Systemic Racism: The Existential Challenge for Business

The ongoing demand for ending systemic racism has continued since the killing of George Floyd, and, following the recent unforgivable police shooting of Jacob Blake in Kenosha, WI, the calls for racial justice have increased. Over the last several days, street protests ensued in Portland, Denver, New York City, and other cities. Politicians took sides on law and order versus social equity with the election looming 60 days away. Social media exploded with videos of a vigilante shooting people with an assault rifle, while mainstream media catalogued urban chaos in Chicago and Kenosha. NBA players took matters into their own hands, pausing the playoffs—and prompting a sit-out of professional sports games from baseball to tennis to hockey.

Business must now decide how to manage three intertwined issues: Covid-19 and the ensuing economic downturn; the necessity of action on diversity, equality, and inclusion; and the election, which is prompting deep partisan divides. This is one of the greatest shifts we have seen and the thought that it will simply pass is unrealistic and out of the question. For both brands and corporations, the issue of systemic racism demands their attention and presents a historic opportunity. It is the crucible in which trust will be shaped for generations to come. Edelman has done a second special Trust Barometer report on The Fight for Racial Justice in America. We surveyed 2,000 general population respondents, properly sampled according to age, gender, region and ethnicity, in two studies, one the week of August 14–21, then again after Kenosha on August 28–31. From this research, we conclude that America’s need to address systemic racism is not going away—and business is expected to take the lead in addressing it.

Systemic racism has been a reality in the U.S.—historically and today—and is substantially more acute for Black Americans, who have a 400-year history of discrimination. In the research we see that the concern and call to address it is one shared by Black people as well as Whites and other communities. We see that government is now not trusted to make the change. The mainstream media is seen as reinforcing stereotypes and is doing a poor job of covering protests, leading to further reliance on social media as a primary source of information, though neither are credible venues for diverse communities. Finally, we see that business is the institution that all communities are looking to make the change, but that it is failing to seize the moment and move quickly on tangible actions, leading to a substantial gap between expectation and performance. Here is the supporting data:

1. The Black Community Stands Apart from Other Diverse Groups—Eighty percent of Blacks say that brands and corporations must speak out against systemic racism, versus 66 percent of Latinx and 54 percent of Asian Americans. There is consistently a 20-point difference for Blacks from Whites and a ten-point difference between Blacks and Latinx and Asian Americans.
2. Recognition of Systemic Racism Increased after the Jacob Blake Shooting—More than three-quarters of Americans see that systemic racism and racial injustice exist in the U.S. today (76 percent). The Black community remained the highest at 88 percent while the White communities appreciation grew 5 points to 71 percent. Support for the protests also soared among Republicans, though from a low base (up 17 points to 38 percent); contrast that to Democrats at 78 percent.
3. The Age Divide is Evident—Young people (18–34) are much more inclined to support the protests (69 percent) versus their parents (55+) at 48 percent. The same divide applies to support of Black Lives Matter, with 67 percent of the 18–34s and 50 percent of the 55+.
4. The Government is Failing—Only 36 percent say that government is hearing the call for racial justice. That is amazingly consistent for White, Black, Latinx and Asian American respondents. There is only slightly more trust in local government officials than federal officials as spokespeople (44 percent vs. 36 percent), again consistent among all four ethnic groups. There is a huge gap between White and Black respondents on trust in local police officials (52 percent vs. 34 percent).
5. The Media Are Seen as Fueling Racism—Mainstream and social media trail advocacy organizations and activist organizations as trusted information sources for Blacks and Latinx by about ten points. In a stunning finding, 30 percent of Whites believe that there is no trustworthy information source. Only 17 percent of Republicans feel that mainstream media is the place for truth about racism. Nearly two-thirds of respondents said that the media focuses too much on rioting and not enough on peaceful protests, led by Latinx at 70 percent and Blacks at 67 percent. And two-thirds of Blacks feel that the media promote and perpetuate stereotypes of people of color, versus only 44 percent of Whites.
6. Business to Lead—Over half of the respondents say that business has heard the call for racial justice (52 percent), sixteen points higher than government (36 percent). Nearly half (42 percent) of the respondents say that brands and corporations must fill the leadership void left by government. Two-thirds of respondents also want brands and companies to speak out against violence inflicted on those participating in protests, including those who do not personally support the protests. Small business is substantially more trusted than large corporations (62 percent versus 43 percent), with big companies scoring especially low with Black respondents (37 percent). We are getting recognized for progress in redressing racism at work across all groups (59 percent). The central role of business is underlined by the fact that 77 percent of the U.S. population says it is deeply important that companies respond to racial injustice to earn or keep their trust.
7. Both Corporations and Brands Are Expected to Take a Stand on Racism—This is a striking complement to our June report, where attention mostly focused on brands, leading us to conclude that the issue has become transversal for companies. There is a major difference between Black and White respondents, with 81 percent of Blacks and only 54 percent of Whites believing that corporations should publicly speak out against racial injustice. And now the most important motivation for companies is to satisfy their employees (52 percent), not insisting that my brands stand with me (37 percent).
8. Companies Are Failing to Deliver—Too much talk, not enough walk. Business is failing to act on racism, with major gaps between expectation and performance among all ethnic groups. On Create Change, there is a 27-point gap), on Educate and Influence, there is a 25-point gap and, for Get Their Own House in Order, a 28-point gap. Blacks identify performance gaps ranging from 41 to 45 points, Latinx, 27 points, and Asian Americans, 30 points. Words without action are dismissed as performative and exploitative, with three-quarters of Blacks saying brands and companies need to follow up statements of support for racial equality with concrete action. Under half of respondents (44 percent) believe that the business community has taken concrete action. Three-quarters of Black respondents see racism within their organizations; two-thirds of Latinx say the same.
9. CEOs Get Low Marks—In an alarming finding, company CEOs are the least trusted of twenty spokespeople (32 percent) on racial injustice; below Republican leaders (33 percent) and half as trusted as social scientists and experts on race (63 percent). Seventy-one percent said that most CEOs are incapable of recognizing racism around them. Meanwhile, the bar is raised for CEOs, with 55 percent saying they have to be actively anti-racist (65 percent of Blacks), to address racism within their own companies but also must speak out against racism in the community.
10. Actions Must Be Focused—Businesses can take several steps to drive change, but they must be focused. Sixty-one percent of respondents say that companies need to establish zero-tolerance policies toward racism and ensure that all levels of the company are racially representative (59 percent). But business is also expected to address the root causes of racism (54 percent), with higher scores for Black respondents (71 percent).
11. More Than a Bottom-Line Issue—Companies that take a stand on systemic racism are 4.5 times more likely to gain trust than lose it. This is especially true of Blacks (7.5x), young respondents (5.5x) and women (5.5x). Brands that address racial issues are four times more trusted, with equal effect across all races. But there is a clear bottom-line effect, with 48 percent of respondents saying that how a brand responds to the protests has a huge impact on likelihood to purchase (64 percent of Blacks) and 37 percent saying they will buy or boycott based on a brand’s response (51 percent of Blacks). But a stunning half of respondents are unaware of a brand’s actions to address racism.
12. Trust is Local—The most trusted spokespersons on racial injustice are my friends and family (67 percent). While the most trusted institution to respond to systemic racism is my employer, at 71 percent, versus business in general at 50 percent and government at 36 percent. The most credible spokespeople within a business are the D&I leader at my company (56 percent) and my HR leader (55 percent). My CEO is trusted by 53 percent of respondents, which is 21 points higher than CEOs in general.

Business has not only the opportunity and permission but the obligation—to lead in the quest to end systemic racism.

• Business must acknowledge that anti-racism is both a daily act and long-term journey. The goal is not color blindness. Rather, it is to create a culturally aware workplace environment where everyone can be seen for who they are. Statements of support must be followed with tangible actions, from hiring, retaining, and promoting diverse talent to achieving full racial representation in the supply chain.
• CEOs must partner to gain credibility with those more trusted on the topic of racial justice—CHROs, D&I officers, and vetted, third-party experts and advocates.
• Marketers have a key role to play in dismantling racist tropes and stereotypes and promoting full representation in brand storytelling.
• Business must understand: This crisis of trust is first and foremost about Black Americans, who suffer uniquely from police brutality and the effects of 400 years of mistreatment. Business can and should at the same time act to redress racism suffered by Hispanic, Asian-American, and other communities.

We are at an historic crossroads. The path of silence, inaction, and equivocation will be seen as complicity in an ongoing moral and human crisis. Martin Luther King famously said “the arc of the moral universe… bends toward justice.” Now is the time to actively and urgently help bend it. History is watching us all.

Richard Edelman is CEO.