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What role can businesses play in addressing systemic racism within their organization and supply chain?

Jaron Loudwell

Businesses have a significant role to play in addressing systemic racism in their organization and supply chain. Studies have shown that companies with diverse workforces have better financial performance, increased innovation, and a higher ability to attract and retain talent. However, many businesses have not done enough to address the systemic issue of racism within their organization and supply chain.

One way businesses can address systemic racism is by implementing diversity and inclusion programs. These programs can include unconscious bias training for employees, hiring and promotion practices that consider diversity, and employee-led diversity and inclusion networks. In fact, according to a study by McKinsey, companies with more diverse leadership teams were 36% more likely to have above-average profitability.

Another way businesses can address systemic racism is by auditing their supply chains for racial equity. This can involve reviewing the diversity of suppliers and their hiring practices, ensuring fair pay and working conditions for all employees, and implementing environmental and social sustainability standards. According to a survey by the National Minority Supplier Diversity Council, diverse suppliers generate $700 billion in economic output and create 2.2 million jobs annually.

Additionally, businesses can partner with organizations and initiatives that promote racial equity. This can involve donating to organizations that work towards racial justice, participating in industry-specific diversity and inclusion initiatives, and engaging in public conversations on racial justice. According to a study by Edelman, consumers are more likely to buy from companies who stand for values aligning with justice and social responsibility.

Overall, addressing systemic racism requires collective effort from businesses, employees, consumers, and society as a whole. Businesses have the opportunity and responsibility to lead by example in fostering a more diverse, equitable, and inclusive workplace and supply chain. As consumers, we can support companies that make a genuine effort to address systemic racism and hold those who do not accountable.