This Program Helps B Corps Dismantle Racism

After George Floyd was murdered by a Minneapolis police officer in May 2020, U.S. companies large and small pledged to take an inward look to better understand how their business models perpetuate racism and harm communities of color. Banks vowed to change their lending practices, while retail businesses promised to stock more Black-owned brands and companies of all sectors committed to diversify their C-suites and boards.

Some backed off their claims as "woke" became a dirty word, but others stayed the course, even as the work grew difficult or fell out of the news cycle. Among those who kept at it are the executives who took part in the Racial Equity Impact Improvement Program at B Lab, the nonprofit that certifies businesses as B Corporations.

Launched last year, the program brings corporate executives together on an eight-week learning journey to discuss the ways businesses can dismantle racism. Together with B Lab facilitators and subject matter experts, the company leaders unpacked complicated subjects like wages, hiring, and ensuring diversity at the department level, in the C-suite and on boards. Many went on to fundamentally change their businesses as soon as the cohort wrapped, with one switching her business to be 100 percent employee-owned and another improving fair chance hiring policies for people with criminal justice involvement. 

"We're living in a very polarized moment right now in our country unfortunately," said Hugues Sygney Jr., senior program manager on the racial equity team at B Lab in the U.S. and Canada. "You have a lot of folks who are, quite frankly, scared of things like litigation and having these courageous conversations around topics that post-George Floyd were some of the most important topics being discussed. All of a sudden, now it's going in the opposite direction. Hence why we are not imposing this on anyone. This is a journey. You have to be called to it." 

As the program completes its second year, we sat down with Sygney to find out what companies learned, how they're putting it into practice, and what's next for the program as it looks to scale. 

What is the Racial Equity Impact Improvement Program, and why do B Corps need it?

Most B Corp businesses have a social or environmental bent to begin with. They must pass rigorous social and environmental assessments to be certified, and out of the more than 330 million companies globally, only around 8,000 can call themselves B Corps. 

But as sustainability darlings like Patagonia and REI called out in their 2020 reflections, everyone has room for improvement. All of us with decision-making power in the U.S. have fallen short in using that power to bring about true equality for all people, even the "good" executives and the "good" brands. If we hadn't, the U.S. wouldn't find itself in the situation where people of color have less wealth on average compared to white people, their businesses and nonprofits receive less funding, and they're less likely to be promoted at work.  

Launched in April 2023, the Racial Equity Impact Improvement Program looks to educate leaders about these disparities, their historical context and how B Corps can leverage their businesses to dismantle discriminatory systems piece by piece. Partners including Honest Jobs, Just Capital and Beyond Inclusion Group lead discussions on topics like paying a living wage, establishing fair chance hiring programs and creating benefits that allow employees to build wealth. 

"Racism is explained in a way that provides context to businesses and how certain businesses still perpetuate these policies that continue to widen the wealth gap [and] continue to marginalize those who are not given the support and resources needed in order for them to thrive," Sygney said. "We leveraged our CEO Blueprint for Racial Equity, which was designed in partnership with the Corporate Racial Equity Alliance, to provide a tool that would support B Corps in advancing around these areas." 

The first cohort paved the way with 12 B Corp companies identified through a detailed process to assess their internal capacity and openness to change. "They really wanted to do the work," Sygney said. "They understood the 'why' of what they're trying to see within their impact in communities."

After the eight-week program, the leaders told B Lab they left with a completely new perspective on how their businesses could do more to counter discrimination for their employees and communities. "From that first iteration, we've seen significant impact and significant interest," Sygney said. "We've had companies immediately shift their business practices because of the program, and that helped us understand that this type of program really adds value." 

Understanding racism and racial equity catalyzes big change for B Corps

B Lab's Racial Equity Impact Improvement Program goes beyond discussing general themes and historical context to break down specific corporate policies that can improve equity and correct bias.

The practical approach resonated with B Corps like Community Services Group, a Pennsylvania provider of mental health and disability services that was among the program's first cohort. The company's executives completed an anti-bias program and worked with a diversity, equity and inclusion (DEI) consultant in the past, but they had trouble translating what they learned into actionable next steps. "We struggled to identify operational changes we could make to increase diversity in our workforce and make our work spaces safe for all perspectives," CEO Susan Blue told B Lab. "We applied to the Impact Improvement program because of its focus on action through operational changes.” 

Those operational changes could mean a company adjusting its starting wage or bonus structure, changing how it recruits and hires, or creating new benefits that positively impact employees. 

"When we say 'anti-racist frameworks,' we're not just saying get a couple of Black, Indigenous and people of color into your board, or take a couple of anti-racist trainings," Sygney said. "What we're saying is it's important to have these courageous conversations internally, have dialogue with your community, identify partners that could be from a different demographic of people you would normally not work with, and challenge leaders to think outside the box in ways that really bridge community." 

For Miren Oca, founder of Ocaquatics Swim School in Miami and another member of the first cohort, it meant transitioning ownership of her company to a 100 percent employee-owned trust. 

"[The program] explored topics like wealth-building and creating financial wellness benefits that level the playing field for all employees,” she told B Lab. "Employee ownership acknowledges the contributions our team members have made to the success of our business while empowering them to take responsibility for the continued impact and prosperity of our business for good." 

Derek Hydon, founder of the sustainable branded products company MaCher, was also struck by what he learned and translated it to action through fair chance hiring.

Not only did the company modify its own practices to delay background checks in the hiring process and limit the information collected, but it also worked with program partner Honest Jobs to educate other companies about fair chance hiring and why it matters. Among the other changes made in the year since completing the program, MaCher employees now mentor students through the Creative Futures Collective, and the company established a scholarship program to help Indigenous students attend design school.

The first cohort of participants were so impacted by their time together that they established an alumni group to stay in contact after the program wrapped, and they advised the second cohort of 14 B Corps as they entered their eight-week journey. “Learning with others in a cohort group is so beneficial, and also creates mutual accountability and support,” Hydon of MaCher told B Lab. “I’m grateful for the ripples the training continues to provide.”

How can impact like this scale?

The tailored nature of the program helped it to have a significant impact on the 26 companies that participated so far, but it also creates clear limitations as B Lab looks to scale. 

The nonprofit aims to enlist 30 to 40 B Corps in the next iteration, but it's also looking to bring the program online to open it up to more B Corp leaders in the coming years. 

"Within the U.S. and Canada alone, we have over 2,500 B Corps," Sygney said. "To really be able to reach as many B Corps as possible, we have to get into the digitalization of this program. Right now, it's very curated in a very small cohort." 

Based on what they've seen from early participants, Sygney and his team are optimistic about the future of the program and the systems change it can inspire as it scales up. "What we've seen thus far is that folks are very interested," he said. "Despite all of that fear, we have seen positive feedback and positive commitment by leaders. We are really grateful for the leaders in the B Corp space who continue to show up and lead in ways that we've been seeing from the inception of the movement."