isn’t an option if they want to be true to their stated values.
Pia Flanagan views social justice work as a natural extension of the DEI work that many companies had already committed to doing. “We saw that the business community was hungry to engage on a deeper level,” she says. “One company alone cannot do it. These issues of social injustice and racial inequities are generations- and even centuries-old issues. It takes a village to do this work.”
Knight says that ideally companies are taking action in hopes of making the world a better place, but says the C-suite executives she talks to also realize that social justice has become a bottom-line issue. “Consumers are paying attention,” she says. “Investors are paying attention.” DW
By Kimberly Olson