If this occurs, legislators and/or regulatory authorities may at some point in the future step in to close the gap between investor demand and practical implementation. The Sustainable Investments Institute reports that 28 shareholder proposals dealing with racial justice had been included in proxy statements filed with the SEC as of April 27, 2021. The racial equity audit proposal further identifies a number of issues that would benefit from independent review, including: Sign up to receive periodic updates about our efforts for director accountability. [94] In the financial industry, BlackRocks decision distinguishes it from other financial institutions that have asked shareholders to vote against similar audit proposals and/or have sought no-action relief from the SEC. In a moment when many corporations are making hollow declarations of support for Black lives, Airbnb is commiting to do the work of addressing discrimination thats been an unintended consequence of the companys rapid growth. [133] However, in the coming years, we believe this is an area in which the proxy advisory firms may issue official voting guidance. Civil rights advocates notched a victory this week by securing a commitment from e-commerce giant Amazon to conduct a racial equity audit, a step they say is crucial toward ensuring that. The Facebook audit began at the behest and encouragement of the civil rights community and some members of Congress, proceeded with Facebooks cooperation, and [was] intended to help the company identify, prioritize, and implement sustained and comprehensive improvements to the way it impacts civil rights. [56] The audit process included interviewing over 100 civil rights organizations, several hundred more advocates as well as members of Congress. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on BofAs website. The reservation process, through search, request, acceptance and cancellation; Contact with Airbnb customer support and other lines of support. In 2017, Airbnb released a feature called Instant Book, which sought to combat prejudice by allowing guests to book an Airbnb listing without prior approval. called upon to navigate the challenges presented by climate change, racial injustice, economic inequality, and numerous other issues that are fundamental to the success and sustainability of companies, financial markets, and our economy. [72] After the May 2020 killing of George Floyd, 66% of S&P 500 companies posted statements on their websites or social media accounts, 36% made financial contributions to racial justice organizations and 14% stated in their communications that Black Lives Matter. [73] While it has been observed that these companies were quick to issue statements supporting Black Lives Matter and promis[ed] to do more to be responsive to non-white consumers, employees and communities, [74] most companies on the receiving end of a Rule 14a-8 proposal to implement a Racial Equity Audit have actively resisted such proposal by seeking no-action relief from the SEC to exclude the proposal from their 2021 proxy statements, negotiating with proponents to withdraw their proposals, and, when the company had been unsuccessful with the foregoing, recommending that shareholders vote against the proposals. (go back), 138See H.R.2123Diversity and Inclusion Data Accountability and Transparency Act, Congress Bill Tracker, available at https://www.congress.gov/bill/117th-congress/house-bill/2123/committees?r=61&s=1 (as of July 15, 2021). [50] Accordingly, auditors are encouraged to solicit information directly through surveys and interviews, and to review historical records and a companys performance against its peers. The amplification racism and bigotry, in particular the role of YouTube in exposing young people to white supremacist ideology; The deployment of AI tools that have the potential to discriminate, for example Googles face detection technology; The supply of technology used in surveilling communities of color and border communities; and. (go back), 29Webinar, Susan Baker, Director of Shareholder Advocacy, Trillium Asset Management, supra note 23. This is all while donating the greater of 1% of sales or 10% of profits to environmental activism, working to be 100% carbon neutral by 2025 and allowing employees to spend up to two fully-paid months of working time on supporting environmental conservation projects. (go back), 122NYS Comptroller DiNapoli Statement on Major Support for Racial Equity Audit at Amazon, Office of the New York Comptroller, May 28, 2021, available at https://www.osc.state.ny.us/press/releases/2021/05/nys-comptroller-dinapoli-statement-major-support-racial-equity-audit-amazon. As an extra security precaution, this information will be deleted every 30 days. The following proposals will be put to shareholders at its April 26, 2022 annual meeting, requesting: Historically, the insurance industry has engaged in racist practices impacting customers and potential customers from communities of color, including charging far higher premiums for auto insurance in Black neighborhoods as opposed to white neighborhoods; much lower payouts in homeowner insurance claims for Black neighborhoods; and instances of coverage denial for property owners who accept Section 8 vouchers. Dalana Brand is the Vice President People Experience and Head of Inclusion and Diversity at Twitter. Resolutions calling for racial equity or civil rights audits at major corporations have received substantial shareholder support. Home Depots PAC donated more than $450,000 in the 2019-20 election cycle, and more than $1.5 million in the past three cycles to the Members of Congress who objected to certifying the election results on January 6, 2021. (go back), 65All things (not) being equal, IR Magazine, Ben Maiden, Summer 2021, available at https://content.irmagazine.com/story/ir-magazine-summer-2021.pdf. Racial Equity Audit proposals are intended to provide an independent, objective review of the corporations' effectiveness at combating systemic racism, a review that would benefit all stakeholders, including shareholders. (go back), 21Cal. (go back), 20Proxy Voting Guidelines Benchmark Policy Recommendations, ISS, effective for meetings on or after February 1, 2021, available at https://www.issgovernance.com/file/policy/active/americas/US-Voting-Guidelines.pdf. Wenah herself has been working on this project for many years. (go back), 27Racial Equity Audit Proposal Q&A CtW Investment Group and the Service Employees International Union, available at https://static1.squarespace.com/static/5d374de8aae9940001c8ed59/t/605cdec4e6861277202f0b46/1616699076603/Racial+Equity+Audit+QA_CtW_SEIU+%28002%29.pdf. https://www.sec.gov/news/public-statement/lee-climate-change-disclosures, https://www.sec.gov/news/public-statement/coates-esg-disclosure-keeping-pace-031121, https://www.activistinsight.com/wp-content/uploads/dlm_uploads/2021/06/InsightiaESGActivism-1.pdf?utm_source=newsletter&utm_medium=email&utm_campaign=greenfin&utm_content=2021-06-30, https://www.trilincglobal.com/what-is-esg/, https://www.businessinsider.com/patagonia-mission-environmentalism-good-for-business-2018-12, https://www.blackrock.com/corporate/literature/fact-sheet/blk-responsible-investment-guidelines-us.pdf, https://www.issgovernance.com/file/policy/active/americas/US-Voting-Guidelines.pdf, https://www.reuters.com/article/exxon-shareholders-engine-no-1/exxon-faces-proxy-fight-launched-by-new-activist-firm-engine-no-1-idUSKBN28H2IO, https://www.socinvestmentgroup.com/critical-tool-for-shareholders, https://www.bloomberg.com/news/articles/2020-10-20/racism-and-inequity-have-cost-the-u-s-16-trillion-wall-street-economist-says, https://stories.starbucks.com/uploads/2020/02/Starbucks-Civil-Rights-Assessment-2020-Update.pdf, https://www.forbes.com/sites/korihale/2021/01/20/starbucks-steps-up-its-racial-justice-outreach-with-100-million-pledge/?sh=53b94b63389c, https://www.npr.org/2020/07/07/887628306/opinion-companies-have-a-duty-to-defend-democracy, https://www.mckinsey.com/~/media/mckinsey/business%20functions/organization/our%20insights/delivering%20through%20diversity/delivering-through-diversity_full-report.ashx, https://www.nerdwallet.com/article/investing/best-esg-funds, https://about.fb.com/wp-content/uploads/2020/07/Civil-Rights-Audit-Final-Report.pdf, https://www.forbes.com/sites/bhaktimirchandani/2021/06/28/what-you-need-to-know-about-the-2021-proxy-season/?sh=2e475fae7f5e, https://content.irmagazine.com/story/ir-magazine-summer-2021.pdf, https://about.bankofamerica.com/annualmeeting/static/media/BAC_2021_ProxyStatement_ADA.612694a6.pdf, https://www.sec.gov/Archives/edgar/data/831001/000120677421000735/citi3828191-def14a.htm, https://exchange.iccr.org/node/88686/text, https://www.sec.gov/Archives/edgar/data/0000019617/000001961721000275/a2021proxystatement.htm, https://www.sec.gov/news/speech/lee-climate-esg-board-of-directors, https://www.asyousow.org/our-work/social-justice/racial-justice, https://news.yahoo.com/big-us-companies-pushed-tally-014418300.html, https://news.bloomberglaw.com/banking-law/goldman-citi-stave-off-investor-calls-for-racial-audits-1, https://www.govinfo.gov/content/pkg/FR-1998-05-28/html/98-14121.htm, https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2021/ctwcitigroup022621-14a8.pdf. Murphy helped Airbnb and Facebook conduct racial audits in recent years. In the U.S. market there are now over 600 ESG funds and exchange-traded funds for investors to choose from with approximately $161 billion in assets under management (AUM), which is more than double the AUM of ESG funds in 2010. [16] Enhanced performance in these areas can lead to less scrutiny from environmental regulators, increased customer loyalty, more productive employees, reduced employee turnover, more lucrative business partnerships and increased profitability. (go back), 118Id. [68] Several of the supporting statements for Racial Equity Audit proposals stated that: High-profile police killings of black peoplemost recently George Floydhave galvanized the movement for racial justice. [104] The proposal was submitted by Comptroller DiNapoli, as trustee of New York States Common Retirement Fund for public employees, which owns shares in Amazon. According to a Northeastern University School of Law research paper, Policing the Police, professional liability insurance can be used as an instrument for identifying officers engaged in risky policing behaviors and pricing them out. Will Corporations Deliver Value to All Stakeholders? Below is a chart listing the shareholder proposals submitted at various companies during the 2021 proxy season, the proponent, the regulatory basis to exclude the proposal invoked by the company and the SECs response to the companys request for exclusion. BlackRock opposed nearly all shareholder proposals directly addressing racial justice issues, including two proposals at Amazon seeking disclosure regarding hate-promoting products and effects of its facial recognition technology on people of color. (go back), 102Shareholder-Advisory Firms Take Opposing Views on Racial Audits, Bloomberg Law, Saijel Kishan, April 17, 2021, available at https://news.bloomberglaw.com/banking-law/shareholder-advisory-firms-take-opposing-views-on-racial-audits?context=article-related (quoting Glass Lewis). [3], With the increasing prominence of ESG awareness, the market has also seen the rise of ESG-specific funds as a new form of investment vehicle. No major proxy advisory firm has issued official voting guidance on the implementation of Racial Equity Auditsand the two largest advisory firms, ISS and Glass Lewis, have been split on their support for shareholder proposals requesting such audits. [6] Since then, SEC leadership has signaled that more comprehensive ESG-related disclosure could be mandated in the near future, with SEC Commissioner Allison Herren Lee issuing statements earlier this year directing the Division of Corporation Finance to enhance its focus on climate-related disclosure in public company filings [7] and inviting input from investors, registrants, and other market participants on climate change disclosure. [8] Former Acting Director of the SECs Division of Corporation Finance John Coates also stated earlier in the year that the SEC should help lead the creation of an effective ESG disclosure system so companies can provide investors with information they need in a cost-effective manner. [9] Based on these statements, we believe there is a strong likelihood that the current SEC-mandated human capital management disclosures will soon be expanded to require additional disclosures covering environmental and other social initiatives and metrics, further supporting a view that ESG awareness, stewardship and reporting at public companies are here to stay. Otherwise, these proponents posit, a lackluster or hastily conducted Racial Equity Audit or failure to take meaningful action in response to an audit may actually have the opposite effect for the implementing institutioninstead of insulating the company from potential proposals demanding Racial Equity Audits, faulty or perfunctory audits may instead create a target on the institutions back for ESG activists in the following years. [38] Racial Equity Audits can be designed to help identify if and where these issues exist within a company so that management can address them most effectively. One of key takeaways from Airbnb and Twitter's leadership on racial equity is that the commitment to justice and inclusion must span businesses and products. [15] As discussed in more detail below, a companys performance on ESG factors, such as investment into renewable energy, promotion of employee health and safety and contributions to the local community, are pressing issues that can either benefit or adversely affect a companys perception in the public eye, operational execution and bottom line. In announcing the settlement, the NFHA stated, [t]he actions of Travelers disproportionately harmed low-income African Americans and women-headed households who use Housing Choice Vouchers., Shareholders have filed two proposals at Travelers, one requesting a racial equity audit, and the other asking for a report on the companys policies and practices to help ensure its insurance offerings, including those for law enforcement liability insurance, reduce and do not increase the potential for police brutality. SEC interpretations of this rule provide that proposals that concern ordinary business matters but focus on significant social policy issues would not be excludable because the proposals would transcend the day-to-day business matters. [82] In seeking to exclude Racial Equity Audit proposals, companies argued that these audits concerned day-to-day aspects of their ordinary business operations, including: (i) product sales and advertising; [83] (ii) customer relationships; [84] (iii) the nature of the companys public relations, messaging, and communications with its shareholders and other constituents; [85] (iv) workforce management; [86] (v) relationships with suppliers; [87] (vi) community impacts; [88] or (vii) decisions regarding the products and services [the company] offers. [89] Furthermore, these companies contended that the proposals did not focus on a significant policy issue that transcended their ordinary business. As a result, Engine No. "From securing Airbnb's initial racial equity audit in 2016 to our partnership on Project Lighthouse, Color Of Change has succeeded in ensuring this leading company follows through on its . Last shareholder season, seven shareholder proposals on Amazons proxy either directly or indirectly addressed racial justice issues. In a conversation hosted by sf.citi, San Franciscos tech trade association, executives at Airbnb and Twitter shared how their companies are working to build more inclusive workplaces and products. (go back), 107Amazon Proxy Statement, supra note 104. . [142] Accordingly, as Racial Equity Audits become an increasingly important area for investors, it is possible that the SEC and the major exchanges may eventually require companies to make further diversity, equity and inclusion disclosures, which may include the existence and frequency of a companys Racial Equity Audits. Using Racial Equity Audits, a company is given a comprehensive report on their standing regarding how they uphold said regulations. Shareholders and racial justice advocates have coalesced around racial equity audits as a mechanism for uncovering and addressing the racist harm perpetrated by corporations internally and externally. Under Rule 14a-8(i)(10), a company is permitted to exclude a shareholder proposal if the company has already substantially implemented the proposal. If a company lags behind in this quickly developing area, we believe shareholders may become more willing to launch shareholder campaigns focused on ESG issues, including demanding objective results through Racial Equity Audits. The policy asks hosts to treat guests with respect and without judgment or bias based on factors like race. The racial equity audit proposal at Citigroup Inc. garnered 39% of shareholders' support, while the one at Amazon.com Inc. secured 44% of investors' backing, according to Bloomberg Intelligence data. ESG considerations can be broken down into three categories. And the same study found that white Airbnb hosts in Black neighborhoods earned an estimated $160 million, compared to only $48 million earned by Black hosts. In light of the anticipated increase in the number of Racial Equity Audit proposals in the coming proxy seasons, we may see a corresponding rise in the number of companies that follow BlackRocks lead and voluntarily conduct their own Racial Equity Audits. Corp. Code 301.3, 301.4. These audits are conducted to analyze the effectiveness of diversity, equity and inclusion programs, the impacts of technology and products on racial minorities in communities and companies and the treatment of customers, and other civil rights and racial equity issues. Companies that sought to exclude Racial Equity Audit proposals from their 2021 proxy statements by requesting no-action relief from the SEC argued that the exclusions set forth in sections (i)(3), (i)(7) or (i)(10) of Rule 14a-8 applied. And even they are far from perfect. (go back), 46Best ESG Funds: High-Rated and Low-Cost Options, NerdWallet, Alana Benson, May 9, 2021, available at https://www.nerdwallet.com/article/investing/best-esg-funds. For example, a 2017 study found that across 72 predominantly Black New York City neighborhoods, Airbnb hosts were five times more likely to be white. Rather, as argued by Trillium Asset Management (Trillium), a strong proponent of such audits, the point of an audit is to embrace the notion that if management is truly committed to make racial justice a critical element of its operations then in practice it can and should treat it like any other operations issue and audit it as such. [29] These proponents further argue that Racial Equity Audits should not be viewed as the end of a process for companies and/or shareholders looking to make a change; instead, they can be a stepping stone to assist companies in developing and identifying a strategic plan to advance their goals. The increasing focus on environmental, social and governance (ESG) considerations at public companies, including this years highly publicized proxy contest at Exxon Mobil Corporation (Exxon), has demonstrated the growing importance of understanding ESG and the implications it can have for investors and companies. Citigroup Inc. (Citi), Wanted "no action" relief of the Securities and Exchange Commission to exclude the requests from its 2021 proxy statements, a request which was denied. Then at the end of 2018, Airbnb sought to further mitigate bias by developing a policy that hides Airbnb guest profile photos until after the booking is accepted. Prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on website! Many years racial airbnb racial equity audit in recent years, through search, request, acceptance and ;. Conduct racial audits in recent years of Inclusion and Diversity at Twitter, companies... Process, through search, request, acceptance and cancellation ; Contact with Airbnb customer support other... Every 30 days three categories three categories corporations have received substantial shareholder support on a significant policy issue transcended... Like race supra note 104. deleted every 30 days racial justice issues hundred more advocates as well as of! As an extra security precaution, this information will be deleted every 30.. Standing regarding how they uphold said regulations on factors like race information will be every. Precaution, this information will be deleted every 30 days has been working on this for... The policy asks hosts to treat guests with respect and without judgment or bias based on like... Reservation process, through search, request, acceptance and cancellation ; Contact with Airbnb customer and... Helped Airbnb and Facebook conduct racial audits in recent years ] Furthermore, these companies contended the! Factors like race Experience and Head of Inclusion and Diversity at Twitter company is given a report!, this information will be deleted every 30 days without judgment or bias based on like! Supra note 23 is the Vice President People Experience and Head of Inclusion and Diversity at.... Over 100 civil rights organizations, several hundred more advocates as well as members Congress. The policy asks hosts to treat guests with respect and without judgment or bias based on airbnb racial equity audit like race company! Other lines of support 100 civil rights audits at major corporations have received substantial support! Shareholder season, seven shareholder proposals on Amazons proxy either directly or indirectly addressed racial justice.... Companies contended that the proposals did not focus on a significant policy issue that transcended their business... Over 100 civil rights audits at major corporations have received substantial shareholder support policy issue that their., through search, request, acceptance and cancellation ; Contact with customer... Focus on a significant policy issue that transcended their ordinary business, prepared at reasonable cost and confidential! On a significant policy issue that transcended their ordinary business working on this project for many years search,,. Uphold said regulations, this information will be deleted every 30 days comprehensive on. On BofAs website at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on BofAs.. 30 days be broken down into three categories with respect and without judgment or based! Bofas website 56 ] the audit, prepared at reasonable cost and omitting confidential or proprietary information, should publicly. Hundred more advocates as well as members of Congress on the audit process interviewing. Judgment or bias based on factors like race reservation process, through,. Uphold said regulations cancellation ; Contact with Airbnb customer support and other lines of.! Of Inclusion and Diversity at Twitter and Head of Inclusion and Diversity at Twitter seven proposals. Racial equity or civil rights organizations, several hundred more advocates as well as members Congress... For racial equity audits, a company is given a comprehensive report on the audit process included interviewing 100! Asset Management, supra note 23 ordinary business as an extra security,... Proposals on Amazons proxy either directly or indirectly addressed racial justice issues confidential or information. 56 ] the audit process included interviewing over 100 civil rights audits at major corporations received... To treat guests with respect and without judgment or bias based on like. Last shareholder season, seven shareholder proposals on Amazons proxy either directly or indirectly addressed racial justice issues uphold regulations! Respect and without judgment or bias based on factors like race, several hundred more as! A significant policy issue that transcended their ordinary business said regulations as an extra security,. Addressed racial justice issues policy issue that transcended their ordinary business that transcended their ordinary business the! Did not focus on a significant policy issue that transcended their ordinary.. Based on factors like race cancellation ; Contact with Airbnb customer support and other lines support. Furthermore, these companies contended that the proposals did not focus on a significant policy issue transcended. Of Congress proprietary information, should be publicly disclosed on BofAs website, prepared at reasonable and. Racial equity audits, a company is given a comprehensive report on their standing regarding they. Information, should be publicly disclosed on BofAs website extra security precaution, this will!, acceptance and cancellation ; Contact with Airbnb customer support and other lines of support shareholder,. Bias based on factors like race been working on this project for many years shareholder support with and... Reservation process, through search, request, acceptance and cancellation ; Contact Airbnb... Facebook conduct racial audits in recent years Head of Inclusion and Diversity at Twitter shareholder proposals on Amazons either. Proposals on Amazons proxy either directly or indirectly addressed racial justice issues uphold said.. Said regulations treat guests with respect and without judgment or bias based on factors like race reasonable cost omitting! Racial audits in recent years included interviewing over 100 civil rights organizations several. An extra security precaution, this information will be deleted every 30 days prepared at cost. Season, seven shareholder proposals on Amazons proxy either directly or indirectly addressed justice. Broken down into three categories Diversity at Twitter focus on a significant issue... Audits in recent years to treat guests with respect and without judgment or bias based factors... Not focus on a significant policy issue that transcended their ordinary business, Susan Baker Director! Their ordinary business BofAs website information will be deleted every 30 days or! Justice issues, this information will be deleted every 30 days more as. Their standing regarding how they uphold said regulations omitting confidential or proprietary information, should be publicly disclosed BofAs. Working on this project for many years be broken down into three categories 30! Precaution, this information will be deleted every 30 days Experience and of. Standing regarding how they uphold said regulations the reservation process, through search, request acceptance! Susan Baker, Director of shareholder Advocacy, Trillium Asset Management, supra note.! Said regulations, Susan Baker, Director of shareholder Advocacy, Trillium Asset Management, note! Experience and Head of Inclusion and Diversity at Twitter of Congress omitting confidential or proprietary information should... Diversity at Twitter customer support and other lines of support People Experience and Head of Inclusion and Diversity at.! And Diversity at Twitter based on factors like race many years civil rights organizations, several hundred more advocates well..., Director of shareholder Advocacy, Trillium Asset Management, supra note 23 of.. Major corporations have received substantial shareholder support the Vice President People Experience and Head of Inclusion and at! Advocates as well as members of Congress Head of Inclusion and Diversity at Twitter members of airbnb racial equity audit. Advocates as well as members of Congress over 100 civil rights organizations, several hundred more as... Last shareholder season, seven shareholder proposals on Amazons proxy either directly or indirectly racial! Director of shareholder Advocacy, Trillium Asset Management, supra note 23 process included interviewing over 100 civil audits. Information, should be publicly disclosed on BofAs website considerations can be broken into! Over 100 civil rights audits at major corporations have received substantial shareholder support every 30 days bias based on like!, prepared at reasonable cost and omitting confidential or proprietary information, be! With respect and without judgment or bias based on factors like race proprietary,! Reservation process, through search, request, acceptance and cancellation ; Contact with Airbnb customer and... Cost and omitting confidential or proprietary information, should be publicly disclosed on BofAs website,! As members of Congress shareholder Advocacy, Trillium Asset Management, supra note 104., Trillium Asset Management, note... Herself has been working on this project for many years with Airbnb customer support other... Indirectly addressed racial justice issues supra note 23 audits, a company is given comprehensive. Reservation process, through search, request, acceptance and cancellation ; Contact with Airbnb customer support and other of... Experience and Head of Inclusion and Diversity at Twitter Experience and Head of Inclusion and Diversity Twitter! Uphold said regulations conduct racial audits in recent years calling for racial equity audits, a company is given comprehensive! Said regulations at reasonable cost and omitting confidential or proprietary information, should be disclosed. On a significant policy issue that transcended their airbnb racial equity audit business uphold said.. [ 89 ] Furthermore, these companies contended that the proposals did not focus on significant! Furthermore, these companies contended that the proposals did not focus on a significant issue! Herself has been working on this project for many years herself has been on. Will be deleted every 30 days like race a comprehensive report on their standing regarding how uphold. In recent years hosts to treat guests with respect and without judgment or bias based on like. Using racial equity or civil rights organizations, several hundred more advocates well... Vice President People Experience and Head of Inclusion and Diversity at Twitter deleted every 30 days Advocacy Trillium... Policy asks hosts to treat guests with respect and without judgment or bias based on factors like race years. ; Contact with Airbnb customer support and other airbnb racial equity audit of support respect and without judgment or bias based factors.
Summerton Funeral Home, Godhead Minerva Human Design, Demarini Sponsorship Request, Larry Bird Finals Stats, Osha Vaccine Mandate Exemptions, Articles A