By Ciara Linnane
JPMorgan Chase & Co. made the biggest racial-equity commitment of any U.S. company in the aftermath of George Floyd’s murder in May of 2020, promising to spend $30 billion over five years to close the wealth gap for communities of color. The bank now says it has made substantial progress — while some critics say it hasn’t gone far enough.
By the end of 2021, the bank /zigman2/quotes/205971034/composite JPM +1.28% had deployed or committed more than $18 billion of that sum, focusing on increasing homeownership, expanding affordable rental housing, supporting minority-owned small businesses, diversifying its supply chain and creating more opportunities for its employees of color, as chief executive Jamie Dimon outlined in his annual letter to shareholders earlier this year.
Dimon was vocal in 2020 in condemning the unfair treatment of people of color in the United States.
“Systemic racism is a tragic part of America’s history,” he said in announcing the $30 billion commitment in October 2020. “We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It’s long past time that society addresses racial inequities in a more tangible, meaningful way.”
JPMorgan’s Black employees accounted for 14% of the overall workforce by the end of 2021 — more than the 13% of the overall U.S. population that Black people represent, and up from 13% of JPMorgan’s workforce at the end of 2020.
Hispanic employees accounted for 20% of the workforce, unchanged from 2020, and Asian employees accounted for 17%, up from 16% a year earlier.
“More women were promoted to the position of managing director and executive director in 2021 than ever before, we doubled the number of employees who self-identified as LGBT+ around the world and launched a differentiated global strategy for neurodiversity within our Office of Disability Inclusion,” the company said in a statement.
Brian Lamb, who until recently was JPMorgan’s global head of diversity, equity and inclusion, said much of the work on the fund has come down to serving communities that historically have been left behind. It starts with addressing factors that are tied to creating more prosperity, improving financial literacy and access to quality education, getting access to capital lending and homeownership, and understanding the needs of local communities, he said.
“That means developing relationships with Black leaders and other partners and ensuring there are branches or outlets where people of color live and work,” Lamb told MarketWatch in an interview.
But critics of JPMorgan have homed in on the bank’s reluctance to agree to a full independent racial-equity audit that would examine the impact the bank’s past practices have had on Black communities and other communities of color.
‘Limited in scope’
At the bank’s 2021 annual shareholder meeting, Dimon dismissed a shareholder question on the issue by saying it would be a complete “waste of time,” insisting that the bank would not pay an outside firm to measure what it already planned to track and disclose.
“We don’t need one [an audit]; we’re not getting any value and it just adds another layer of bureaucratic fluff,” Dimon said at the time.
Dimon has since reversed course, promising an audit later this year that will be limited to the $30 billion commitment. The lengthy battle to change his mind is “baffling,” said Dieter Waizenegger, the executive director of SOC Investment Group, a group that seeks to hold companies and their leaders accountable for corporate behavior.
“Jamie Dimon is out there taking a knee and made this big commitment,” he said, referring to the occasion in June 2020 when Dimon dropped to one knee along with other staffers at a branch in Mt. Kisco, N.Y., emulating the stance taken by some Black athletes to protest racism. “But then when there was this resistance to an independent third party taking a look under the hood, we were really surprised.”