Butterfly Effect: How Businesses Can Truly Bring Racism to Its Knees - OZY | A Modern Media Company
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Because by making it their business, firms can meaningfully move the needle on racism.

Charu Sudan Kasturi

Charu Sudan Kasturi

OZY Senior Editor Charu Sudan Kasturi's column, "Butterfly Effect," connects the dots on seemingly unrelated global headlines, highlighting what could happen next and who is likely to be impacted.

  • Several companies that have committed to supporting racial equality in recent days have been called out for hypocrisy.
  • But there’s plenty that corporations can do — through bold steps that allow them to hold cities, politicians and police departments accountable, and help those fighting racism.

When investigations last summer revealed that China had rounded up more than a million Uyghur Muslims, and forced them into so-called reeducation camps, Australian fashion brands Cotton On and Target Australia made a bold decision.

China, the world’s second-largest economy, doesn’t take slights lightly. Yet these firms declared that they would stop sourcing cotton from Xinjiang, the province that is home to most of China’s Uyghur community, as an act of protest against the prison camps.

Their example holds lessons for corporate America at a time many of the country’s companies have taken rare public positions against police brutality and in support of the Black Lives Matter campaign, following the killing of George Floyd on Memorial Day while in police custody.

Several of these U.S. firms — such as Amazon and Nike — have been called out for discriminatory or exploitative practices of their own. But it doesn’t have to be that way. Businesses can meaningfully help those fighting injustice in their battle for a fairer future. They’ve done it in the past. Here’s what they can do now:

Threaten to — or Actually Relocate

Cities that can’t get their act together to curb police violence and reduce systemic racial discrimination — whether in education, health or justice — don’t deserve the tax dollars that companies bring. True, if companies withdraw from a city, it deprives all residents — including people of color — of potential jobs. But the economic penalty will serve first and foremost as an indictment of those in charge of the city.

When Rev. Leon Sullivan, then the pastor of the Zion Baptist Church in Philadelphia and a member of the board of GM, suggested a boycott of apartheid South Africa in the mid-1970s, it seemed an audacious proposal. But in 1986, the car manufacturer did pull out of South Africa, as did more than 200 other American businesses over the following three years. That divestment crippled the South African economy and paved the way for the end of a racist regime.

Stop Funding Politicians With Spotty Records

Every year since 1914, the NAACP has brought out legislative report cards, rating members of Congress on their votes on civil rights-related legislations. Yet companies such as Citibank, Google and Amazon that are now speaking up for racial equity are also donating money to politicians who’ve received an “F” rating — reflecting the worst voting records on civil rights. This election cycle, Citibank has given $180,000 to 53 members of the House of Representatives with an “F,” and an additional $62,000 to 21 senators with the same rating, according to an analysis by the newsletter Popular Information.

Google has given $351,000 to 89 members of Congress rated “F” by the NAACP, according to Federal Election Commission records. Amazon has donated $389,500 to 137 members of Congress with an “F.”

That’s hypocrisy. Companies can help hold legislators accountable by withholding donations to them unless they demonstrate support for civil rights concerns through their votes.

Consistently Fund Those Fighting Racial Discrimination

Over the past fortnight, hundreds of American companies have pledged financial support for civil rights organizations such as the NAACP and the Center for Policing Equity. Together, businesses — including Walmart, Sony Music, Amazon, YouTube, Google, Facebook, Goldman Sachs and Verizon — have donated more than $450 million to charities fighting racism.

That’s good. But one-off donations — however large — only help so much in an ongoing battle for justice that won’t be settled anytime soon. Will these companies continue to put their money where their mouths are once the media spotlight has moved on? If they do, they could prove vital agents of change. Mahatma Gandhi counted on financial support from Indian industrialist Ghanshyam Das Birla to sustain his nonviolent freedom struggle.

Finance Black Founders

Police violence is only one extreme form of the racism that African American communities live with. Black Americans have less access to health insurance, their median income is a third lower than white peers, and their children are 10 times likelier to suffer from asthma. That bias also extends to entrepreneurs: Just 1 percent of venture capital-backed founders are Black.

Corporate America can change that by pointedly investing in Black founders to ensure that the community has long-term access to innovations, businesses and jobs. Skincare company Glossier has announced it will give $500,000 to support Black-owned beauty businesses.

Raise Premiums for Police Departments

Many smaller municipalities buy liability insurance for their police departments — to cover claims that arise because of complaints against officers. What if this were made compulsory for all police departments? Some experts, such as Professor Deborah Ramirez of Northeastern University, are even arguing that it be made mandatory for police officers to have individual liability insurance.

This would then create a market-driven mechanism — led by insurance companies — to police the police. If an officer or department faces multiple complaints, their premium automatically shoots up, serving as a deterrent.

Ultimately, though, it’s also critical for consumers to hold companies accountable, and force them to use the immense power they wield to influence policy and change society. If we ignore hypocrisy from firms in the face of racism, we’re guilty of double standards too.

Charu Sudan Kasturi

Charu Sudan Kasturi

OZY Senior Editor Charu Sudan Kasturi's column, "Butterfly Effect," connects the dots on seemingly unrelated global headlines, highlighting what could happen next and who is likely to be impacted.

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