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Sustainability Perspectives

Episode 2: Black Womenomics - Addressing social and economic racial inequalities

In this episode, host Keesa Schreane is joined by Gizelle George Joseph, Global Chief Operating Officer of the Global Investment Research Division at Goldman Sachs, where she works closely with divisional leadership on the management of global investment research, as well as the development and execution of key strategic initiatives. Gizelle has played a leading role in publishing research that addresses social and economic racial inequalities.  Keesa and Gizelle discuss how the tragic death of George Floyd awakened the whole world on what needs to be done to effect change, including how Goldman Sachs set up an infrastructure to change the course of racial inequality in the US including their Market Madness HBCU Possibilities program.

Host: Keesa Schreane

Guests: Gizelle George-Joseph, MD& COO for Global Investment Research, Goldman Sachs

  • Keesa: [00:00:10] Welcome to the Refinitiv Sustainability Perspectives podcast, I'm Keesa Schreane, Gizelle George Joseph is Global Chief Operating Officer of the Global Investment Research (GIR) Division at Goldman Sachs. Now in this role, she works closely with divisional leadership on the management of global investment research, as well as the development and execution of key strategic initiatives. Gizelle has played a leading role in publishing research that addresses social and economic racial inequalities, and we'll get to that in a second. Gizelle, it is so great to have you with us.

    Gizelle: [00:00:46] It's so great to be with you, Keesa.

    Keesa: [00:00:38] Now, let's kick off by talking about some of this in-depth research that you've been involved in, Top of Mind, Black Womenomics. You know, you mentioned that your company had previous work around gender and social mobility, but that racial equality hadn't really been a part of the equation, and then you describe this tremendous moment during the horrendous news of George Floyd in 2020 and how that just created an opportunity. Tell us about that.

    Gizelle: [00:01:16] George Floyd, like a lot of these moments we have in American history, really opens people's eyes up to the reality I think of racial equality in this country. And so, we had that moment back, you know the George Floyd incident happened completely tragic moment. But you have these moments of, I think, awakening where the whole world, not just the U.S., goes, what do we need to do to effect change? And I think for us as Goldman Sachs, we had this moment where our CEO thought we don't want to be what I say jokingly is diversity tourists, right? Like people who make big commitments but don't really follow through. So, we sort of paused and said, what could we really do to make a difference in this moment and for a long time to come, right? Not just making an announcement in this moment but setting up infrastructure that could actually change the course of racial inequality in this country. And so, we started writing research because that's the platform that we have available to us, and on the back of that research, we've done a lot of initiatives at Goldman that we'll talk about throughout the podcast.

    Keesa: [00:02:25] So, in terms of the research, what does success look like? What do you have top of mind for you all to be able to meet in terms of performance indicators, in terms of getting messages out there? What does success look like?

    Gizelle: [00:02:39] We get this question a lot. Look, I think ultimately the goal is to help close the racial wealth gap, right, when we look at what that wealth gap actually is, we're talking about 90% wealth gap. That's the top-line number, right, that black Americans experience a wealth gap that's 90% in this country, and we can deep dive a little bit into what makes that wealth gap so extensive and some of the considerations there. But I think what we're trying to do as a firm and as an institution is ultimately help close that wealth gap, and while that's a structural issue, meaning that we need to make changes really at the systemic level, it's also at the individual level. And I love telling this story and I feel I'm being repetitive because I think I see this at least twice a week. But there's a parable of the starfish on the beach, right, where the old man is walking on the beach littered with starfish, and then he meets a little boy throwing a starfish into the ocean one by one, he tells the little boy that he's not going to be able to make much of a difference, given there are tens of thousands of starfish on the beach, and as he throws one starfish into the beach, the little boy looks at the old man, and he says, I think it makes a difference to that one. And that's how I think we're thinking about impact. It's not just the structural long-term change that we're trying to make, which of course, is real and we're very focused on. But it's also how do we change the lives of individual people in this country, especially for us black women?

    Keesa: [00:04:05] That's amazing, and from there, let's talk about Black Womenomics. I think that's a great way to segway. Tell us about that specific piece of research and why it's so important for Goldman Sachs.

    Gizelle: [00:04:16] I think that research and advocacy are just so critical in the journey toward racial economic equality. So being able, especially as a black woman, to be part of this platform and to be able to use our platform to elevate awareness and to offer really actions to help mobilise change, that's been really important for us. So Black Womenomics, so that again came on the back of George Floyd. We had written one piece called Top of Mind: Investing in Racial Economic Inequality, and on the back of that wrote Black Womenomics. The first one really focused on all the different economic disadvantages that black women faced, and then this recent one really focused on business ownership. I'll state a couple quick facts that I think really helped bring home, why black women? why the focus there? Health stat; black women have three to four times the pregnancy related mortality rate than white women in this country. We're talking about 2022 and that number actually hasn't gotten better. It's actually gotten increasingly worse, which is really sort of mind-blowing. We're talking about black women's lives here, right? And so, three to four times the pregnancy-related mortality rate is a number that we need to focus on. In education, we're in 2022 again and 70% of black students attend a school where the majority of students are non-white. We're talking segregated schools in 2022, and that's six decades after Brown vs. the Board of Education, and that's really important because a lot of primary and secondary schools that black students attend tend to be less well funded. And then the third point, I'll say, which I haven't used that fact in a long time, but I think it was one of the pieces of data point that really sort of blew my mind. And we leverage that actually from research done by our head of research and chief economist Jan Hatzius, but pretty impactful. The fact that infants of all races showed be exact same cognitive ability, but black children in the US start to fall behind around aged two, and that's because of uneven opportunities, and that gap only continues to grow over time. So, if we needed any confirmation, we all start at the same exact place. But the playing field isn't level. It doesn't stay level and economic equality and racial social equality, that's something that does not happen naturally in this country and something we need to continue to focus on.

    Keesa: [00:06:38] So, Gizelle, let's talk about milestones and benchmarks that you use to measure the success of your work.

    Gizelle: [00:06:44] So, we like naming our programs at Goldman with the goal post, so as you talked about before, we've done research on Womenomics for many, many years and on the back of that we created 10,000 women, 10,000 small businesses, and then with this program that's on the back of Black Womenomics research, we have a very real number of black women, so one million. A set amount of capital that we want to invest so $10 billion of investment in the next 10 years. So, a set number of years and then a $100million in philanthropic capital. So hopefully, that is the marker that we can get way beyond that, but that is the marker, and I think that's really important, setting benchmarks that are very clear, timelines that are very clear in being able to actually make and mobilise change.

    Keesa: [00:07:35] And that's great, and I think it could be a model for other firms who are looking to do the same.

    Gizelle: [00:07:39] Exactly, exactly.

    Keesa: [00:08:17] This brings us to something that you and I talked about before, and it was the emotion that can be tied to data, and you shared this incredible story that was called out that emotions are tied to data and how you deal with that when you're looking to create this narrative and create this story. Share that with us, when we say emotions being tied to data, what does that mean and how are you able to construct a story with that in mind?

    Gizelle: [00:08:45] It's such a great point because I mean, obviously this kind of research, especially for me, it hits close to home and you have to try to compartmentalise when you write research. It's why I try not to say we when I'm talking about it and I say black women and they, almost as if it's separate from me, but it's not, and the stats sort of get to you. So, the story that you're referencing when we did the first draft and I brought it to my boss, Jan Hatzius, who heads the research division, he read through it and came back to me and said, this is too emotional, like start from scratch again. And that is a really critical point and a really, really critical part of how we actually conduct research at Goldman Sachs. So, in my COO role, we and together with divisional leadership, we tell all people constantly that producing analytically rigorous research in a timely manner is literally what we do. And we set that standard for the research that we do with inclusive group research as well. So, we ground the research both in existing academic research and then use data from very well-known sources. For example, we will use the Annual Business Survey, we'll use the Federal Reserve Bank data, we'll use Current Population Survey, microdata from the Census Bureau, etc. and then what we do internally is that we employ a peer review process where our own economists, including, as I mentioned, our chief economist who's very involved in the research process, can then challenge us and advise to ensure that the work is representative of the intellectually robust research that we produce as a division.

    Keesa: [00:10:23] And in terms of the work that you produce as division and as a company, I have to point out the work that you're doing with historically black colleges and universities, and I'd love to talk about that, as well as just what that means for mentorship and sponsorship overall and your own personal experience with having, you know, tremendous mentors and sponsors that helped you to get to where you are. Can you talk about how that plays hand in hand, bringing in new recruits and also the role of mentorship to really make sure that they can progress in their careers?

    Gizelle: [00:10:53] So I am so happy that our firm, and a lot of firms have really focused on HBCUs in the past couple of years, especially post George Floyd. But, you know, a few years ago, I won't say which CEO across Wall Street said that getting black talent was difficult. And I think for a lot of us on Wall Street, we sort of paused and went, there are a hundred HBCUs, and granted, not all of them have business programs, but there are a 100 HBCUs across the US that graduate thousands and thousands of black young people every single year. And so how is there not a pipeline coming through, right? But it's also how do you take that pipeline and how do you mentor and sponsor that pipeline literally into the doors of Wall Street? And so, a couple of years ago, we started this new program at Goldman called Market Madness HBCU Possibilities, and as somebody who went to an HBCU, again, something very, very dear to my heart and I've been very involved in the program, but we basically bring 125 students from 12 HBCUs around the US, and we've committed to investing $25 million over the next five years. And that's really important because again, having not just one moment in time, but having a long-term plan for how you're going to develop that pipeline is very, very important. And so, we bring these students in. We spend weeks teaching them about Goldman Sachs, exposing them to our different programs, interview skills, resume workshops, communication skills, basic excel skills, presentation skills. Like all of the things that I will tell you, for somebody who went to an HBCU that was underfunded, I did not get the opportunity to do, and so having the students come in, be able to get to know the firm and get to know how Wall Street works, get to know the basics of actually applying for a job, then positions them to be able to interview, not just at Goldman Sachs. Of course, we want as many of the pipeline as possible, but also for other parts of Wall Street as well. And then just to go to your question about personal mentorship. That is so important. Like, I’ve been at Goldman for 17 years. I would not honestly have been here as long without the mentorship and the sponsorship of really, and by the way, an incredible amount of people, not just black senior people. Of course, that's been really important, but across the board, white, black, Chinese, Hispanic, more senior than me, more junior than me, like the sponsorship and the support of the community is just so incredibly important. When, you know, again, coming from a small island in the Caribbean,  going to a school in the south with 5000 people literally have no idea what Goldman Sachs was before I, you know, the year before I applied for an internship, which I did not get. You know, that whole process for me has been has been really important and having really great people around me to tell you when to do or not to do when to lift your head up and not to lift your head up, when to stop saying something that you're saying very loudly, like all those things actually matter in helping you sustain a career over time. And that's really critical, not just again, a moment in time, but sustenance and sustainability over time.

    Keesa: [00:13:59] Fantastic, and you know, really, we talk about mentorship and sponsorship and the great work that we do to bring in new talent, but the end goal for some of us, the end goal is to work in corporates. But for others, the end goal is to be an entrepreneur to go out and bring new innovation, and I think that there's some important work that's being done around understanding the rate at which some people's entrepreneurship endeavours succeed in terms of growing, becoming revenue generating and the rate at which others, quite frankly, don't have that success. Could you share with us some clear realities around where we actually are if we look at entrepreneurship today?

    Gizelle: [00:14:41] So one of the reasons we wanted to deep dive into black women owning businesses, and what that looks like is because a lot of people don't know this, but black women start businesses at one of the highest rates in the US. But then when you actually look at the numbers, black women make up 6% of the US population, but they only own 2% of employer businesses, and that balance or that imbalance is really stuck when you look at single black women. So almost in every part of the data, you talk about black women and then you look at single black women, and the reality is almost always more stark looking at single black women. But the single black women own less than 1% of American employer businesses, it's 0.5%, and that rate is 24X lower than for single white men. I like just sort of sitting with that kind of data for a second, right? 24X lower than single white men, and this is again important because business ownership has a very large impact on economic progress. And why do we see such a great divide and a great gap there again? Credit market challenges. Black women tend to have lower levels of wealth. There are a lot of liquidity constraints, and all of that helped create really a lot of barriers for entry into black women-owned businesses. And once black women are able to own businesses, you have on top of that sort of financial knowledge gaps and structural discrimination that compound those issues. So, it's not an easy thing, I think, for a lot of black women to start a business for all the reasons that I know it, but even harder, you find sustaining a business over time. And then one thing I'll say on the on the financial knowledge gaps, it's interesting because I was talking to a friend, I'm part of the Aspen Institute Finance Fellows program. I was talking to a friend there who said, well, I feel like we're getting better at the financial literacy gaps, right? And actually, when you look at financial knowledge, Black Americans overall, but particularly black women, tend to lag in the ability to just know some basics around financial knowledge. And so, one of the ways at Goldman that we're actually targeting that we just launched a new program called Black in Business, where we're asking black women business owners to apply to this program and we’ll spend a few weeks just sort of walking them through the basics of owning a business. And for a lot of black women who are obviously trying hard to better their positions in lives and to create economic mobility for themselves, having that access, I think, is really important because financial knowledge is frequently, I think, understated just how important that part of owning a business is.

    Keesa: [00:17:18] Well, I mean, best said their financial knowledge, understanding how to implement it, that's where the power lies, starting from very early into college, regressing into early career with mentorship, sponsorship, as well as being able to access capital for entrepreneurship. Thank you so much. Great information, Gizelle George Joseph, thank you so much for joining us.

    Gizelle: [00:17:40] Thank you so much. It was such a pleasure to be with you.

    Keesa: [00:17:44] We invite you to subscribe to the Refinitiv Sustainability Perspectives podcast on Apple, Spotify or wherever you stream your content. What did you think about the podcast? Leave us a review on Apple or follow us on LinkedIn and Twitter for updates on our show. Thank you for joining! See you next time!