It’s easy for corporations to make splashy commitments to address sustainability or economic justice.
We saw a deluge of them in 2020, and they’ve kept coming in the two years since. But what does it take to move beyond a press release, and put money and time behind those pledges?
“It’s really hard for a lot of corporations,” Catherine Berman, CEO of CNote, said during GreenBiz Group’s GreenFin 22 event Tuesday in New York City. Berman’s company is helping firms push past surface-level promises by using their balance sheets as a force for change. CNote often shows corporations how to move their money and investments into Black-owned banks, for example.
“For many corporate partners, this is the first time they’ve ever done this,” Berman said. “So I think it’s exciting. But I also think it’s a journey of education for a lot of our corporate partners.”
That journey is beginning in earnest for many household names who stepped out in 2020 with bold statements. Kim Thompson, a principal 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 toward bigger, public-facing actions.
“We’re making a difference, and it’s exciting to see multiple companies joining forces … all working toward a goal of trying to tackle systemic racism,” Thompson said at the GreenFin event.
There are different levels of involvement in that work, Thompson said, with some CEOs only just starting the conversation, and others — some 30 chief executives — working full-time with the fellowship. They’re focused on an array of issues including healthcare, education, economic empowerment and public safety. The initiative’s signatories 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 look 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 are hearing the call come from inside the house, with employees demanding it. Others are looking to satiate customer demand for equitable practices. Not to mention, competition is heating up, and companies are trying to outdo one another on DEI practices.
“It’s coming anyway. The regulators are talking about it. So everybody is talking about it. Do you want to look like the company of the past, or do you want to be a leader?” Thompson said.
Becoming a leader in this space — and making real progress on justice issues — certainly won’t happen overnight for corporations. Thompson is looking at the next few years with a cautious optimism that the political pendulum won’t swing in the wrong direction. It’s a real possibility, with recent Supreme Court rulings serving as a stark reminder of the political divides in the U.S.
“I will be pushing so hard against the pullback in the other direction,” Thompson said.
Berman, meanwhile, emphasized that some steps toward economic justice need not be complicated or controversial.
“I think one of the simplest ways for corporations to make a sustainable commitment to racial justice is cash. The cash that sits on your balance sheet could be invested in communities of color tomorrow,” Berman said.
“Entrepreneurship and home ownership in Black communities are two primary sources of wealth creation. So if we’re really serious about changing the wealth gap in this country, and really advancing wealth creation in Black communities, it is the corporate cash sitting there — that can be moved literally tomorrow — that I think is one of our greatest levers for change,” she said.
And while that might be a great first step for many corporations, it shouldn’t be the last.
“I’d venture to guess most of us want to see racial equity and a commitment to racial justice as a movement — not a moment. And so how do we commit to that sustainably? That takes enterprise commitment. That takes literally baking it into our business models, into our corporate agenda, into our board reports. To do this not once, not in a press release, but year over year,” Berman said.