Public discourse around the Black Lives Matter protests in 2020 put corporations in the spotlight for their failure to address systemic issues like workplace discrimination and racial inequities.
In response, many corporations came forward with public statements on anti-racism, pledging to fight discrimination and prejudice within and beyond their workforce. As a first step, AirBnB, Uber, TikTok, Amazon, Intel, Netflix, Peloton, and many other companies made donations to anti-racism-focused nonprofit organizations like Equal Justice Initiative and Minnesota Freedom Fund. They also made commitments to pursue anti-racist policies and increase diversity in the workplace.
Research shows that such commitments, if fully realized, would represent a boon for corporations. Diversity—racial, ethnic, ability, gender, and more—is linked to more creative and innovative workplaces. As You Sow’s November 2023 report, “Capturing the Diversity Benefit: Workplace Diversity Linked to Financial Performance” demonstrated that diverse management outperforms all-white management on eight key metrics related to companies’ financial health.
Workplace diversity also increases profit margins. In 2019, the Wall Street Journal found that the top 20 companies with the most diverse employee populations in the S&P 500 index had higher operating profit margins compared to the 20 least diverse companies.
Given both the ethical and financial reasons for companies to pursue greater workplace equity, how have US corporations performed on their diversity commitments?
While some companies have made progress, there is much to still be done. As You Sow’s September 2023 Racial Justice Scorecard evaluated companies on five key areas of their racial-justice efforts:
- publishing a prominent racial justice statement,
- corporate responsibility by the CEO and inclusion of diverse voices within the company,
- acknowledgement of systemic racism (and other key concepts related to racial justice),
- presence of a functioning diversity, equity, and inclusion (DEI) department, and
- collection and disclosure of DEI data.
The scorecard shows that improvements have not been consistent and most companies have provided limited disclosure of the steps they have taken. Across all sectors, As You Sow determined that utility and communications services companies were performing best, while the energy sector performed worst.
Overall, As You Sow found that most corporations studied were not taking an active stance on racial issues, either verbally or in practice. Alphabet, Citigroup, JPMorgan Chase, McDonald’s, and Nucor Corp. received the lowest possible scores for their operations having disproportionately negative effects on BIPOC communities.
Corporations can have outsized impacts on racial justice due to their size and influence. It’s important to pressure companies to adopt clear racial justice commitments, stick to them, and disclose their outcomes transparently.
If you own shares in a company that is lagging on racial justice, voting your proxies is an excellent way to exercise your voice on any racial justice or diversity measures that appear.
If you buy from a company or use their services, your voice as a customer matters as well. Consider contacting companies that need to hear about their customers' concerns about racial justice, and provide them with information about how making a commitment to workplace diversity is not only the right thing to do, but also can have a positive effect on their bottom line. Rally your faith group, school group, or neighborhood to demonstrate collective consumer power with companies that need to improve. Your voice can make a difference!
