As protests continue across the United States, calling for action to address
pervasive violence and human rights abuses against
Blacks,
often at the hands of police — driven by the senseless murders of George Floyd
and Breonna Taylor, among many others — businesses and brands have started
to speak out. Many have made noteworthy
pledges
and made sizeable donations.
While donations matter, changing the system requires more than recycled
philanthropy. Police violence is the focus of the protests, but the role of
extractive capitalism in perpetuating racial
inequality
for generations has been central, too. Low-income communities of color across
the country suffer from chronic underinvestment — not just in businesses, but
also education, infrastructure and healthcare — often unscaleable barriers.
“In America, capitalism was founded on land theft and free labor,” said Renee
Morgan, Social Justice Strategist and Financial Advisor at Robasciotti &
Philipson — an impact-focused and community-driven investment manager and
advisory firm — during a digital
event this week organized
by ESGX and HIP Investor.
“That legacy still remains today; it just keeps repackaging itself.”
Actions matter more than words; and if companies really want to help address
racial inequity in the US they need to first look internally, said Erin
McClarty — a social change architect and
attorney who works with businesses and other
organizations to design programs that have real social impact.
“Today’s systems of capital and investment are built around a purpose of
generating wealth for a few at the expense of the many,” McClarty said.
Companies should ask themselves, “am I merely trying to tweak a system for
communities that were previously excluded from this system for a specific
reason?”
When considering this, the aforementioned pledges no longer seem as impressive.
William Michael Cunningham, founder of Creative Investment
Research, is working to create a tool to track
corporate commitments to Black Lives Matter. While the dollar figures seem
impressive, the devil in the details.
“In a lot of these cases, all these corporations are doing is adding additional
dollar amounts to grants and programs they already have in place, an easy thing
to do,” Cunningham said. “These commitments are going to be all over the place —
equity, debt, charitable contributions. It’s not as good as it looks.”
What Cunningham and others would like to see is a shift from a focus on
diversity in hiring, donations and community assistance under the guise of
Corporate Social Responsibility towards companies and foundations looking at
equity — namely, giving power and ownership to communities of color. As McClarty
asserted:
“The focus on diversity doesn’t really do anything if you have a bunch of
people in the room that have no power. Until you have ownership and equity in
the company, trying to catch up is really difficult. Prioritizing inclusion is
crucial.”
Robasciotti & Philipson has created a model for a different type of approach.
Investment decisions are made not by an advisory board or managers, but by
social justice groups themselves and people of color directly.
“We center around Black, brown and indigenous-led organizations,” Morgan said.
“We’re not going to solve systemic issues with the same eyes and same points of
view that created them.”
Robasciotti & Philipson focus their investments in what they call transitional
capital, focusing on systemic problems. Ultimately, they want to invest in
regenerative communities, allowing investments to have an even bigger impact.
That is not possible now, because the mechanisms to invest regeneratively isn’t
there. To reach that point, there need to be broader shifts in how capital and
investment decisions are made; and a rethinking of our dominant economic model,
including how we define growth and profits.
“Half of the issues that we’re facing come from a faulty way of looking at
economics,” Cunningham said. Take, for example, the stock market — which keeps
rising and enriching the ultra-wealthy, even as unemployment
grows
and protests continue.
In the end, addressing racial inequality in the US will require more than
nice-sounding press releases and commitments to donate more money. Companies
need to begin investing in regenerative, local, grassroots-led businesses — and
be willing to share equity and decision-making with communities of color,
especially Black Americans.
Fixing centuries of racism and unequal access will require big changes in how we
do business if we are to truly move towards a more equitable, fair, and just
economy and society.
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Media, Campaign and Research Consultant
Nithin is a freelance writer who focuses on global economic, and environmental issues with an aim at building channels of communication and collaboration around common challenges.
Published Jun 11, 2020 8am EDT / 5am PDT / 1pm BST / 2pm CEST