How B Corps Can Lead in the Wake of Affirmative Action’s Repeal

Business Leaders Must Get to Work to Advance Racial Equity

By B Lab U.S. & Canada

June 29, 2023

The Supreme Court’s ruling to end affirmative action has the potential to reshape the fabric of society and hinder hard-won progress toward racial equity. What does it mean for our movement of business as a force for good if universities no longer reflect the diverse makeup of society? And how can B Corps  – businesses committed to building an inclusive, equitable, and regenerative economy – address racial inequity in business in the wake of this decision?

Now is not the time to move backward on racial justice. Ending affirmative action will reduce the future earnings of many Black and Latinx people and widen the racial wealth gap. As Justice Sotomayor wrote in her powerful dissent, “The devastating impact of this decision cannot be overstated. The majority’s vision of race neutrality will entrench racial segregation in higher education because racial inequality will persist so long as it is ignored.” 

The ability to consider race as a factor in college admissions traces its roots back to the Civil Rights movement of the 1960s. The impact it has had on equity in higher education is undeniable. Affirmative action has led to higher representation of Black, Indigenous, and other students of color at selective universities. This has meant higher-paying jobs, leadership positions, and access to other spheres of influence that still remain mostly white. Affirmative action has been a key practice to reverse the effects of college legacy admissions policies. Studies show legacy admissions policies significantly increase college acceptance rates for white, male students from wealthy backgrounds.

If history is any guide, Black and Latinx students will be harmed the most by affirmative action’s repeal. They already face widespread structural barriers to college admission. In states like California, Texas, and Washington, the number of underrepresented minority students at flagship public universities plunged after the elimination of affirmative action, and in many cases hasn’t rebounded. In California, the number of Black and Latinx students admitted to UCLA and UC Berkeley dropped by nearly half after affirmative action was banned. It’s taken two decades and over half a billion dollars of investment to bring those numbers back up. Meanwhile, the financial impact of shutting students out of these institutions lasts for generations. 

Addressing Racial Inequity Through Business Practice

B Corps are businesses verified to meet high standards of social and environmental performance, transparency, and accountability. They are models for how businesses can advance Justice, Equity, Diversity, and Inclusion (JEDI). The “J” in JEDI – justice – plays a pivotal role in this process by ensuring fairness, equal opportunity, and the elimination of discrimination and systemic biases. 

We can look to B Corps as a model for what works. Greyston Bakery, a B Corp based in Yonkers, NY, launched an open hiring model that does not require interviews, background checks, drug tests, or resumes. This has led to faster recruitment and higher employee retention. It’s also meant a positive economic impact for its local community. On average, the company generates almost 7 million dollars per year of local economic impact through public assistance savings, increased tax revenue, and reduced incarceration costs.

Education, Then Action

B Corps can lead the movement to define what good business looks like in a world without affirmative action. Despite the rise in DEI and anti-bias training in recent years, many companies still lack the tools to meaningfully diversify their workforce. This was a key goal for our Racial Equity Impact Improvement Program, launched in April 2023. The program builds on the work of the Corporate Racial Equity Alliance and the CEO Blueprint for Racial Equity. It takes a holistic look at how businesses can increase opportunities for Black, Indigenous, and other People of Color and close the racial wealth gap. 

This is just one of several recent initiatives we’ve launched to support B Corps in addressing systemic racism. Our Racial Equity Learning Journey aims to educate businesses about the root causes of racial exclusion and inequity. The course provides a solid foundation for implementing solutions. Together, these initiatives help B Corps help move businesses from education to action in areas like open hiring, inclusivity, board diversity, living wage, and more. 

“Anti-Woke” Laws Hold Us Back

B Corps and other impact-driven businesses increasingly find their JEDI practices under attack from “anti-woke” laws, primarily being introduced at the state and local levels. Pressures businesses could face after the Supreme Court’s affirmative action decision include laws banning race-conscious efforts to increase diversity in the workplace or litigation against corporate diversity programs. We must work proactively to protect B Corps’ ability to use inclusive hiring practices and educate their workforce about racial equity. 

Now is the time to elevate the role B Corps play in creating a just, inclusive, equitable, and regenerative future. We must emphasize what JEDI means for companies practicing it in the real world: greater economic opportunity, higher retention, and teams who are equipped to address modern challenges. 

Like the repeal of affirmative action, the impact of these “anti-woke” narratives is generational. What we do today matters for tomorrow. That’s why we must get to work now, ensuring that our narrative of a stronger future wins out.

 

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