By Levi Sumagaysay
Shareholder advocacy groups that have long pushed for social change are asking social media companies, banking giants and other corporations that declared their commitment to racial justice in 2020 to back their words with actions this year.
Many U.S. companies stated solidarity with the Black Lives Matter movement last year: two-thirds of S&P 500 /zigman2/quotes/210599714/realtime SPX +0.36% companies made supportive statements after the death of George Floyd, a Black man, at the hands of a Minnesota police officer last May led to widespread protests, while 36% made financial contributions to racial justice organizations and 14% actually stated “Black Lives Matter,” according to As You Sow, a California-based group that promotes environmental and social corporate responsibility.
A lot of those same companies have suggested their shareholders vote against resolutions that sought to improve Black lives in recent years, though. Natasha Lamb, managing director of Massachusetts-based shareholder advocacy group Arjuna Capital, recalled that Amazon.com Inc. AMZN suggested shareholders reject proposals last spring seeking greater disclosure of racial and gender pay gaps. But after Floyd’s death and the police killing of Breonna Taylor in Kentucky, Amazon splashed “Black Lives Matter” on its home page and donated $10 million to the NAACP and other groups.
“After those [resolutions] went to a vote, George Floyd was killed, all these companies started putting out statements of solidarity,” Lamb said. “All we could do was look at those statements and say, ‘You just had these proposals that you opposed.'”
Lamb and other advocates for using shareholders’ voting power to push for change are hoping enhanced awareness of these issues will lead companies and their investors to approve resolutions this year that call for racial-equity audits, disclosure of additional pay-gap information and more.
“Companies put black squares [to indicate support for the Black Lives Matter movement] on their websites, so now it’s time to show us,” said Dieter Waizenegger, executive director of CtW Investment Group, an investment management firm in Washington, D.C.
But it remains to be seen whether the racial reckoning that began last year will actually lead to broader corporate and shareholder support. Arjuna is bringing back the same resolution at Amazon and other companies that previously rejected it, including Intel Corp. /zigman2/quotes/203649727/composite INTC -0.42%
While the companies already disclose some pay information, Arjuna is asking them to report unadjusted median pay-gap data, which it believes can paint a fuller picture of pay inequity at companies.
“The median gap gets at ‘are you moving people up the ladder, are you closing these structural gaps,'” Lamb said.
Intel said it has no comment on this year’s proxy, while an Amazon spokeswoman said, “We believe that people should receive equal pay for equal work, regardless of gender, race or ethnicity.”
Amazon, which last year held its shareholder meeting in May, is already fighting such proposals before it even releases its proxy, however, and using its “Black Lives Matter” response as a reason. One of the proposals — which pushes for a civil rights, equity, diversity and inclusion audit and is led by the New York State Common Retirement Fund — mentions the company’s firing last year of Chris Smalls, a Black worker who led a walkout over COVID-19 safety concerns and who was described by the company’s general counsel as “ not smart or articulate ,” as well as the disproportionate number of Black and Latino workers who are “paid low wages and exposed to dangerous working conditions.”
Amazon has challenged the resolution, saying in a letter to the Securities and Exchange Commission in January: “The Company’s commitment to diversity, equity, and inclusion is reflected in a number of its policies and position statements.” In the letter, the company also pointed to its donations to racial justice organizations.
Dozens of resolutions have been filed
The Interfaith Center on Corporate Responsibility, or ICCR, comprises more than 300 member organizations that have so far filed 244 shareholder resolutions this year. Of those, 64 are related to racial justice and diversity, a 50% increase from last year and the highest number ever for such proposals for the investor coalition, according to its resolutions and voting guide for this proxy season, which will begin in the spring.
“Given the confluence of current crises that highlight persistent and systemic racism and racial inequity, shareholders are increasingly bringing a racial justice lens to their corporate engagements,” ICCR Chief Executive Josh Zinner told MarketWatch.