(Alison Wright/Getty Images)
Polling this week from our partner The Harris Poll shows Americans are bracing for an economic downturn, pessimistic about their short-term financial future and planning to reduce spending. Judging by the flurry of layoffs, hiring freezes, and other cuts, many corporate leaders feel the same way.
In such times, it becomes more important, not less, for companies to consider the plight of their stakeholders. Take corporate philanthropy for example. Giving USA’s annual report on charitable giving shows corporate giving was up nearly 24% last year, but actually fell in relation to earnings which rose 37%.
Investing in local communities, especially those that need it the most, is one area where the private sector can have a huge positive impact during a downturn. The top three companies in the Communities stakeholder of our overall Rankings are Bank of America (which says it hasdeployed $450m of its $1.25 billion commitment to address racial and economic inequality in communities across the country), PepsiCo, and Alphabet. When it comes to giving back to communities, Salesforce is #1. Other honorable mentions from recent work include Cigna’s $3 million commitment to support mental health wellbeing in schools over three years, JPMorgan’s reported $18 billion deployed or committed to community-oriented racial equity initiatives, and PayPal’s work with the Southern Communities Initiative.
Yet as my colleague Ashley Marchand Orme noted in her MarketWatch editorial this week, there are still some key areas for improvement. Only 9% of the largest 100 U.S. employers in our Corporate Racial Equity Tracker disclose a local supplier/small business spend amount and nearly half (49%) provide no data points at all related to community investment.
If a recession does come, how companies provide support for communities across America will be an important benchmark of justness. We will be monitoring it.
This Week in Stakeholder Capitalism
AMC shareholders voted against the CEO’s compensation plan.
Apple workers at a Maryland store have become the first employees to unionize.
Amazon faces a diminishing hiring pool for its warehouses according to a leaked memo.
Meta (finally) agrees to end discriminatory practices in its housing ads.
Microsoft plans to eliminate face analysis tools in its push for more responsible A.I.
What’s Happening at JUST
Our latest analysis of corporate action on racial equity explores how companies are investing in their communities. Findings from our 2022 Corporate Racial Equity Tracker show companies are more likely to leverage diverse supplier spend, over local supplier spend and local schools funding, to invest in their communities. In a companion piece, we took a look at how companies with some of the largest big-dollar pledges to advance racial equity in communities across the country are reporting their progress to date.
Ashley Marchand Orme penned an editorial for MarketWatch taking a deeper look at how companies have measured up to their racial equity commitments from two years ago, and what progress still needs to be made. Insights from our 2022 Corporate Racial Equity Tracker were also featured in Triple Pundit.
Martin joined Adena Friedman, CEO of Nasdaq, and Chip Bergh, CEO of Levi Strauss, for the 100th episode of Fortune’s Leadership Now podcast to talk about how business has (or hasn’t) adopted stakeholder capitalism since his last appearance on the show back in April 2020.
Insider shares how companies can prepare for the expected overturning of Roe v. Wade, speaking with Martin and utilizing some of our polling data.
On June 13th, we held our “Moving the Needle: Tracking Corporate Progress on Racial Equity” event, featuring insights from top investors, CEOs, and nonprofit leaders. If you weren’t able to attend or missed any part of the event, watch the video replay here.
We also published our public comments in support of the SEC’s climate disclosure standards, and VettaFi took a closer look at the JUST ETF and why the fund is an interesting choice for investors focused on stakeholder capitalism at a time when there are “more questions than answers regarding exactly what defines ESG.”
(Good Jobs Summit)
“There really are higher revenues associated with investing in good jobs. On the one side we see it from the cost savings, but on the other side it is associated with better operational practices that let customers have a better experience because the workers are having a better experience.”
- Kavya Vaghul, our senior director of research, speaking at the Good Jobs Summiton just a few of the economic benefits of investing in good jobs.
“This divergence is just getting more and more dramatic…When I started talking about it, one reporter would call me about the wages of the workers, and then a second reporter would call me about CEO pay. And that’s troubling. There is a sort of ‘one thing has nothing to do with each other’ idea – and that’s an easy way to feel in the C-suite.”
- JUST board member Abigail Disney talking with Fortune about fixing the troubling disconnect between CEO pay and workers’ wages.
“At Target, our commitment to supporting Black-owned companies and advocating for racial equity touches every aspect of our business – including investing in underrepresented entrepreneurs, launching Black-owned brands at Target, working with Black designers and suppliers and increasing visibility through our marketing.”
- Christina Hennington, Target executive vice president and chief growth officer, discussing progress on their $2 billion commitment to supporting Black businesses, featured in our latest racial equity investments article.
Must-Reads of the Week
Harvard Business Review unpacks why employers should stop using the “business case” for diversity as the main frame in corporate America.
Deloitte publishes inaugural LGBT+ Inclusion @ Work Survey showcasing leading practices and barriers. A new study by HRC Foundation reveals the wage gap between full-time LGBTQ+ workers and their peers.
The New York Times reports that companies across the U.S. are bracing for supply chain disruptions as a law aimed at eliminating forced Chinese labor takes effect.
The Wall Street Journal highlights the CEOs taking home record high pay packages despite missing major financial targets.
The Wall Street Journal investigates how the world of philanthropy is responding to potential changes in how billionaire Warren Buffet’s wealth will be distributed to charity after his death.
Chart of the Week
This chart comes from our latest Corporate Racial Equity Tracker analysis, investigating the community investment dimension. The data shows that across three data points, few companies disclose funding local education or local supplier spend compared to investing in diverse suppliers.
Get to Know JUST
President and CEO, National Urban League
JUST Capital Board Member
Marc Morial is the President and CEO of the National Urban League, a historic civil rights organization dedicated to economic empowerment for historically underserved urban communities. Marc also served as Mayor of New Orleans from 1994 to 2002.
Marc recently joined The Gallup Podcast, where he shared how younger generations fuel his hope for achieving racial equity in the U.S. He said, “Without hope, we have nothing. But what truly gives me hope is young people. I saw young people of all backgrounds, races, colors and creeds take to the streets during the George Floyd uprising. I’ve seen young people voice that they want institutions and companies that they either work for or who are the beneficiaries of their spending to reflect the values that they reflect. I see once again an opportunity for an emerging generation to change the country. It’s what gives me hope.”