Part I: Assess

Why racial
equity now?

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To achieve racial equity, organizations must be willing to transform their beliefs and values, and then change their decisions and behaviors.

Why racial equity now?

Calls for action against systemic racism and racial injustice are not new. But recent events—from the COVID-19 pandemic and ensuing economic crisis that have disproportionately hurt Black Americans1 to numerous public killings of Black people—have sparked a new era of heightened awareness, understanding, and expectation for action, including by the business community.

61% of Americans now believe the United States needs new civil rights laws to combat discrimination against Black Americans—a nearly threefold increase from 2011.2 An even greater number of Americans—77%—say companies must respond to racial injustice if they expect to “earn or keep [public] trust.”3

Many leaders recognize the imperative to respond to these demands for change. A January 2021 Fortune/Deloitte CEO survey found that 94% of CEOs report that diversity, equity, and inclusion (DEI) are strategic priorities for them as CEO, and nearly three-quarters plan to disclose DEI metrics to the public.4

Despite agreeing that change is needed, many leaders have come to realize how difficult it will be to create meaningful, measurable, and sustainable change. They are left with the question: How can we make real progress toward racial equity?

Racial equity is an outcome

To start, organizations must move from focusing on good intentions to focusing on good results that can be measured against a demanding standard: equity. Racial equity for Black individuals will exist when they have the same power, access, and influence as White individuals.

Equity necessitates an intentional focus on the needs of the historically marginalized. It requires deliberate and often courageous actions that acknowledge and eliminate the societal inequities ingrained in people, processes, and systems. It takes commitment to examining and redressing the bias and racism built into everyday decisions, which may appear fair on the surface, and which may have even been designed with good intentions, but ultimately have disparate effects on racial and ethnic minorities and other marginalized identity groups. And just as business leaders focus on financial and operational outcomes rather than just inputs, they must also focus on the outcomes of their efforts to drive systemic change.

To achieve racial equity, organizations must be willing to transform their beliefs and values and then change their decisions and behaviors. That work should start inside the organization, but also extend to the full range of their external relationships in the marketplace and society.

Inequity in American business by the numbers

Among all US companies with 100 or more employees, Black people hold just


of executive or senior-level roles.9

Today, 1% or less of Fortune 500 CEOs are Black.

Black men,
on average, earn


of what the average White10 male worker earns,11

while Black women, earn only


of this same amount.12

Enrollment in American postsecondary institutions will climb


from 2014 to 2025, with larger proportional increases among minority students than White students.13

Yet, Black individuals with a college or advanced degree are


more likely to be underemployed* than their White counterpoints.14

*I.e., their potential available time underutilized, whether through unemployment, involuntary part-time work, or marginal attachment to the labor force.



of venture capital–backed entrepreneurs are Black.16

Black employees are overrepresented in low-paying frontline jobs and non-technical industries.17


of White households own equity in the stock market,

(The median investment: $51,000)

compared with a minority


of Black households.18

(The median investment: $12,000)

In just the first two months of the COVID-19 pandemic, the number of Black-owned small businesses fell.


compared with


for White-owned small businesses.19

Racial equity will create business value

Racial inequities remain visible in much of the data about business and the workplace today. But there is hope: The organizations that work to right injustices and cultivate equity have enormous potential to reap the benefits.

That’s because…

The Black population is growing

As of 2019, Black Americans numbered 43.9 million people—or around 13.4% of the US popuation.20 That number is estimated to grow 38%, to more than 60 million people, by 2060.21

…as is Black purchasing power

Despite the widening racial wealth gap between Black and White Americans,22 Black buying power is rising—from $320B in 1990 to $1.3T in 2018.23

Consumers, especially younger ones, expect action

90% of all Gen Z support the Black Lives Matter movement.24 Additionally, 94% of that generation expect companies to take a stand on important social issues, and 90% are more willing to buy products that benefit the environment or society.25

…as do workers

67% of job seekers (and 89% of Black job seekers) report that a diverse workforce is important when considering a job offer.26 Nearly 50% of Gen Z believe employers should be doing more to promote inclusion, and 72% believe racial equity is the most important workplace issue today.27

…and investors

Public and private investors are increasingly demanding that organizations take action on racial equity and requiring that companies disclose annual data on the composition of their workforce by race and ethnicity.

For example, Vanguard Group, the world’s biggest mutual fund company, has published expectations for public companies to disclose board diversity measures and make progress toward increasing the diversity of their boards.28

Racial equity is good for everybody

Not addressing key racial gaps is estimated to have cost the American economy $16 trillion over the past two decades. If the gaps are closed today, it is estimated that $5 trillion can be added to the US GDP over the next five years alone, including tens and even hundreds of billions more dollars spent on food, housing, apparel, transportation, and entertainment each year.29,30

“The equity imperative requires bold and active engagement of the most senior leadership of organizations to effect change. Boards and CEOs must probe and challenge leaders to drive better results. Delegating responsibility to chief diversity officers is no longer an option.”

Valerie Irick Rainford, CEO, Elloree Talent Strategies

Racial equity requires a new approach

Achieving equitable outcomes will require coordinated and sustained effort across the business community, as well as a mindset shift. While past DEI initiatives have made progress for some people in some places, the data make clear that US business still has a long way to go on the road to equity.

These seven principles can guide the way


The business community must lead


Equity is a core business issue


Equity requires sustained commitment


Every enterprise should be a social enterprise


Beliefs drive behavior, behavior changes beliefs


The power to spend is the power to change


Collective action amplifies impact


The business community must lead

Business plays a central role in the journey toward racial equity. Businesses have the power to effect meaningful change internally while influencing social behaviors, rules and standards, and government policy.

“Government’s job is to set the floor, the minimum standards to which we all must adhere, but business’s job is to strive for a high ceiling.”

Valerie Jarrett, former senior adviser to President Barack Obama; board member, Walgreens Boots Alliance, Ralph Lauren, Lyft, 2U, Ariel Investments, and Sweetgreen31


Equity is a core business issue

Traditionally, organizations have siloed DEI efforts in human resources or have made them discretionary (e.g., philanthropic donations). In order to drive meaningful change, organizations must view equity as an imperative for its business strategy and all parts of growing the business, incorporating it into every aspect of what they do (e.g., marketing, procurement, finance, technology), at every level of the organization. Workers must hold leaders accountable, and vice versa, rewarding outcomes over activity and valuing impact over intent.

“It needs to be part of the personal accountability for all leaders and every individual in an organization to institutionalize new systems and expand their thinking.”

Dr. Sally Saba, chief inclusion and diversity officer, Medtronic32


Equity requires sustained commitment

Equity requires much more than a one-off initiative—it must be embedded into how a company does business, and it must be sustained over time. Organizations must provide the education and dedicated resources leaders need to continuously build toward, and hold to, equitable outcomes.

“With DEI work, unlike many other parts of a business, it can seem like you get a medal for just trying. This work is strategic, requires investment, initiative, and headcount. We need to apply the same level of rigor to DEI that we apply to everything else we do.”

Bahja Johnson, head of Customer Belonging, Gap Inc.33


Every enterprise should be a social enterprise

Organizations will benefit from considering their role as a “social enterprise,”34 measured by their impact on all stakeholders—including shareholders, the workforce, customers, and society as a whole. Stakeholders expect businesses to make this shift; shareholders will benefit from it.

“In the long run, companies are better served thinking about stakeholders. Shareholders will, in fact, make more money if business leaders focus on all stakeholders.”

Doug McMillon, CEO, Walmart; chair, Business Roundtable35


Beliefs drive behavior, behavior changes beliefs

To achieve equitable outcomes, organizations must overturn common beliefs and behaviors that get in the way. Organizations can help individuals adopt new behaviors and actions. Those behaviors can shape new values, and those values can reinforce new behavior. The result, over time, will shift the organizational culture toward one that more consistently supports equity in practice.

“There is a strong American belief that people are poor because they don’t work hard enough, that if they worked harder they could get out of poverty. We need to change that.”

Dr. Beverly Daniel Tatum, president emerita, Spelman College


The power to spend is the power to change

Organizations have the power to drive equity through all the ways they spend money. Directing funds in pursuit of equitable outcomes through everyday business operations can yield great immediate and downstream impact.

“When you think about how businesses spend money and who we spend it with, there is a significant economic impact that flows out of the items that we buy.”

Shelley Stewart, chairman, Billion Dollar Roundtable; former chief procurement officer, DuPont36


Collective action amplifies impact

Positive change can be reinforced and amplified through collective action—organizations uniting to challenge each other, learn from one another, change outdated rules, and mend broken systems. Organizations can create feedback loops that promote change and reinforce action at the individual, market, and societal levels.

“It's an ecosystem, so there has to be systemic change in the public, private, and nonprofit sectors. We have the opportunity to make more progress in the next few years than we’ve made in the last 50 if we galvanize the broadest coalition of engagement on racial equity we’ve ever had.”

David Clunie, executive director, Black Economic Alliance37

We believe equity is everyone’s responsibility. Expectations should be highest on those with the most power and influence to drive change—today’s leaders—and as most leaders know, “tone from the top” is key to setting priorities and guiding action. At the same time, leaders should tap into the expertise and lived experiences of Black individuals and members of other marginalized groups—leading the way while elevating others’ voices and contributions.

A call for collective action

The status quo within organizations needs to change. That is why organizations need to reimagine DEI—from development through implementation to measurement—and regularly update and adapt actions to enable equitable outcomes.

Leaders must challenge their own assumptions about what works, and try new, and perhaps even more courageous approaches. Most importantly, they must shift their focus to equity, treating it the same way they would any other business outcome: with careful planning, clear metrics, and continuous actions to meet the objective.

As organizations embark on this journey, there will inevitably be roadblocks. Leaders may be tempted to take shortcuts—to settle for one-off efforts or focus on superficial actions. And there may come a point where the benefits seem intangible, the work seems formidable, and willpower seems to wane.

But the future of racial equity hinges on whether businesses will leverage their immense power—both individually and collectively—to make progress. A more equitable future is possible. And it will be determined by the actions we take now.

Anti-oppression: The theory, strategy, and active practice of confronting individual and institutional power and privilege to consistently challenge and dismantle exclusionary and oppressive systems, policies, practices, and organizational values. Anti-oppression recognizes the pervasiveness and seriousness of oppression and actively seeks to challenge, eliminate, and prevent it. More broadly, anti-racism is a type of anti-oppression.

DEI: The acronym DEI (for Diversity, Equity, and Inclusion) represents the summation of activities and/or the formal function within an organization that focuses on supporting diversity, anti-oppression, inclusion, belonging, and equity aspirations and outcomes. Diversity, inclusion, and anti-racism are distinct, but related—they can each exist without the others, but are mutually reinforcing.

Diversity: The representation, in a group, of various facets of identity, including (but not limited to) race, ethnicity, nationality, gender identity, LGBTQ+ status, socioeconomic status, ability, religion, and age.

Equity: The outcome of diversity, inclusion, and anti-oppression actions wherein all people have fair access, opportunity, resources, and power to thrive, with consideration for and elimination of historical and systemic barriers and privileges that cause oppression. Equality, by comparison, is when all people are treated identically, without consideration for historical and systemic barriers and privileges.

Equitable enterprise: An organization that works to remove systemic disparities internally and externally to promote equally high outcomes for different groups regardless of their respective privileges.

Inclusion: The actions taken to understand, embrace, and leverage the unique strengths and facets of identity for all individuals so that all feel welcomed, valued, and supported.

PEER: Acronym for Persons Excluded due to Ethnicity or Race, a term used to unite people who have been historically oppressed without insinuating that those individuals are less than or that their sole identity is one of exclusion or oppression (includes people who identify as Black, Latinx, and people indigenous to the United States and its territories). This term shifts the focus to the acts of exclusion and oppression while enabling individuals to disentangle their identity from it, unlike the terms “underrepresented minority (URM)” or “oppressed people.”

Systemic racism: A form of racism expressed in the practice of social and political institutions. It is reflected in disparities regarding wealth, income, employment, housing, health care, political power, education, and the criminal justice system, among other factors. Individual, interpersonal, institutional, and structural racism together form a system, referred to herein as “systemic racism” or “racism.”


Andrew Blau
US Leader – Eminence & Insights
Managing Director | Deloitte Consulting LLP

Joanne Stephane
Human Capital, US Leader –
HR Strategy & Solutions
Human Capital, Chief DEI Officer
Principal | Deloitte Consulting LLP

Janet Foutty
Executive Chair of the Board
Principal | Deloitte US

Kavitha Prabhakar
Chief Diversity, Equity, and Inclusion
Officer – Deloitte US Firms
Principal | Deloitte Consulting LLP


Lauren Lubetsky
Deloitte Consulting LLP

Ale Treviño
Customer & Marketing
Deloitte Consulting LLP

Devon Dickau
Diversity, Equity, and Inclusion
Client Service Practice
Deloitte Consulting LLP

Deshawn Adams
Diversity, Equity, and Inclusion
Client Service Practice
Deloitte Consulting LLP

Raj Tilwa
Strategy & Analytics
Deloitte Consulting LLP

Richard Jucks
Deloitte Consulting Platforms
Deloitte Consulting LLP


  1. US Centers for Disease Control and Prevention (CDC), “Health Equity Considerations and Racial and Ethnic Minority Groups,” July 24, 2020.
  2. Jeffrey M. Jones, “New Low in US See Progress for Black Civil Rights,” Gallup, September 9, 2020,
  3. Richard Edelman, “Systemic Racism: The Existential Challenge for Businesses,” Edelman Research, September 8, 2020,
  4. Interview with John Rice, September 2020.
  5. Fortune/Deloitte CEO Survey No. 3, January 2021.
  6. Interview with Cathy Engelbert, September 2020.
  7. Interview with Dr. Freda Lewis-Hall, September 2020.
  8. Interview with Steven Olikara, September 2020.
  9. US Equal Employment Opportunity Commission, Employer Information Reports (EEO-1 Single and Establishment Reports), 2018.
  10. National Association of Black Journalists (NABJ), “NABJ Statement on Capitalizing Black and Other Racial Identifiers,” June 2020.
  11. Jackson Gruver, “Racial wage gap for men,” Payscale, May 7, 2019.
  12. Brandie Temple and Jasmine Tucker, Equal Pay for Black Women, National Women’s Law Center, July 2017.
  13. National Center for Education Statistics, Projections of Education Statistics to 2025, Forty-fourth Edition, September 2017, accessed January 28, 2021.
  14. Jhacova Williams and Valerie Wilson, “Black workers endure persistent racial disparities in employment outcomes,” Economic Policy Institute, August 27, 2019.
  15. Neighborhoods Organizing for Change (NOC), Take Action MN (TAMN), ISAIAH, and the Center for Popular Democracy (CPD), It’s About Time: The Transit Time Penalty and Its Racial Implications, May 2015.
  16. Diversity VC and RateMyInvestor, Diversity in US Startups, accessed November 2020.
  17. Collab, “About,” 2020.
  18. Kim Parker and Richard Fry, “More than half of US households have some investment in the stock market,” Pew Research, March 25, 2020.
  19. Robert W. Fairlie, The impact of Covid-19 on small business owners, National Bureau of Economic Research (NBER), June 2020.
  20. United States Census Bureau, QuickFacts: United States, July 1, 2019.
  21. Jonathan Vespa, Lauren Medina, and David M. Armstrong, Demographic Turning Points for the United States: Population Projections for 2020 to 2060, United States Census Bureau, March 2018.
  22. Janelle Jones, “The racial wealth gap,” Economic Policy Institute, February 2017.
  23. Nielsen, It’s In The Bag: Black Consumers’ Path to Purchase, Diverse Intelligence series, 2019.
  24. Dominic Madori-Davis, The Action Generation, Business Insider, June 10, 2020.
  25. Sourcing Journal, "What Millennials and Gen Z Think of Your Brand’s CSR Efforts, and What You Can Do About It,” September 3, 2019.
  26. Glassdoor, “What Job Seekers Really Think About Your Diversity and Inclusion Stats,” November 17, 2014.
  27. InsideOut Development, The Ultimate Guide to Generation Z in the Workplace, March 2019.
  28. Vanguard, Investment Stewardship 2020 Annual Report, accessed November 2020.
  29. Dana M Peterson and Catherine L Mann, Closing the Racial Inequality Gaps, Citi Global Perspectives & Solutions, September 2020.
  30. Ani Turner, The Business Case for Racial Equity, W.K. Kellogg Foundation, 2018.
  31. Interview with Valerie Jarrett, September 2020.
  32. Interview with Sally Saba, October 2020.
  33. Interview with Bahja Johnson, October 2020.
  34. Deloitte, “The rise of the social enterprise,” 2018.
  35. Interview with Doug McMillon, October 2020.
  36. Interview with Shelley Stewart, September 2020.
  37. Interview with David Clunie, September 2020.