By Nathan Arnosti, Director of Products & Analytics
(This article first appeared on the Ramsey County website.)
Businesses across the country have demonstrated a renewed interest in reckoning with our country’s systemic racial inequities in the 18 months since the police killing of George Floyd. According to a review by McKinsey, approximately one-third of the largest 1,000 companies in the nation made statements in support of racial equity in 2020 and committed more than $66 billion to advance racial equity.
In addition to the moral case for change, more and more leaders understand that racism is bad for business. Companies with racially diverse and inclusive teams perform better than more homogenous organizations. And if racial inequities were eliminated across society, our collective prosperity would grow by trillions of dollars, according to a recent report by researchers at the Federal Reserve Bank of San Francisco.
But moving the needle on racial equity will require more than just well-intentioned statements and donations from business leaders. It requires changes to how businesses treat Black, Indigenous, Latinx, and Asian job applicants, existing employees, suppliers, customers, and communities.
Introducing the Racial Equity Dividends Index
In January 2022, the Center for Economic Inclusion will introduce a new analytical tool that businesses can register for to help them make tangible, durable changes to inequitable internal systems, policies, and practices. The Racial Equity Dividends Index (REDI) will enable businesses to measure their progress on racial equity across seven dimensions: Hiring; Culture, Retention, and Advancement; Procurement; Philanthropy and Investment; Public Policy; Products; and Leadership.
How REDI Works
Businesses that register for the Racial Equity Dividends Index will be evaluated on their progress across 37 racially equitable workplace practices, drawn from the expertise of Center for Economic Inclusion staff and other practitioners at the forefront of corporate racial equity strategies. Businesses then receive a confidential score report, which will identify where they excel and where they fall short compared to peers.
Collectively, this knowledge is essential to guiding future efforts to advance racially equitable and inclusive practices within their organization.
REDI is designed to celebrate and accelerate progress toward antiracism. High-scoring businesses will be publicly recognized and highlighted in an annual Racial Equity Dividends Index Report and included on the Center for Economic Inclusion’s Best Businesses for Racial Equity list.
Availability & Fee
The Racial Equity Dividends Index will be available on an annual basis. In its first year, REDI is available to for-profit businesses with a footprint in Minnesota. In the coming months and years, REDI will be available in other markets.
To register for REDI, businesses are charged a $1,000 administrative fee. More information about the Index and link to registration will be available soon at www.centerforeconomicinclusion.org.
Measurement Matters
Today’s racial inequities are the result of racist and inequitable practices within the private and public sectors, sustained over generations. It will take deliberate action from all of us – including leaders in the private sector – to overcome these harmful patterns and build an economy that works for everyone. Data drives action – and this is what the Index does at its core.
The Center for Economic Inclusion’s Racial Equity Dividends Index is the newest tool we offer to help businesses chart a path to greater racial equity – and profitability. We hope that many businesses in Ramsey County and across Minnesota seize this opportunity to move from a verbal commitment to racial equity and inclusion to meaningful action that gets results.