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How Americas’ 5 LARGEST BANKS took performative stances on Black Lives Matter and Racial Equity.

It is our belief that true accountability cannot ever be achieved if is it not assessed from the individual and independent perspective of those whom it intends to account for it. During last summer, the beginning of a reinvigorated national and arguably global reckoning with racial inequality occurred. Two-thirds of the S&P 500 companies made supportive statements after the death of George Floyd which sparked this reinvigorated spirit; following suit 36% of those companies made financial contributions to racial justice organizations and 14% actually stated Black Lives Matter, according to As You Sow, as California based group that promotes environmental and social corporate responsibility.

Over the last year the conversation surrounding race has become less like stepping on eggshells (saying things like the minority, people of color, or urban) and more of a mainstream fad that the most progressive allies have joined in on; including, a handful of major U.S. corporations. The 36% of companies who quickly made financial contributions to racial justice and the 14% who said Black Lives Matter weighed the options and determined, with a clear understanding of the current social climate coupled with power and disposition of Black or African American people, that those position statements, initiatives, and contributions were in their best professional interests.

According to the Market Watch articles entitles “Citigroup, Wells Fargo, Bank of America, Goldman Sachs urge shareholders to vote against racial equity audits”, & “Companies declared Black Lives Matter last year and now they’re being asked to prove it”, 244 shareholder resolutions have been filed this year by the Interfaith Center on Corporate Responsibility, or ICCR which comprises of 300 member organizations, of those 64 were related to social justice or diversity. Shareholder advocacy groups are calling for major corporations, banking leaders, and social media giants to seriously commit to what they have said and push for reoccurring proofs of progress. Contained within the same articles; Intel, Amazon, Facebook, Abode, Google, Twitter, Starbucks, Mastercard, Citigroup, Wells Fargo, Goldman Sachs, Bank of America, JP Morgan Chase & Co, and Morgan Stanley have received some form of shareholder proposal advocating for racial equity audits, focusing diversity and inclusive initiatives, and greater commitments to social corporate responsibility. It was reported in the Market Watch articles “Companies declared Black Lives Matter last year and now they’re being asked to prove it”, that Citigroup, Starbucks, and Mastercard all made promises to disclose pay gap information after pressure from shareholder advocacy group Arjuna Capital. But, Citigroup, Wells Fargo, Bank of America, and Goldman have all responded to these proposals saying that they are already doing enough to address these issues and are urging shareholders to vote against these resolutions.

My question for these firms collectively starts with how that could be true if you’ve only begun to address these claims as of last summer and it hasn’t even been a full year from the first financial contribution or the first issued public statement of support. Moreover, the steps taken by these corporations are viewed as broad, and simple. They lack serious commitment and for all intents and purposes are entirely performative measures. A one-time payout or payoff to one organization is not a major step towards addressing 400 years of systemic racism for some 40 million Black Americans. It especially does nothing if these corporations refuse transparency and accountability in the progress of these initiatives and contributions.

Pushing shareholders to vote against racial equity audits means that not only do these firms seek to intentionally hinder transparent accountability it is being done under the premise of attempting to hide the potentially grave inequities that exist within their organizations. It also shows no intention or moral consciousness to fix these issues; if that were present these firms would welcome audits as well as seek out real ways to counteract their adverse effects on society. Our belief is there are specific firms that not only understand the necessity for social responsibility but are serious in their commitment to stand by their position statements no matter what it takes. These firms will take necessary steps (like Black Certification) that are aimed at true accountability, non-performative action, and building consumer trust.

Every dollar pledged to a racial activist organization, or racial equity initiative from a company or corporation that also refuses to back up its commitment with an independently managed racial equity audit can only be perceived as an insincere and otherwise performative gesture. That is far from “doing enough”. Goldman Sachs cited, aside from boasting its financial contributions, that they have committed to hiring more analysts from HBCUs. But what will this mean? How many analysts will be hired and from what schools, how are they recruited, at what rate are analysts promoted to associates and managers and so on as compared to their counterparts, will they be placed in already diverse atmospheres, will the retention rate of these analysts be tracked, will the pay and bonuses of these analysts be on par with their counterparts, will these analysts be overly represented in one area, division, or location? This initiative at face value appears progressive but upon further analysis, most of these initiatives always fail to either be pushed, realized, accounted for, or fail in one of the areas of questions mentioned before. This initiative, if managed the right way, would otherwise be an acceptable step towards better relationships with Black and African American communities because of its accountability and proof of progress.

The need for an independent evaluation of a firm’s real and tangible commitment to corporate social responsibility is necessary and obvious. Market Watch reported that in Amazon’s response to their shareholders’ proposal they stated “The Company’s commitment to diversity, equity, and inclusion is reflected in a number of its policies and position statements.”, while also pointing out its financial contributions.

Nonetheless, the purpose of an audit is trust, where an internal assessment cannot necessarily provide the proper objective oversight while also being thorough in their review we rely on external audits. It is an objective examination to determine if the policies an organization says it abides by are upheld within the organization. All of the major banks mentioned before would never open, let alone consider, certain perspectives and proposals without the therefore mentioned proposals being audited by a 3rd party of the firms choosing. This is simply doing their due diligence.

Our belief is sooner than later, at the same rate corporations have been giving away money, Black and African Americans will follow the overall business trend of direct-to-consumer business through expanding e-commerce necessities, and they will be increasingly shopping as care consumers because of this heightened social atmosphere. Inevitably this will lead consumers away from major corporations who refuse to showcase consumer support or social responsibility and more towards Black-owned brands and businesses who explicitly and unapologetically support Black culture and Black lives. Black or African Americans especially millennials and gen z have adopted the same sense of due diligence a bank would exercise when choosing whom to do business with and where to spend their money. Companies have to evolve their practices because consumers are evolving theirs. 

In closing, we want to highlight millennials first, as they are reaching peaking spending power, and generation Z who will follow them both as a broad category. According to Forbes articles entitled, Understanding the research on millennial shopping behaviors, “60% of millennials tend to gravitate toward purchases that are an expression of their personality — the brand must speak to them at this level and make them feel good.” Before last summer the biggest thing millennials as a whole generation push for was going green. They advocated for corporations to adopt policies to reduce their carbon footprint and reduce carbon emissions. The corporate response was new green initiatives, commitments to corporate environmental responsibility. Now, the advocacy for social corporate responsibility is arguably just as important as the push for environmental responsibility. Additionally, Gen Z is the most diverse generation there has ever been and generation alpha (anyone born after 2010) will beat that record again becoming even more diverse. Generation Zs commitment to social causes rivals every generation before since the 60s. This reinvigorated social atmosphere is not going anywhere because of its widespread nature, mainstream focus, and dedicated young members of society. Systemic racism is no longer something that will enhance business or organizations’ profits, but it is only going to dampen, reduce, or completely bankrupt shareholder’s value.

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