This report was co-authored by Matthew Nestler, Aleksandra Radeva, and Ian Sanders.
Over our years of tracking and incentivizing just business practices at our nation’s largest companies, we’ve seen corporate America take significant strides in one area in particular: disclosing workforce diversity data. This is in part thanks to campaigns by institutional investors and a recent swell of shareholder proposals pushing for demographic disclosure – showing that, even in the midst of rising backlash against ESG and “woke” capitalism, investors consider DEI to be an issue critically material to business.
The public also agrees – in our 2022 survey asking Americans how and whether corporations should focus on these issues, 92% of respondents told us that it is important for companies to promote racial equity in the workplace. What’s more, 76% agree that disclosing demographic data, in particular, is an important step toward advancing racial equity.
JUST Capital has been working to incentivize corporate behavior change on DEI issues overall across a range of initiatives – from documenting progress on a slate of DEI measures in our Corporate Racial Equity Tracker to providing guidance to companies building equitable practices in the CEO Blueprint for Racial Equity, as well as our ongoing financial analyses demonstrating the business case for action on DEI issues. And we’re beginning to see the collective impact of all these efforts.
In this most recent analysis, JUST found that the share of companies publicly disclosing workforce demographic data by race, ethnicity, and gender by standardized job categories in their EEO-1 Report – the gold standard for workforce demographic disclosure – or similar intersectional data has more than tripled between 2021 and 2022, from 11% to 34%. Companies with 100 or more employees are already legally required to submit these reports to the U.S. Equal Opportunity Commission and Department of Labor, meaning that the data has already been collected – just not made publicly available by the majority of companies.
In a companion analysis exploring the business and investor case for increased disclosure, we found that the companies that disclose EEO-1 or similar intersectional data outperform those that don’t by 7.9% over the trailing one-year period ending in 2022.
Our findings are reinforced by other research in this area. Studies from Deloitte, McKinsey, Boston Consulting Group, and many others have shown how diverse workforces and inclusive cultures are more productive, have lower turnover, yield greater customer satisfaction, and ultimately drive higher profitability.
With an increasingly bright light shining on demographic disclosure, we explore our full slate of findings below – including the types of disclosure we’re seeing from Russell 1000 companies, a close look at how different industries measure up, and the changes we’ve seen since we began tracking this data in 2019.
Because companies do not publicly disclose their workforce race and ethnicity data in a single standardized way, since 2019 JUST Capital has collected 23 granular data points around worker racial and ethnic identity. We then use these data points to construct three different categories in addition to no disclosure, in order from least to most detailed: (1) overall people of color, (2) detailed race/ethnicity data, and (3) EEO-1 report or intersectional data.
Though as of September 2022, 28% of the Russell 1000 companies we rank, or 269 companies, do not disclose any race and ethnicity data, nearly three-fourths disclose some form of data. What is more, the percent and number of companies disclosing data increases as the form of disclosure becomes more detailed. Whereas 16%, or 152 companies, provide the lowest level of disclosure (overall people of color – or “non-white” or “minority”) we find that 22%, or 207 companies, disclose more detailed data about specific racial and ethnic categories, such as Black or Latinx. Finally, 34%, or 323 companies, disclose highly disaggregated data, including that contained within the gold standard of the EEO-1 Report.
The majority of companies across almost all industries disclose some form of workforce diversity data. The Utilities industry stands out with the lowest share of companies with no demographic data disclosure, as 92% (36 companies) release some information about the racial and ethnic composition of their workforce. And it is leading all sectors with nearly three quarters of companies disclosing an EEO-1 Report or similar intersectional data. Internet is another industry with nearly 90% disclosure and a very high share of companies (56%) disclosing an EEO-1 Report or similar intersectional data.
Basic Resources and Telecommunications are the only two exceptions where half or more of the companies do not disclose any form of race or ethnicity demographic data. Basic Resources is also the industry with the fewest companies that meet the highest disclosure threshold, as only 8% of companies disclose an EEO-1 Report or Intersectional Data. Interestingly, while the Telecommunications industry is on par with Basic Resources on non-disclosure, it exhibits a different trend when it comes to highly detailed disclosure: 40% of Telecommunications companies are leading by disclosing their EEO-1 Report or similar intersectional data.
While all forms of disclosure can be seen across almost all industries, the disclosure type distribution shows that there is mainly a tendency towards more detailed forms of disclosure (Detailed Race/Ethnicity Data and EEO-1 Report or Intersectional Data) when workforce diversity data is available.
Over the past year, companies across the Russell 1000 have made great strides toward improving disclosure of racial and ethnic workforce demographic data. In September 2021 when we last conducted this analysis, over 45% of companies had no disclosure whatsoever. In September 2022, our latest data shows that number has fallen to just 28%, indicating that over 150 companies have newly published some form of demographic disclosure in the past year. Per our 2023 Ranking of America’s Most JUST Companies, 72%, or almost three-quarters of the companies we rank, now publish some form of race and ethnicity disclosure data.
It is worth noting that the majority of increased race and ethnicity data disclosures can be observed in the most detailed category of EEO-1 or Intersectional Data. This suggests that many companies that have never previously disclosed race and ethnicity data have begun releasing highly detailed demographic data for the first time or that companies with previously less detailed disclosures are adopting the leading practice of disclosing EEO-1-level data.
The most notable shift in race and ethnicity data disclosure has been the unprecedented increase in EEO-1 or Intersectional Data reporting. This highly detailed form of demographic data disclosure, which provides the exact makeup of a company’s workforce by race, ethnicity, and gender by standardized job categories, has become a central tool for measuring race and ethnicity data in the matter of only a few years.
In our latest analysis from September 2022, 323 companies, or 34% of our ranked universe, disclose an EEO-1 Report or similar Intersectional Data. This is triple the value from just a year earlier when 104 companies had this form of disclosure. Even more exceptional, over the span of three years since our first analysis in November of 2019, the number of companies disclosing this most disaggregated demographic data has risen by 31 percentage points, from only 3% to 34%.
Publicly disclosing demographic data represents a critical initial step for companies looking to build more diverse workforces, as well as stronger returns. It holds corporate leaders to account on their DEI goals and signals commitment to advancing racial equity. And while companies have made remarkable progress in this area, there is still a long way to go, with just one-third of America’s largest companies disclosing the most detailed level of race and ethnicity data.
Because large companies are already legally required to submit their EEO-1 Reports to the federal government, the form represents a clear path to public disclosure of intersectional demographic data. Corporate leaders looking to take meaningful steps toward advancing racial equity should publish their companies’ EEO-1 Reports – a form they are already obligated to complete but not publicly disclose. The story the Report tells may not be a perfect one, but disclosure is a crucial first step in holding companies accountable to change.
From there, to ensure lasting progress on DEI, corporate leaders must ultimately go beyond demographic disclosure and measure and disclose the outcomes of their DEI efforts, including whether C-Suite compensation is tied to DEI-related progress, what resources are directed toward DEI efforts, how they drive impact in local communities, and more. By disclosing workforce demographics as a first step on their longer-term journey toward advancing racial equity, companies are poised to better serve not only their workers but their shareholders, too. More equitable, inclusive, and just business is within reach – and JUST Capital will continue to incentivize corporate progress on key issues like demographic disclosure, working to create an economy that truly works for all.
To unpack your company’s DEI performance and gain insights into how to improve on the issues that matter most to the American public, please reach out to email@example.com.
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