Lab CEO Jesse Griffiths explains why a commitment to racial justice is central to building a financial system that serves people and planet.
The Black Lives Matter movement has put racism and racial justice at the top of the political agenda, where it belongs. It has forced us all to reflect seriously on what we are doing in our organisations and our personal lives to contribute to this struggle. The Lab is in the middle of a strategic review, which gives us an opportunity to decide how to embed our commitment to anti-oppression and racial justice into our strategy, our organisational culture, and across all our work. What does this mean for an organisation committed to transforming the financial system for people and planet?
It means deepening our understanding of the very real differences in economic outcomes for different groups in society, which help determine who the financial system caters for. Money drives the current financial system, so inequalities of income and wealth between groups shape who the system will favour. The Office of National Statistics finds that 21% of white British households are in the top fifth of income compared to only 10% of black British households. The same inequality is true at the other end of the economic spectrum, where only 18% of white British households find themselves in the bottom fifth of income, compared to 46% of Pakistani-British households. The pay gap is particularly large in London, the centre of the UK finance industry, where people from BAME backgrounds earn 22% less than white employees, on average. At the other end of the scale, poverty rates and unemployment are higher, and debt problems larger for people of colour, on average. This year, a Runnymede Trust report laid bare the racial disparities in wealth in the UK, where white British households have, on average, almost ten times the wealth – savings and assets – of black African British and Bangladeshi British households. Home ownership levels for white people are double those of black people in the UK. The coronavirus crisis is making this situation worse, with BME people more likely to have lost income as a result of the pandemic than white people. These economic inequalities can also perpetuate biases that exist more broadly in our social and judicial institutions, and contribute to other problems including mental and physical health outcomes, levels of civic participation and social mobility.
A commitment to racial justice means understanding how the financial system plays a major role in producing these unequal economic outcomes, and how it directly contributes to racial injustice. The inequalities of income and wealth help explain why people of colour find it harder to access basic financial services such as credit, insurance and banking. But this is also caused by racism within the system. For example, even after controlling for factors such as income and wealth, white households are less likely to be excluded from consumer credit than other households. Black victims of fraud are more than twice as likely to be denied a refund by their bank as white customers. It is also a result of racial discrimination within the finance sector, which makes it harder for people of colour to succeed. For example, less than 1% of investment managers are black despite making up 3% of the UK population and 13% in London, where much of the investment industry is based.
A commitment to anti-oppression means embedding racial justice into how we think about financial systems change. In other words, it starts by recognising that unless we explicitly focus on racial justice, we are likely to ignore the presence of racial bias and assumptions in our own thinking, and we will miss critical understanding of the system itself, for example by ignoring the history that shaped the system and the deep embedding of white privilege that results. For example, the Legacies of British Slave-ownership project documents the extent to which existing patterns of wealth in the UK are tied to the legacy of the slave trade, as are Britain’s biggest banks. We will also miss crucial opportunities for change. In other words, financial systems change is vital for racial justice, and racial justice is crucial for financial systems change.
Finally, this commitment means reflecting deeply on how we need to change ourselves, as individuals and as an organisation. We can’t pretend to have the answers to these deeply embedded problems, and we know that the Lab is far from perfect. Effective systems change relies on diversity and an inclusive approach to interacting with colleagues, partners and participants. In working for a more democratic, fair and responsible financial system, we are committed to modelling these values in all that we do. This isn’t a new concern for us. For example, a commitment to diversity was core to our board recruitment process in early 2019, successfully bringing on 10 new trustees with different backgrounds and different perspectives. Work on our internal policies and processes – and also on how we can be more vocal in this area, in a meaningful way – is ongoing. We’ll share more on this in future. I am also aware, as a beneficiary of white privilege – and other privileges including male privilege – of how I am likely to be blind to these issues, how I need to listen and lift up others and make a conscious effort to learn, think and act differently.
That is why embedding our commitment to anti-oppression and racial justice into our strategy and how we implement it is a welcome challenge that we will work on, within the Lab and in our broader community, with renewed focus.
If you have questions or comments on this blog, or would like to discuss the Lab’s commitment to embedding racial justice in our work, please contact us.