B Lab Forces for Good Podcast — Episode 7: How can business advance racial justice?

Our current economic system is built on a history of injustice, inequity, violence, and oppression. But businesses do have options to build more inclusive workplaces.
By B Lab Global
January 17, 2023

Episode 7 of the Forces for Good podcast Our current economic system is built on a history of injustice, inequity, violence, and oppression. But businesses do have options to build more inclusive workplaces. On the show, we speak with businesses (both large and small) that are attempting to disrupt legacies of oppression.  In this episode we aim to answer:

  • What can companies do to dismantle these conditions of violence and oppression in their business practices?

  • How can business standards drive our economy towards a system that is more equitable, inclusive, and just? 

  • What is the significance of SDG10, Reduced Inequalities, in working towards a just and anti-racist world for all workers?

Guests include: 

  • Ellonda Williams, Director of Justice, Equity, Diversity, and Inclusion, B Lab Global

  • Ana Luiza Herzog, Reputation Manager, Magazine Luiza [Magalu] 

  • Laura Thompson, CEO & Co-Founder, Clothing The Gaps

  • Sarah Sheridan, Deputy CEO & Co-Founder, Clothing the Gaps

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Laura: [00:17:46] people talk about allyship brands wanting to be better allies. And we started to see more dark skinned models and it's great. But on the flip side [00:17:57][10.5]

Laura: [00:18:09] What else are you doing? What are you doing internally within your organization? Tell us about that. Do you have a reconciliation action plan? Do you employ any Aboriginal people or is this for external facing rather than internal? [00:18:24][14.8]

Ana: [00:02:37] the other striking fact is that Brazil was the last country to abolish slavery in the West. [00:02:48][10.5]

Ana: [00:02:55] And what did we do afterwards? Nothing. We provided them nothing to improve their lives. [00:03:03][7.9]

Ellonda: [00:41:16] A good leader is a leader who understands what anti-racism is. A good leader is someone who's able to think differently and invite other people to the table [00:41:25][9.8]


This is Forces for Good, a podcast from B Lab, the nonprofit network powering the global B Corp movement. Forces for Good takes a hard look at how businesses are helping to solve the biggest social and environmental challenges of our time. I’m your host Irving Chan-Gomez

On our podcast, you’ll hear from B Corp leaders, industry experts, and changemakers. We’ll tell you about what companies are doing to move beyond buzzwords--and change destructive practices across industries. We’ll ask tough questions to uncover how we can truly drive positive impact for people and the planet.

Our global economic system is built on legacies of colonization, slavery, and white supremacy. We cannot hope to build an inclusive economic system without addressing this history that disproportionately impacts Black, Indigenous, and People of Color to this day.

Businesses have started to address racial equity through Diversity Equity and Inclusion or DEI initiatives. In this episode, we’ll look at what those initiatives are and what companies can do to dismantle conditions of violence and oppression in their business practices. 

And we’ll dive into how business standards can drive our economy towards a system that is more equitable, inclusive, and just! 

We’ll have conversations with B Lab staff as well as members of the broader B Corp Movement, who are confronting racial inequity head-on

Magalu - or Magazine Luíza - is a B Movement Builder company based in Brazil. B Movement Builders are multinational companies committed to the principles of the B Corp movement--and are often on the pathway to becoming Certified B Corporations themselves. 

Ana: [00:02:02] The biggest number of Africans in the West were sent to Brazil. The country alone received almost 5 million captives, which is 40% of the 12.5 million captives, which is 40% that were sent to America and continent as a whole. [00:02:26][23.7]

Ana Luiza Herzog is Reputation Manager at Magalu (ma-ga-loo) - one of the biggest retail chains in Brazil.

Ana: [00:23:06] The fact that during decades we lived with this fake idea that we had, contrary to the U.S., we had this racial democracy in Brazil. Everyone here got along well. I mean, we don't discriminate against no one. We are happy country. I mean, this was this is fake. We are as racist as the U.S., [00:23:42][35.9]

In 2020, Brazil’s Vice President Hamilton Mourão (moo rao) claimed “racism doesn’t exist in Brazil.” But Brazil was the last country in the Americas to abolish slavery // and Black Brazilians earn just 57 percent of what their white counterparts do today. 

Ana cited these systemic issues that have made it difficult for Black people to climb the corporate ladder. 56 percent of Brazilians identify as Black but only 5 percent of executives in Brazil’s top companies are Black. 

Ana: [00:04:52] there's something terribly wrong with the country. And all we have to do is to change that. And every single company has to play a role in changing that. And why should we do something? It's a moral imperative. But in addition, today, it's good for business. And it's good for Brazil, [00:05:16][24.1]

According to Ana, Magalu’s leadership felt compelled to tackle Brazil’s racial divide in a bold way. CEO, Frederico Trajano (trej-ah-no), opened its elite executive training program only to Black applicants. 

Ana: [00:12:35] the rule was that we only accept Black applicants. And we thought there was a way to start moving things, to start changing things internally. [00:12:49][13.7]

In Brazil, Magalu’s executive training program is exclusive and often seen as a stepping stone to top corporate positions. But while the initiative found huge support it also faced major criticism. 

Ana: [00:17:06] when we launched externally and we were in the middle of that huge criticism and people questioning the initiative, they were telling us that Magalu was being racist. This is not right. How can you breathe? How can you prevent white candidates, white, talented young professionals to join this trainee program? So we have that. We have the support from our employees. We had the support from the opinion leaders that interested us that were important to us the most. Right. But still, it was quite controversial. [00:17:55][49.6]

What Magalu’s affirmative action program has done is try to create equity. In an article in ‘Brazil Journal’ when the program started in 2020, Frederico Trajano wrote about how Black applicants faced an uphill battle when applying. 

He cited fluent English as a requirement that barred many, otherwise qualified contenders from poorer communities. And with only 10 Black trainees out of 250 in previous years - the application process may have seemed in-sur-mountable to many candidates.  Trajano said the goal was to put Black candidates on equal footing with white applicants. This idea of helping everyone get to the same starting place is called equity.

Dr. Ellonda Williams is the Director of Justice, Equity, Diversity, and Inclusion or JEDI at B Lab Global. She defines equity similarly to Trajano.

 Ellonda: [00:09:39] equity and equality are not the same thing. Equity really is about not just giving everyone the same thing as but taking into consideration where people start. Equality is something that sounds really great, right? We all want to feel fair. We want to feel as though everyone is getting the same things. But we have to take into consideration that some people have started a little bit further along than others. Some people have more privilege, some people have more opportunity than others. And so How do we not just think about giving everybody the same thing? But building equity is really about giving people what they need in order to succeed. [00:10:23][43.8]

Making a move to combat centuries of racism isn’t easy but it’s a business imperative. Companies with more diverse leadership tend to do better financially and they have happier and healthier employees. Ellonda says companies like Magalu have to keep working toward racial equity. No matter the criticism or how long it takes.  

Ellonda:[00:13:46] at B lab, we think about this all the time. We're thinking about capitalism. We're thinking about systems. We're thinking about creating and using business as a force for good and creating better outcomes for everyone. 

In 2020, discussions of racial inequality gripped the United States, and the world. Whether they liked it or not, people were confronted with the realities of world history particularly around colonialism and slavery. And stakeholders in companies all over the world demanded action. 

Ellonda: [00:06:41] a lot of organizations just took off running with hiring a chief diversity officer or a JEDI director, a DEI director, without the support, without the leadership buy-in. And so you're kind of like dead in the water. You don't really have an opportunity to push initiatives as far as they can really go. We've seen a lot of these types of roles that are siloed, right? It's easy for these types of roles to get siloed. And H.R., it's easy for them to get siloed in spaces where they have very limited control and limited opportunity to create change. [00:07:16][35.6]

But in many cases, that action was too rushed to make a difference. Racial equity is a complex, systemic, and societal issue. Ellonda says businesses that want to create sustainable change have to plan and make space for their teams to do the work. They also have to tailor their approach to their location and their people.

Ellonda: [00:07:29] thinking about strategy, thinking about governance, thinking about leadership and the board and how are we actually embedding inclusion into the space and really thinking about operational strategies and strategically how we are going to be thinking about how we look at inclusion, but not just in a cultural space because JEDI is a lot more all encompassing than that. And if you really want to create long-term systemic change, then you have to think about how are you going to embed Jedi into all aspects of business, not just like one little corner. [00:08:09][40.3]

The Justice, Equity, Diversity and Inclusion; JEDI, framework is built to be all encompassing. 

Ellonda: [00:09:23] before we got to JEDI,  it was equity, diversity and inclusion. Maybe even before that, it was diversity and inclusion. And we just keep adding these letters. But I really think that the letters are extremely important to really create the systemic change that we see. [00:09:39][16.4]

The newest letter is J for Justice. It’s about dismantling the societal barriers that cause oppression. 

Ellonda: [00:11:25]  Justice is really about taking a look at systemically how are people affected, how can we think about the outcomes that people experience as we are taking part in these systems that oftentimes are not fair, are not equitable, were not built to be equitable and were not built with equitability in mind. [00:11:47][21.9] 

While these concepts of justice, equity, diversity and inclusion may be familiar to some people, Ellonda says many others are just coming to understand them. And many others don’t understand the historical context that has created racial barriers in the first place.

Ellonda: [00:18:39] So this is a very, very new conversation and some people are having to challenge all of their beliefs. How they were raised, how they understand business to operate. How they understand what success actually looks like. They're having to question and revisit their entire way of thinking [00:19:02][23.0]

And so shifting mindsets takes time

Ellonda: [00:19:17] Creating culture change is extremely hard, and it takes a lot of time. So to have the expectation that in five, ten years time, we're going to have that shift that we seek, I think is unrealistic. We're not there yet. [00:19:33][16.0]

And conversations about racial equity CAN be uncomfortable.

Ellonda: [00:19:33] what I think is shifting is, I can have a conversation at work with my coworkers, with my colleagues, with leadership, with the board around white supremacy culture, around racism, around anti-racism. These were conversations that I was charged with doing my work sans these conversations. We couldn't have these conversations because they made people feel bad. We did. We weren't entrusted with things that made people uncomfortable. When we know that culture change, culture shifts and change doesn't happen until you're uncomfortable. We cannot create change unless we're willing to kind of lean into that discomfort as an organization, as a people, as a movement, we have to be willing to understand why these things make us feel uncomfortable. How can we change our thinking? [00:20:22][49.5]

But just because action might not happen overnight or it isn’t comfortable, doesn't mean we shouldn’t do it. 

Ellonda: [00:15:15] So when we think about some of these challenging industries that at times create barriers at times create harm to be thinking about how we can think about doing things in a better way to improve outcomes, right? It's not about being perfect. It's not about eradicating all things that make humans at times uncomfortable. It's about thinking of how we can do this in a better way to again, dismantle barriers and create space for everyone. [00:15:48][33.1]

Different businesses have come up with different approaches and solutions to tackle racial equity. Magalu is one of the largest retail chains in Brazil so it had the opportunity to make a major difference. Here’s Ana again. 

Ana: [00:06:59] Magalu has this mission of providing to many what only a few have. Right. And you can translate that mission into lots of things. Right. We can translate that into giving low income people credit so that they can buy a TV or a couch. It means allowing brick and mortar small entrepreneurs to sell online in our marketplace and be part of this digital world. Right. And it also means giving Black, talented young professionals the opportunity to work in a company like Magal. [00:07:49][53.4]

Ana says when they implemented the changes to their executive leadership program in 2020, Magalu examined the makeup of its corporate leadership. The diversity of their employees looked good on the surface, but they quickly realized that there were fewer Black people in leadership roles. And despite mixed feedback, Ana says the company is proud of their decision-- and they believe it has been a success. 

Ana: [00:13:50] we were aware we are gonna trigger some criticism even especially externally. Right. We were very careful in telling everyone, in telling all employees we are going to launch, we were very careful we involved Black managers, although the initiative, the purpose of the initiative was to bring in more Black people so that we would have more Black people in leadership roles. We do have Black leaders, right? And we asked them to join us in their discussion. They helped us think about the program how were you going to explain that to the media, to all different stakeholders you can imagine. Right. We asked we invited NGOs, activists to join us in the discussion so that we would do things right. I mean, we were very afraid at that moment because a phrase in the sense that. Now today, I can tell you, oh, we know a lot about racial issues. I mean, we learned quite a bit since 2020. But at that time, I think the good thing we did is that we admitted we know nothing about this. So we need help. We need to talk to Black people. We know we need to talk to activists, to NGOs. I mean, let them teach us the right way of doing this. [00:15:33][103.7]

Magalu’s leadership had to educate themselves before they made any moves. They also have other strategic equity initiatives, including trainings. 

Ana:[00:21:40] The trainee program is the most famous. You know about it. I mean, it was. I mean, New York Times wrote about it. But we have other initiatives. They are very strategic. Another program which is called Luisa Colt. And what is that? We train women for technology. Right, because we know the technology sector is predominantly male, white and male. And we have quotas for Black women and. What else? There's something which I found of paramount importance. We have around 35,000 employees associates. Nowadays it's huge. Magalu is huge. And we are making this big effort to train all leaders, managers on diversity and inclusion, because I think most people are illiterate. [00:22:51][70.5]

DEI or JEDI training is important because these programs are not just about hiring. They’re also about retaining employees and making them feel valued.  That’s why education has to be tailored to a specific place and company. Relevant history and systemic factors have to be shared. Certifie B Corporations in other places have different approaches to racial equity. 

Clothing the Gap is a fashion label based in Australia, and has been a Certified B Corporation since February 2022. Laura Thompson and Sarah Sheridan are co-founders. 

Laura: [00:02:10] I'm a Gunditjmara woman.

The Gunditjmara (gun-ditj-mara) are an aboriginal people from SOUT-H--eastern Australia.

 Laura: I grew up in Fitzroy in Melbourne And my family were really influential in starting the Aboriginal Community Controlled Health Services here in Melbourne. And as a result, I sort of had a love of health and health promotion in particular, but I just always wanted to work for my mother and my family for better health outcomes. [00:02:39][29.2]

That’s Laura. Her co-founder Sarah had a different upbringing.She’s notAboriginal and had little exposure to Aboriginal communities until she moved to Melbourne as a student. That’s when Sarah met Laura, working with her on the Healthy Lifestyle Team at the Victorian Aboriginal Health Service.

Sarah: [00:04:26] we worked together at the Health Service for a number of years and did some really incredible things. And then we decided to step out into business together as a way of doing things a little bit differently and creating change in a different way. [00:04:39][13.1]

Laura: [00:05:30] So we wanted to do health promotion work that was perhaps more community driven and led. So we thought perhaps business could be a way about health promotion as a business isn't particularly a great business idea. We've had that because not many people want to pay for health promotion. So we found ourselves subcontracting to lots of other organizations that also had funded health promotion. So we were still doing the work that will just, you know, subbies to lots of places. And our first big gig was in a men's prison delivering health promotion there. So it was our first gig. It was probably enough for us to make a decision to leave the Victorian Health Service at the time together. [00:06:13][43.2]

Laura and Sarah didn’t just want to turn a business into a force for good. They wanted to build a business as a force for good from the outset

Sarah:[00:07:33] people would often say to us all, you know, you're really thinking outside the box, so you're breaking all the rules. Or like, we don't even know what the rules are. We're just doing what we think makes sense and is what people want to do and making the best decisions that we could at the time with the resources and the information that we had around this. And yet really, I guess, just really followed our business in that way. So rather than, I guess being confined by what we thought we had to do, we did what we thought was the right thing to do. [00:08:04][30.8]

Laura and Sarah’s health promotion business eventually evolved into Clothing the Gaps. They sell shirts and other clothing with activist messaging that celebrates Aboriginal people and culture.

Sarah:[00:21:51] we create merch with the message. So we see the opportunity of every time that somebody gets up in the morning and they pull on a piece of clothing that they can then carry a conversation out into their world. Everybody has a circle of influence to share those messages with, and it's really exciting when we see a parcel going out the door that's being packed by our incredible team in house, knowing that that's a conversation starter that's going out to create change. [00:22:16][24.4]

Many of their products bare the words “always was, always will be.” Meaning Australia always was and will always be Aboriginal land. Others say “Sovereign Land” or recognize Aboriginal and Torres Strait people as “custodians of country.”

Sarah: [00:10:19] So I think when we look at the role of business in creating change or taking a stand against things that we want to see shift in society, businesses reach into every single facet of our lives. [00:10:36][16.7]

Sarah: [00:11:01] businesses have a responsibility to understand the impact that they make across people's lives and the opportunities that they have to change that for the better. So I really see business as an incredible vehicle to be influential with that, you know, whilst using product and campaign messaging and, and it being just beyond selling something or creating a service to be able to create an enormous amount of change in that. [00:11:31][30.1]

Clothing the Gaps sells products specifically for indigenous individuals and clothing that is ally friendly. 81 percent of their employees identify as Aboriginal and Torres Strait Islander people. 

Laura:[00:12:06] we don't often use the term racial equity, but we talk about uniting people through uniting people through a cause and fashion. But I guess at the core of it is about creating, you know, racial equity and social justice for Aboriginal people. It's at the core of everything that we do and it's what keeps, it's what sustains me in business. And coming from community to business, I didn't think I would get that satisfaction for business. But at the same time, I really believe business has more power to create this change. [00:12:46][39.8]

Clothing the Gaps has already created major change with one of their campaigns.

Laura: [00:14:23]  if we look at some of our messaging that we've been able to do, the Free the Flag campaign that spoke to the Aboriginal copyright issue and we talked about flags, flag equality left the Aboriginal flag was one of the only copyrighted flags in the world and Aboriginal people have to pay and ask permission for that through the brand and through the message we're able to advocate. But our community of people who bought a shirt just didn't advocate with us. We saw other big brands in Australia stand alongside us, use their platform to share the content we were creating, to support us to bring in new audiences who otherwise wouldn't have discovered us. And all of that combined led to a Senate inquiry and actually freeing the Aboriginal flag for everyone to use. But it's a really great example of not just what Clothing the Gaps can do, but what other businesses can do when we all work together to leverage.  [00:15:20][57.2]

Proceeds from clothing sales go back into the Clothing the Gaps Foundation and health promotion.

Sarah: [00:23:15] the life expectancy gap between non-Aboriginal people and Aboriginal Islander people in this country is still disproportionately large. We know that the majority of the reasons for that actually come back to things that we can influence through lifestyle changes around, especially around physical activity. So we love being able to encourage people to get moving. We run a really cool program every year. It's called Mob Run This, and it's attached to our virtual fund run series. Essentially what we do across the foundation is we package up a really amazing program that works alongside Aboriginal and Islander community groups to run their own pop up fun run events in their own communities. [00:23:59][43.7]

Overall, Laura and Sarah have built Clothing the Gaps as a force for good and a force for change. They expect other businesses to follow.

Sarah: [00:31:34] businesses are nothing more than a group of people. So I think that's a really lovely reflection to start with in that it does start with us as individuals. It's our responsibility to do our homework, to educate ourselves and to get our heads across and our hearts as well across these issues. It's not enough to sit back and say, Well, I didn't know. We all have literally Google at our fingertips. It's not okay to just not know any more. [00:32:09][34.4]

Similar to Sarah, B Lab’s Ellonda Williams has some similar advice.

Ellonda:[00:29:35] I think that we really want to start with education. [00:29:39][3.3]

Ellonda:[00:29:40] We really want to start with educating your leaders. A lot of times when we're having conversations around civilians and social justice matters. JEDI,I Anti-Racism, a lot of times these conversations start with colleagues, staff the population of, of the staff members who work within an organization. But these conversations really should be starting at the top. They should be starting with the CEO. They should be starting with your board. They should be starting with funders and conversations that we're having with people that are actually helping the business stay up and running. And so you have to educate yourself. And I think as I mentioned before, we have to first acknowledge that inequities exist. Right? You have to first be able to acknowledge inequities do exist and people see the world and experience the world in different ways. [00:30:36][56.0]

Businesses that are trying to get started can take notes from Magalu, Clothing the Gaps, and other Certified B Corporations. Any business can make a difference and be a force for good but they need to listen to their communities and stakeholders first. And they need to follow business standards to ensure they’re on the right track.

Ellonda: [00:32:01] JEDI work is not quick. It's not one size fits all. You can't just do it and be done with it. It's about talking to your constituents. It's about talking to your community. It's about opening up the dialog in the conversation around what's working and what's not working, but it's really about building trust. Organizations oftentimes make the mistake in asking but not listening [00:32:25][24.1]

And whatever commitments a company makes, they have to hold themselves accountable and follow through. They also have to keep updating and evaluating their approach to make sure it’s working. Even B Lab is re-evaluating itself to provide better standards and tools for companies to tackle racial equity. 

Ellonda:[00:45:33] It's been really important to have the conversation with our standards teams around where are these points coming from? And is there a minimum? Is there a minimum requirement? And as it relates to justice, equity, diversity and inclusion as it relates to any number of topic areas, is there a minimum? Right. It doesn't really matter if you've earned the minimum number of points needed to be a B Corp, if you have not earned the minimum number of points related to justice, equity, diversity and inclusion. Can we really say that you are best for the world? We can't. we have to be more specific and we have to be more targeted about how we are holding organizations accountable. [00:46:41][68.7]

Irving’s closing thoughts: Business can often be recognised as a system capable of lifting people from poverty and other ways to improve people’s lives. However, as we get confronted with the flaws of this system, it is also important to recognise the legacies of colonization, slavery, and white supremacy that helped establish the system in the first place. Only until business recognise and understand its past, will it be able to truly shift its future, and with it, its legacy. So what would it be ? One of ecological catastrophe and exacerbated social inequality ? Or one that levels-up the field so that everyone - especially Black, Indigenous, People of color and non-human species, have an equal chance at a fulfilling and viable future. The choice is yours. 


If you'd like to learn more about B Corps and purpose driven companies visit BCorporation.net. And listen to the rest of our season! We have more episodes on how business can drive positive impact and be a Force for Good.

Please subscribe, rate, and review the podcast on Apple Podcasts, Spotify, or wherever you listen. Your ratings and reviews help Forces for Good reach new audiences, so we thank you for your support.

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The views and opinions expressed are those of the interviewees and do not reflect the positions or opinions of the producers or any affiliated organizations.

The podcast was brought to you by B lab. Our team includes Sherri Jordan, Jude Wetherell, and Hannah Munger.  Forces for Good is produced by Hueman Group Media. 

For this episode, I’d like to thank Ellonda Williams, Laura Thompson, Sarah Sheridan and Ana Luiza Herzog.

 I’m your host, Irving Chan-Gomez. Thanks for listening. And I look forward to catching you in the next episode!

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