Home Fashion Industry Financial Investors want proof that companies are making headway on diversity – Footwear News

Investors want proof that companies are making headway on diversity – Footwear News


Around the same time last year, companies were making big promises about diversity and inclusion in their workplaces. Amid a rising tide of support for Black Lives Matter protesters, many announced initiatives to recruit and retain more employees of color, donated millions to racial justice organizations, and pledged to diversify. their management teams.

Today, more and more, their stakeholders want to know if they are keeping their commitments.

According to a report from proxy advisor Alliance Advisors, shareholder proposals related to diversity and equality quadrupled between 2020 and 2021. In most cases, these proposals have focused on transparency, calling on companies to publish their data on the workforce and disclose the recruitment, promotion and retention rates of various employees.

As You Sow, a shareholder advocacy group, urged companies like Nike, TJX Companies and American Express to share quantitative data on their diversity, equity and inclusion (DCI) efforts, and secured majority support at several recent investor meetings. The organization maintains that it is only with clear and comparable measures that the effectiveness of these programs can be measured.

Plus, in terms of basic demographics, at least, companies already have this data: the U.S. Equal Employment Opportunity Commission requires companies with more than 100 employees to report annually on the race, ethnicity and gender of employees in various job categories. EEO-1 forms, as they’re called, are confidential, but about 46% of the 100 largest companies in the S&P 500 by market cap publish them voluntarily, according to As You Sow.

Last July, New York City Comptroller Scott Stringer launched a campaign on behalf of several city pension funds asking some of the nation’s largest companies, including Walmart, Target, Amazon and Nike, to publicly disclose their EEO-1 data.

“We call on companies that have issued statements in support of racial justice to walk down the path and publicly disclose the demographics of their employees by race, gender and ethnicity – including in their leadership and senior management,” Controller Stringer said in a statement. “This information is crucial for shareholders to better understand diversity and workforce practices and identify areas for growth.”

Without that kind of transparency, a company is likely to believe it is using diversity as a marketing ploy, said Meredith Benton, director of the consultancy firm Whistle Stop Capital and head of the workplace equity program for As You Sow. .

“This is one of the few places where I can say that there is actually a very simple answer: an open and transparent conversation with real data. You open your house, you draw the curtains, you open the doors, you say, ‘come in’, ”she said. “I don’t think anyone expects perfection. It’s impossible. It’s too complex. It’s too closely tied to broader societal challenges.

Yet some companies remain closed or have so far only shared partial information. The retail community, in particular, has been reluctant to release data, Benton said, adding that the gaps between the low-paying workforce and white-collar executives often paint a less than flattering picture.

“Their numbers tend to look terrible. They tend to have a lot of diversity in the front line and very limited diversity in their executive suite. And so that contrast tends to be really stark, ”she said.

At Amazon last year, for example, Black and Latinx employees made up 31% and 26.4%, respectively, of the company’s customer and field support team in the United States, which includes employees of the United States. ‘warehouse. At the senior management level, however, these shares fell to 3.8% and 3.9%, with white employees accounting for 70.7% of the roles.

Nike, for its part, released five years of diversity data in its 2020 Impact Report, showing a 5.16 percentage point increase in the share of racial and ethnic minorities in its overall workforce during this period. and a 13.38 percentage point increase at the Vice President level. Based on that disclosure, Nike asked regulators to block As You Sow’s proposal ahead of its September investor meeting. He also said he would release his EEO-1 data for 2021, although he did not specify when and that he “does not use the [data] to measure progress or think it is appropriate to do so. (Nike did not respond to a request for comment.)

As You Sow argues that Nike’s current reporting is insufficient because its formatting does not compare the data with that of other companies, and because Nike has refused to share promotion and retention rates of its employees by race. and ethnicity.

Elsewhere in the industry, disclosure is patchy: Tapestry and VF Corp. report partial data. Under Armor, like Nike, shares the racial and ethnic breakdown of employees by job level, but does not offer promotion or retention rates, while Gap has promised more data and a dedicated report on equality and membership in 2021. This week, Ralph Lauren released a 64-page report on global citizenship and sustainability for 2021 outlining its EEO-1 data and diversity goals, including that at least 20% of its global management team belong to under-represented racial and ethnic groups by 2023.

Adidas, which faced significant criticism from black employees last year, said in September it was “exceeding” the diversity and inclusion goals set last June, which include representation of 20% to 23% of Black and LatinX employees in corporate roles in the United States, and 12% in leadership roles by 2025.

As brands continue to join the social justice conversation, Benton said she will be watching to see how their actions live up to their words.

“Investors should be wary of a company that builds its brand on issues of justice and cannot show that its own house is in order, or at least organizing itself,” she said. .