It’s not every day that leaders from government, business and finance come together to advance a shared vision of how to make economic growth more equitable and inclusive. But a group of 60 impact-oriented businesses and investors, including the U.S. Impact Investing Alliance and B Lab, are answering the call with the launch of a coalition committed to working side-by-side with government to amplify and accelerate the equity agenda.
The Coalition on Inclusive Economic Growth was announced at a convening last month, orchestrated by Deputy Secretary of the U.S. Commerce Department Don Graves to identify opportunities for multi-sector collaboration to build an inclusive recovery and shaping an equitable economic system for all.
“We need a whole-of-government approach to truly tackle this equity problem,” said Graves. “But we all know government can’t solve it alone. We need strong public-private partnerships with all of you to scale solutions.”
The first-ever Interagency Convening on Equitable Economic Growth was itself a collaboration between the Biden-Harris Administration, the U.S. Impact Investing Alliance, B Lab, Ford Foundation, Families and Workers Fund and Ariel Investments. More than 150 leaders of government, business, the investment sector, philanthropy and advocacy communities attended in person, and hundreds more participated virtually.
The Coalition and the Interagency Convening were several months in the making, inspired by a broad desire among public and private sector actors to address the economic fallout from the COVID-19 pandemic, reduce the racial wealth gap, and combat climate change. We recognized that neither the federal government nor the private sector can independently channel the financial and intellectual resources necessary to address these crises; the public and private sectors must work together, leveraging each other’s strengths and filling in gaps.
In April, the U.S. Impact Investing Alliance, B Lab and a collection of investor and business organizations issued a public call for the Biden-Harris Administration to create an Initiative on Inclusive Economic Growth to coordinate federal policies that will reshape and rebuild our economy so that it works for all of us. We saw an opportunity to encourage the Biden-Harris Administration to prioritize a set of necessary and long overdue structural reforms to our economy and capital markets, including:
- A shift from shareholder primacy to stakeholder capitalism, including financial market reforms that change the rules and incentives for corporations and investors to ensure they account for their impact on all stakeholders, and not just shareholders; and
- A renewed focus on community investing that builds generational wealth and creates new jobs and opportunities in Black, Brown, Tribal, rural, and otherwise underserved communities.
We are pleased to report that there has been encouraging progress on both fronts. On his first day in office, President Biden signed an Executive Order on “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,” which led to the Justice40 Initiative — a whole-of-government approach that means to ensure at least 40% of federal funds in clean energy and infrastructure are invested in disadvantaged communities.
Also, the $1.2 trillion Infrastructure Investment and Jobs Act, passed in November, included billions of dollars in funding for improving broadband, water systems, roads, bridges and public transportation, among other things, all of which are prerequisite for rebuilding neglected and historically marginalized communities.
With trillions of dollars set to flow to states and localities to support infrastructure and economic development, it was encouraging to hear from a number of government leaders at the Interagency Convening about their work to manifest equitable economic growth. (View the full recording of the event here.)
- “Equity is at the heart of everything we do at the Department of Commerce… Our economy cannot fully recover unless all Americans can fully participate… It’s not just the right thing to do – it’s the right thing to do for our economy. America’s diversity is a competitive advantage – but only if we give everyone an opportunity to fulfill their potential and fully participate.” — Gina Raimondo, Commerce Secretary
- “To reach our shared vision of more equitable growth, we must ensure that capital is flowing to the people and places that need it the most. We need families, business owners and neighborhoods to be able to get loans and equity they need to buy homes, start and scale businesses, and revitalize communities. And we know how extremely difficult this can be for Black, Latino, Native, and Asian families and businesses.” — Janet Yellen, Treasury Secretary
- “The workers and communities who will benefit the most [from investments in U.S. infrastructure] are those who have suffered the most from COVID-19 and inequality.” — Marty Walsh, Labor Secretary
- “As the largest consumer in the world, the Federal government has the power to advance a racial equity agenda by working with more diverse organizations, businesses and contractors.” — Susan Rice, White House Domestic Policy Advisor
- “As finance platforms rely on increasingly sophisticated data analytics, how can we ensure that new developments in analytics don’t instead reinforce societal inequities that may be embedded in the data?” — Gary Gensler, SEC Chair
- “The American entrepreneurial spirit is foundational to our democracy. We must propel our entrepreneurs further so that they can continue to innovate, create the products and services that we depend on and liven our Main Streets and propel our nation to its brightest future.” — Isabel Guzman, SBA Administrator
Alongside the formation of the Coalition on Inclusive Economic Growth, several private sector leaders have shared their efforts towards making equitable and inclusive prosperity a reality, including: a $25 million commitment to good jobs by the Families and Workers Fund; the launch of a new nonprofit, Ownership Works, dedicated to promoting employee ownership and wealth creation; a call to action from State Street for its corporate peers to join them in undergoing a civil rights audit; and one of the largest investments in a public benefit corporation, Novata, a new ESG platform for the private markets.
These are all wins worth celebrating, and we applaud our partners in government and in the private sector for their efforts to date. We now must do the work to transform these words of aspiration into action.
Fran Seegull is president of the U.S. Impact Investing Alliance. Andrew Kassoy is co-founder and CEO of B Lab.