Earlier this year, we once again saw a national dialogue around race jumpstarted by the unjust arrests of two black men in a Philadelphia Starbucks. In response, the company closed more than 8,000 stores to conduct a day-long racial bias training.

In the wake of this – and other – recent cases of corporate brands grappling with implicit bias, companies everywhere are watching and taking note about how to proceed. However, corporate trainings and policy tweaks alone, although important, aren’t enough.

To effect lasting change, companies must examine how individual, structural and institutional racism impact all aspects of their business—from policies and practices to products—and use these levers to promote inclusive growth, particularly for people of color. To ignore this important work puts both corporate reputation and long-term sustainability of the company at serious risk.

Many companies at the vanguard of this movement are motivated by troubling economic trends, such as stagnant wages, an increasing wealth gap, and persistent un- and under-employment – all of which are felt more acutely by people of color. What’s more, leaders in such companies recognize that by 2030, we will be a nation with no racial majority. Greater diversity should mean vast new opportunity for economic vitality benefiting a wider range of people.

Yet systemic racial inequities persist across nearly every indicator of well-being, maintaining steep barriers to economic success for America’s growing communities of color – the consumer and employee of tomorrow. Disparities are not just a moral crisis; they pose an economic threat.

Here are three strategies businesses are successfully implementing that other companies can tailor and adopt as part of a broader commitment to racial equity:

• Build a talent pipeline. To advance its mission of eliminating barriers to financial and social mobility and promoting inclusive growth, Prudential is focused on building a talent pipeline that both contributes to and draws from underserved communities. One example is Prudential’s real estate investment business, PGIM Real Estate, and its partnership with YouthBuild USA, an organization that helps out-of-school, unemployed young people find pathways to meaningful employment. Through YouthBuild, young people can earn a diploma, GED or other credential while learning valuable work and life skills by building affordable housing and other community assets. PGIM Real Estate has a broad network of relationships with developers and construction firms around the world, which creates access to quality jobs and apprenticeships for YouthBuild students.
• Ensure that products meet the needs of diverse customers. Authentically engaging with underserved customers could result in tomorrow’s most in-demand product or service line. Target Corporation’s Takeoff program, a startup boot camp, identifies emerging companies whose sustainable products solve for previously unmet needs of diverse consumers. The ten-company cohort includes brands like Iya Foods—marketing authentic African food products—and Asiya, an activewear brand creating hijabs for sports and physical activities. Participating founders have met with mentors, taken a crash course in retail, and pitched their products to experts, ultimately helping Target access new consumer audiences in the process.
• Invest in your own backyard. Chicago’s many anchor institutions—universities, hospitals, major corporations and more—generate constant demand for the varied supplies and services needed to function. Sixteen local public and private companies formed a network dubbed the Chicago Anchors for a Strong Economy (CASE), to help more local businesses—particularly those based in the city’s lowest-income communities—build capacity to meet anchors’ supply needs. By reexamining procurement channels, institutions can spur job growth and contribute to the vitality of the community.

Business leaders must do what they do best: recognize risk and seize the opportunity. Black and Latino Americans wield almost $3 trillion in combined purchasing power today, and that’s projected to grow. Already, companies concentrating on racial equity have created new business value and improved their bottom line, according to research from PolicyLink and FSG. Focusing on unique needs and barriers of historically marginalized communities can spark innovation around new products and services, broadening the customer base and strengthening the local talent pipeline. Bringing the same lens to internal policies can reduce employee turnover and increase engagement.

Companies like Unilever and Patagonia have long demonstrated how social impact and values like environmental sustainability could be interwoven into all aspects of their brand and business practices in a way that increases overall competitiveness. We argue that all companies can take a similar 360-degree view of traditional corporate social responsibility, beyond any one program or initiative, to place the values of racial equity and inclusion at the center of the business.

If we don’t address current disparities, our future majority—people of color—will be less financially secure than today’s population and will face persistent barriers to full economic inclusion. That’s devastating for an economy like ours, where growth is close to 75 percent reliant on consumer spending. Today’s competitive advantage rests in racial equity; business leaders should reassess their companies from the inside out accordingly.

If you have any questions or want to share your story on your racial equity journey, please email racialequity@livingcities.org