Geeta Aiyer, President and Founder
On Juneteenth last year, just weeks after George Floyd’s murder, we promised to rededicate ourselves as investors and movement builders to the tasks of advancing antiracism and building a shared future with fairness, inclusion, and collective wellbeing. This past year has heaped new tragedy and economic hardship on communities of color as the pandemic and recession took their toll. The year also brought statements of solidarity and ambition from many companies; others built awareness and education.
This Juneteenth, the imperative is to move from awareness to action, from pledges to practice.
Recognizing the economic roots of enslavement and the persistent, foundational role of financial exclusion in systemic racism, we are moving forward to leverage investor capital and investor voice to build justice and equity, inclusion and belonging.
As we go to press, there is continued debate on whether these issues belong at the investor’s table. The sad truth is that finance theory has traditionally put investors in a zero-sum relationship with employees, contractors, or any community engaged in creating the products or services a company sells. Thus, all efforts to impoverish employees, deprive them of benefits or protections, the pursuit of “free” or “near-free” labor – from prison populations, elaborate systems of precarious contract work in dangerous conditions, supply chains with egregious human rights practices – is undertaken in the investors’ name. Such financial orthodoxy has enabled the exploitative, short-sighted business models and structural racism we are witnessing.
As future-oriented investors, we reject this view. Widening inequality without mobility, supported, and perpetuated by structural racism, represents a growing systemic risk. Unchecked, it threatens the very fabric of our society. Conversely, antiracist efforts to address inequity can enable us to realize our full potential for resilient, inclusive prosperity. Investors have a role to play in creating the future we seek.
Taking stock of our own journey this year, we note some milestones. Raising the urgency of diversity, equity, and inclusion efforts in the ranks of portfolio companies has been the critical first phase of our work. Even more important and exhilarating is the second phase: the task of addressing the value chain of each company, its products, processes, and policies, leveraging the significant reach, impact, and opportunity for change they represent.
- We embarked on an ambitious, thoughtful, Workplace Racial Equity initiative, listening, learning, comparing, and sharing best practice and challenges from our portfolio companies. Reaching deep rather than broad, this journey has created opportunities for insight from company leaders about setting targets and achieving them, reflections on what worked and what did not. We asked many direct questions: who is at the table, what is the road map, what goals are set, who is held accountable, and at what level of the leadership team?
- We are challenging the institutional racism built into the very foundations of commerce: the products and services offered by corporations, the policies and practices that underpin lasting inequity. We are mapping the impacts and opportunity for action across economic and investment sectors. Everywhere we look there is room to avoid harm and create solutions.
From the Financial sector, whose predatory lending practices and redlining have helped perpetuate dramatic wealth inequality in the past but are now able to improve mobility through access to credit and support services; to retailers with location choices in deprived areas and potential shelf space for Black vendors; to grocers able to create access to nutrition; to consumer goods purveyors with opportunity to create safer, non-toxic products and avoid unhealthy options and marketing practices perpetuating stereotypes; to Healthcare companies creating affordable treatments and solving access challenges, to the Technology sector, grappling with huge inclusion challenges while also preventing coded bias in facial recognition, AI, biometric surveillance, and data science implementation. So much to engage on and change, among portfolios companies, and system-wide.
From our past work, we identify three mutually reinforcing areas of sustained effort that enable change:
- Proactive, tenacious Investor voice.
- Monitoring of data and meaningful metrics to ensure accountability.
- The creation of an ecosystem that sustains best practice creating a race to the top among companies.
The next phase of our work has begun. We seek equity and justice in the broadest sense as the foundations of our interconnected future.