The JUST Report: Why Corporate Action on Racial Equity Matters
As my colleague Yusuf George said on CNBC’s Squawk Box yesterday (and wrote alongside Catalina Caro in an editorial), corporations have a critical role to play in advancing racial equity in America today. The question is, who’s doing what, and what exactly does leadership look like?
The first iteration of our Corporate Racial Equity Tracker helps provide some answers. It offers an in-depth accounting of the state of disclosure by the 100 largest employers in our coverage universe, through 22 data points across six specific dimensions of racial equity: (1) Pay Equity, (2) Racial/Ethnic Diversity Data, (3) Education and Training Programs, (4) Response to Mass Incarceration, (5) Community Investments, and (6) Anti-Discrimination Policies.
The good news is that companies are highly likely to disclose baseline DEI commitments – 97%, for example, say they have in place or have committed to implementing a discrimination grievance mechanism. The less good news is that they’re not great at showing progress on actual performance. For instance, only 31% report conducting a pay equity analysis to ensure equitable pay practices along racial and ethnic lines. Closing this accountability gap is a must.
PepsiCo and JPMorgan Chase stand out as the only two that have disclosed all nine of the actions we’re tracking. Apple, Intel, Nordstrom, P&G, and Starbucks also deserve honorable mentions.
Dawn Jones – who was promoted from Acting to Chief Diversity & Inclusion officer at Intel this week – told us that Intel approaches the work the same way they develop product technology. As data comes in, they iterate, and when this happens in public, the accountability pushes them to continually set new goals. Wise words from a consistent high performer in our rankings.
Of course, all of this comes against a backdrop of continuous political and social tumult in the country. Navigating this – for CEOs, for everyone – has become a defining challenge.
For guidance, we offer the following: 70% of Americans want corporate leaders to take a stand on important social issues; 95% of Black Americans and 79% of all Americans want companies to promote racial equity in the workplace; and our best performers on DEI disclosure outperformed the rest by over 3% in 2020.
The role of business in advancing racial equity isn’t about politics. It’s about building a bridge to a better economy and a more just society. That’s why it matters.
This Week in Stakeholder Capitalism
Amazon commits to doubling Black leaders in 2021, increasing their representation to about 8% of senior directors. And in Jeff Bezos’ last shareholder letter as CEO, he weighs in on the Bessemer union vote.
ADP has created a dashboard to help companies analyze the diversity, equity, and inclusion aspects of their business.
Dollar General aims to hire 20,000 new employees as the economy rebounds.
McDonald’s will now require anti-harassment training for its 2 million worldwide employees across 39,000 stores.
Starbucks, Goldman Sachs, and several other organizations have teamed up to create NinetytoZero to combat the racial wealth gap.
Wells Fargo invests in five Minority Depository Institutions (MDIs), as part of its pledge to invest up to $50 million in Black-owned banks.
We invite you to join us on Thursday, May 6 at 1:00PM ET, for our latest briefing call where we will walk through our Corporate Racial Equity Tracker and showcase leading practices from the companies we’ve analyzed. Sign up to join here.
Happening at JUST
As part of our overall racial equity initiative, we’ll be continuing to poll the public on the issues that matter most, and report on key corporate actions not currently captured in the Corporate Racial Equity Tracker. To learn more, watch Yusuf George in conversation with Andrew Ross Sorkin on CNBC SquawkBox and read how the Tracker can help investors to understand companies’ progress on equity commitments in Pensions & Investments.
The Bipartisan Policy Center released the top three takeaways from discussions with JUST and the U.S. Chamber of Commerce debating the role and purpose of corporations.
ThinkAdvisor showcased JUST’s data partnership with Seeds Partners to help investors align their portfolios with their values
“My desire is that companies and everyone focus less on the perfect statement and more on actions that bring everyone together and enable all people to have access.”
- Damon Jones, Chief Communications Officer at P&G, in our latest interview
“We are a part of society as businesses. We employ thousands of people who go out into these communities and their families are impacted by some of the things that are happening. And when your family is impacted, you bring that with you to work and that impacts your ability to perform. So it is all interconnected.”
- Dawn Jones, Chief Diversity and Inclusion Officer at Intel, to JUST Capital
“It is the collective responsibility of business and government leaders to stand up and address centuries of structural racism. Our words and actions matter more now than ever.”
- Brian Lamb, Global Head of Diversity and Inclusion at JPMorgan Chase, to JUST Capital
Must-Reads of the Week
The New York Times broke the news that Amazon, BlackRock, Google, Warren Buffett, and hundreds of other companies and executives signed a new statement opposing “any discriminatory legislation” that would make it harder for people to vote. CNBC’s Squawk Box discussion around the action is worth watching.
According to The New York Times, more than 300 businesses – including Google, McDonalds,and Walmart – are pushing the Biden administration to nearly double the United States’ target for cuts to emissions ahead of an April 22 summit on climate change.
On the other end of the spectrum, Bloomberg is reporting that the Business Roundtable is beginning a major ad blitz to discourage the Biden administration from raising corporate taxes.
Despite the pandemic, The Wall Street Journal reports that CEO pay surged in 2020.
Institutional Investor pens an interesting article on why large pension funds can actually encourage bad corporate behavior because of their investment patterns.
Chart of the Week
Our latest Chart of the Week highlights this piece from the Financial Times on the enormous surge of capital into ESG funds over the last year, and what it means for regulation.