How are you going to respond when you heard that a coworker say something racist, homophobic, ableist, or otherwise inappropriate?

Here you can use this story as your answer or your own if you have done something like this in the past.
In my previous organization, I heard a new joiner makes an insensitive remark. Since he was new to our company and the environment is new to him, I calmly handled the situation and asked him not to use this kind of language in the future with the appropriate reason why it is not good to use this language and this kind of words may hurt other’s feelings. So after all this, the new joiner apologizes and accepted his mistake and till now I haven’t heard anything about it.
But in case I got to know that the person is again using inappropriate language, I will escalate this to my manager and bring the whole scenario to his attention.