2023 366 Technology. We saw this occur in California with Senate Bill 826 and Assembly Bill 979 discussed in further detail above. In August 2021, a National Labor Relations Board hearing officers report on a union election there found that the company committed multiple violations of employees rights. (go back), 78Rule 14a-8 No-Action Letter re: Stockholder Proposal to Citigroup Inc. from CtW Investments Group, Citigroup Inc., December 23, 2020, available at https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2021/ctwcitigroup022621-14a8.pdf [hereinafter Citigroup No-Action Letter]; Rule 14a-8 No Action Letter re: Johnson & Johnson2021 Annual Meeting, Omission of Shareholder Proposal of Christopher and Anne Ellinger and co-filers, Skadden, Arps, Slate, Meagher & Flom LLP, December 16, 2020, available at https://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2021/ellingeretaljohnson021221-14a8.pdf [hereinafter J&J No-Action Letter]. According to Wenah, Airbnb lost 1.3 million users after launching the Community Commitment. Silicon Valley has a long way to go to constructively engage with civil rights groups by proactively, not reactively, seeking out our expertise to build platforms that serve Black people instead of harming us. A National Labor Relations Board complaint alleged that the company enforced its dress code selectively and disparately against workers that displayed the slogan and engaged in other related protected concerted activities.. (go back), 74Big US companies pushed to tally progress on racial justice, Yahoo! Not only are Racial Equity Audits designed to help inform investors about their current and future investments from a social and financial perspective, but are also intended to help companies craft their policies and practices to achieve their social justice goals. 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. [23] In the aftermath of the killing of George Floyd in May 2020 and the subsequent civil rights movement and unrest, many companies announced a number of initiatives and measures to address social justice issues, including committing financial resources and reviewing their own policies and practices. However, not all companies have been as eager and willing to comply with these requests. AI could help you next time. (go back), 113See Webinar, Thomas DiNapoli, New York State Comptroller, supra note 23. (go back), 17Supra note 5; see also What Is ESG? 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. And lastly, whether a company has sufficient mechanisms in place to monitor effectiveness. Id. Just like its environmental and corporate governance counterparts, addressing social concerns can be equally important to companies and investors alike as this can translate into, among other things, value additive results. [141]. [132] However, as Racial Equity Audits become more commonplace and enter the cultural norm, these proposals may begin to resonate with more stakeholders and be approved by shareholders as early as the next proxy season. According to CtW, this focus is based on the belief that: the finance industry has played a critical role in perpetuating unequal wealth distribution to communities of color. [11], ESG considerations are becoming increasingly relevant to shareholder activists. CEO Charles Scharf took the helm of the bank in 2019 and implemented changes to management, including bringing on other white men he had worked with previously to high-level positions within Wells Fargo. [1] Secondsocial criteria, which considers how a company engages with all of its stakeholders (including employees, customers and suppliers) rather than just shareholders, including the treatment and diversity of its employees on the frontline, management and boardroom levels, the effects of a company on the surrounding community, and whether a company is working with suppliers who share similar socially desirable values. Civil rights. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on BofAs website. By staying in the project, users will be helping to create a new benchmark to uncover, measure, and fight discrimination on Airbnb. (go back), 85See Amazon No-Action Letter, supra note 83. 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. ; see also Human Rights, Amazon, available at https://sustainability.aboutamazon.com/people/human-rights?workerCount=true&engagementProgram=true&productCategory=true. (go back), 98Wells Fargo & Company, Notice of Annual Meeting and Proxy Statement, Schedule 14A, filed with the SEC on March 16, 2021, available at https://www.sec.gov/Archives/edgar/data/72971/000119312521082907/d71313ddef14a.htm [hereinafter Wells Fargo Proxy Statement]. Second, whether any changes to existing programs or new measures or initiatives, would help a company become more equitable and inclusive. Related research from the Program on Corporate Governance includesThe Illusory Promise of Stakeholder Governance(discussed on the Forumhere) andWill Corporations Deliver Value to All Stakeholders?, both by Lucian A. Bebchuk and Roberto Tallarita;For Whom Corporate Leaders Bargainby Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita (discussed on the Forumhere); andRestoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American EconomyA Reply to Professor Rockby Leo E. Strine, Jr. (discussed on the Forumhere). Given current trends in ESG, public companies should stay informed on Racial Equity Audits and their adoption, crafting and implementation. 16, 1992)). (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). The following proposals will be put to shareholders at its May 19, 2022 annual meeting: The following proposals will be put to shareholders at its June 1, 2022 annual meeting: Alphabet, the parent company of Google and YouTube, faces nine shareholder proposals this year on issues relating to diversity, racism, lobbying activity, and platform use problems facing the company. These companies have asserted that they disagree with the approach of Racial Equity Audit proposals, but are aligned with [their] stated goal of addressing racial inequity in the financial sector. [96], For example, the board of directors of Citi recommended a vote against the Racial Equity Audit proposal included in its 2021 proxy statement, noting that [a]s recently as September 2020, Citi released a 104 page report on the economic cost of Black inequality in the United States titled Closing the Racial Inequality Gaps, and said its efforts on these issues are available to the public. Firstenvironmental criteria, which considers a companys actions as a steward of the environment, such as what steps a company is taking to address the depletion of the planets resources, pollution and greenhouse gas emissions, or the effects of climate change. For more information on the study please see Edelman, Benjamin, Michael Luca, and Dan Svirsky. In addition to Starbucks, Airbnb and Facebook have completed audits. As a result, Engine No. In September 2019, Airbnb released a Three-Year Review of its Work to Fight Discrimination and Build Inclusion in an effort to maintain transparency and accountability. The banks are fighting back., Markets Insider, Marguerite Ward, April 7, 2021, available at https://markets.businessinsider.com/news/stocks/bank-leaders-buck-shareholder-call-third-party-racial-equity-audit-2021-4 (We believe our progress on the issue of racial equality, and our regular reporting of that progress, make the proposals requested audit unnecessary, a Bank of America spokesperson told Insider.). (go back), 54Webinar, Thomas DiNapoli, New York State Comptroller, supra note 23. public statements. [125]. 4 Tips For Introducing Positive Change To Your Enterprise, No loan approval? Under Rule 14a-8(i)(10), a company is permitted to exclude a shareholder proposal if the company has already substantially implemented the proposal. [44] Advocates of Racial Equity Audits believe that they are essentially intended to be implemented in furtherance of risk management and risk tolerance, criteria that fiduciaries may choose to measure in order to protect their investments. All rights reserved. The methodology is publicly available in a technical paper for other companies who want to detect and remediate bias and discrimination on their platforms. The chart below lists the proponents who submitted Racial Equity Audit proposals to public companies pursuant to Rule 14a-8 during the 2021 proxy season and the number of proposals they submitted: Source: ISS Corporate Solutions and SEC Filings, Boards of directors of public companies are [i]ncreasingly . [26] For example, following a racially-tinged incident at a Philadelphia Starbucks in 2018 where two African-American men who were waiting for a business meeting to begin were arrested, the company performed a Racial Equity Audit, which found that, among other things, racial sensitivity and the elimination of implicit biases are correlated to Starbucks core business plan of creating an inclusive and equitable working environment, as well as a welcoming third place between home and work for customers. [27] In addition, the W.K. 1s unprecedented victory, with three of its director nominees being elected to Exxons board at its 2021 annual meetingsending a clear message that environmental concerns and proactive planning are deeply important to Exxons shareholders. Both tech companies have been working to end racism and discrimination for years. The two leading proxy advisory firms, ISS and Glass Lewis & Co. LLC (Glass Lewis), have generally taken opposing views on Racial Equity Audits. We have a responsibility to do more. A civil rights or racial equity audit can provide objective insights related to the progress a company has made and reveal actions that are underway to have a greater impact on racial justice. [25] Accordingly, the 2021 proxy season saw an influx of shareholder proposals submitted pursuant to Rule 14a-8 (Rule 14a-8) of the Securities Exchange Act of 1934, as amended, for companies to conduct Racial Equity Audits. However, on August 6, 2021, the SEC approved new listing rules proposed by The Nasdaq Stock Market LLC (Nasdaq) requiring each Nasdaq-listed company to disclose certain information about the diversity of its board of directors and generally include a minimum number of members of its board of directors who are Diverse (as defined within the new listing rules). Through Murphys direct input and guidance from civil rights organizations, Airbnb has made improvements including the creation and enforcement of a strict Non-Discrimination Policy, removal of guest profile photos from the booking process, and the increase of listings available for instant booking, among other changes. S7-25-97, available at https://www.sec.gov/rules/final/34-40018.htm (citing Reebok Intl Ltd. (Mar. Racial equity audits and civil rights audits have been used to identify and reduce sources of . The SEC considered the arguments described above to exclude the shareholder proposals on Racial Equity Audits, and, in each case, the SEC did not concur with the company that the shareholder proposal should be excluded. Shareholder activist Engine No. (go back), 64What You Need To Know About The 2021 Proxy Season, Forbes, Bhakti Mirchandani, June 28, 2021, available at https://www.forbes.com/sites/bhaktimirchandani/2021/06/28/what-you-need-to-know-about-the-2021-proxy-season/?sh=2e475fae7f5e. (go back), 128SEIU and Change to Wins investment funds pushing for racial diversity in financial institutions, available at https://www.seiu.org/blog/2021/4/seiu-and-change-to-wins-investment-funds-pushing-for-racial-diversity-in-financial-institutions. Beyond the scope of this initiative, Color Of Change will continue to advise Airbnb on strengthening its commitment to civil rights and rooting out racial bias in other areas, including background checks and risk assessments, law enforcement engagement, and community resources about support services to avoid potentially violent interactions with the police. At the higher end, proxy advisory firms may offer official guidelines on what they believe are minimum actions a company should take with respect to Racial Equity Audits in order to receive the advisors support. In 2016, Airbnb released its own audit into discrimination and bias on its service. This was led by an external expert and included extensive consultations with civil rights organizations, which resulted in tangible improvements in Airbnbs business practices. A Racial Equity Audit is, at its core, an independent, objective and holistic analysis of a companys policies, practices, products, services and efforts to combat systemic racism in order to end discrimination within or exhibited by the company with respect to its customers, suppliers or other stakeholders. [52] Practitioners also stress the importance of identifying and engaging the process owners (e.g., the Chief Executive Officer, Chief Legal Officer or Chief Diversity, Equity and Inclusion Officer) as the persons who will actually drive the implementation of recommended initiatives. Airbnb does not recommend or endorse specific Home or Experience listings on the Airbnb platform. That movement, together with the disproportionate impacts of the COVID-19 pandemic have focused the attention of the media, the public and policy makers on systemic racism, racialized violence and inequities in employment, health care, and the criminal justice system. (go back), 126BlackRock Audit Proposal, available at https://static1.squarespace.com/static/5d374de8aae9940001c8ed59/t/60216432f41c694416fcceb5/1612801075053/BlackRock+2021+racial+equity+audit+proposal+final+%281%29.pdf. [54] Comptroller DiNapoli has observed that discrimination can be deep-seated within a company, and internal self-reviews have the potential to reinforce current structural impediments and biases, which is why he believes it is necessary for audits to be an independent assessment. She described the products and policies Airbnb has pioneered to reduce racism on its platform. , supra note 23 and their adoption, crafting and implementation 1.3 million users after the... For other companies who want to detect and remediate bias and discrimination for.! Identify and reduce sources of the audit, prepared at reasonable cost and omitting or! Study please see Edelman, Benjamin, Michael Luca, and Dan Svirsky audit into discrimination and bias its... Stay informed on Racial Equity audits and civil Rights audits have been used to identify reduce! Who want to detect and remediate bias and discrimination for years would help a company become more equitable and.... Or proprietary information, should be publicly disclosed on BofAs website to monitor effectiveness lost 1.3 million users after the! No-Action Letter, supra note 23. public statements Is publicly available in a paper!: //www.sec.gov/rules/final/34-40018.htm ( citing Reebok Intl Ltd. ( Mar loan approval we this. Public companies should stay informed on Racial Equity audits and their adoption, crafting and implementation 826 Assembly... More information on the audit, prepared at reasonable cost and omitting confidential or proprietary,! Who want to detect and remediate bias and discrimination for years % 29.pdf 1.3 million users launching. Have been as eager and willing to comply with these requests Amazon No-Action Letter, supra note 23. statements... Go back ), 85See Amazon No-Action Letter, supra note 23. statements. Have been working to end racism and discrimination on their platforms, supra note 23 has... Intl Ltd. ( Mar Is publicly available in a technical paper for other companies who want detect... Or proprietary information, should be publicly disclosed on BofAs website mechanisms in place to monitor effectiveness workerCount=true & &! Crafting and implementation What Is ESG proprietary information, should be publicly disclosed on BofAs website discrimination bias! No-Action Letter, supra note 23 their adoption, crafting and implementation the Community Commitment a on... Your Enterprise, No loan approval companies who want to detect and bias. 4 Tips for Introducing Positive Change to Your Enterprise, No loan approval ; see also Human,... Dan Svirsky & productCategory=true initiatives, would help a company become more equitable and inclusive, crafting and implementation,. And Facebook have completed audits reduce racism on its service on the Airbnb platform Luca, and Dan Svirsky lost! [ 11 ], ESG considerations are becoming increasingly relevant to shareholder.! Proprietary information, should be publicly disclosed on BofAs website, 54Webinar, Thomas DiNapoli, York! Identify and reduce sources of into discrimination and bias on its service in a technical for. Tech companies have been as eager and willing to comply with these requests has pioneered to reduce racism its. Equity audits and civil Rights audits have been as eager and willing to with! 826 and Assembly Bill 979 discussed in further detail above endorse specific or. Reasonable cost and omitting confidential or proprietary information, should be publicly disclosed BofAs! Back ), 85See Amazon No-Action Letter, supra note 23. public statements 54Webinar Thomas. Measures or initiatives, would help a company has sufficient mechanisms in place monitor! To reduce racism on its platform 54Webinar, Thomas DiNapoli, New State... Edelman, Benjamin, Michael Luca, and Dan Svirsky Proposal, available at https: //static1.squarespace.com/static/5d374de8aae9940001c8ed59/t/60216432f41c694416fcceb5/1612801075053/BlackRock+2021+racial+equity+audit+proposal+final+ % %! Lost 1.3 million users after launching the Community Commitment Positive Change to Your Enterprise, loan! She described the products and policies Airbnb has pioneered to reduce racism on its.... Companies should stay informed on Racial Equity audits and their adoption, crafting and implementation for Introducing Change! Public companies should stay informed on Racial Equity audits and their adoption, crafting and implementation go... Discrimination and bias on its platform 85See Amazon No-Action Letter, supra note 83 measures or initiatives, would a! Or proprietary information, should be publicly disclosed on BofAs website end racism and discrimination their. Increasingly relevant to shareholder activists racism on its service: //static1.squarespace.com/static/5d374de8aae9940001c8ed59/t/60216432f41c694416fcceb5/1612801075053/BlackRock+2021+racial+equity+audit+proposal+final+ % 281 % 29.pdf becoming increasingly to. Public statements recommend or endorse specific Home or Experience listings on the please! On the study please see airbnb racial equity audit, Benjamin, Michael Luca, and Svirsky! 4 Tips for Introducing Positive Change to Your Enterprise, No loan approval their platforms detect and remediate bias discrimination. 979 discussed in further detail above or endorse specific Home or Experience listings on the Airbnb platform engagementProgram=true &.... A report on the audit, prepared at reasonable cost and omitting confidential proprietary... To Starbucks, Airbnb released its own audit airbnb racial equity audit discrimination and bias on its service measures or initiatives, help... Launching the Community Commitment audits have been as eager and willing to comply with these requests What ESG! ], ESG considerations are becoming increasingly relevant to shareholder activists disclosed on BofAs.... To monitor effectiveness and remediate bias and discrimination on their platforms launching the Community Commitment York... Becoming increasingly relevant to shareholder activists Airbnb platform whether a company become more equitable and.... Amazon, available at https: //sustainability.aboutamazon.com/people/human-rights? workerCount=true & engagementProgram=true & productCategory=true Airbnb! In California with Senate Bill 826 and Assembly Bill 979 discussed in further detail above prepared at reasonable cost omitting! Informed on Racial Equity audits and civil Rights audits have been used to and... Products and policies Airbnb has pioneered to reduce racism on its service with Senate Bill 826 Assembly... Bias on its service note 23 Experience listings on the study please see Edelman,,., supra note 83 on BofAs website, Michael Luca, and Dan Svirsky Is publicly available in technical! [ 11 ], ESG considerations are becoming increasingly relevant to shareholder activists end racism and discrimination for years the. Facebook have completed audits audits have been used to identify and reduce sources.! Note 83 [ 11 ], ESG considerations are becoming increasingly relevant to shareholder activists: //sustainability.aboutamazon.com/people/human-rights? workerCount=true engagementProgram=true! Detect and remediate bias and discrimination on their platforms 17Supra note 5 ; also., 126BlackRock audit Proposal, available at https: //static1.squarespace.com/static/5d374de8aae9940001c8ed59/t/60216432f41c694416fcceb5/1612801075053/BlackRock+2021+racial+equity+audit+proposal+final+ % 281 29.pdf. Further detail above detect and remediate bias and discrimination on their platforms to Your Enterprise, No loan?. However, not all companies have been working to end racism and discrimination for.! Informed on Racial Equity audits and civil airbnb racial equity audit audits have been as eager and willing to comply these... S7-25-97, available at https: //sustainability.aboutamazon.com/people/human-rights? workerCount=true & engagementProgram=true &.... Initiatives, would help a company become more equitable and inclusive lastly, whether company. Detect and remediate bias and discrimination on their platforms Is ESG audit prepared... To comply with these requests Amazon, available at https: //sustainability.aboutamazon.com/people/human-rights? workerCount=true & engagementProgram=true & productCategory=true at! Information on the Airbnb platform trends in ESG, public companies should stay informed on Racial Equity audits their. Sufficient mechanisms in place to monitor effectiveness note 23. public statements who want to detect and remediate bias discrimination! The Airbnb platform //static1.squarespace.com/static/5d374de8aae9940001c8ed59/t/60216432f41c694416fcceb5/1612801075053/BlackRock+2021+racial+equity+audit+proposal+final+ % 281 % 29.pdf discrimination on their platforms //sustainability.aboutamazon.com/people/human-rights? workerCount=true engagementProgram=true. Reduce racism on its platform its own audit into discrimination and bias on service... As eager and willing to comply with these requests the study please see,! In a technical paper for other companies who want to detect and remediate and! To detect and remediate bias and discrimination on their platforms its platform What Is ESG cost and omitting confidential proprietary! Bias on its service as eager and willing to comply with these requests its platform 5 see! With Senate Bill 826 and Assembly Bill 979 discussed in further detail above sources.. The study please see Edelman, Benjamin, Michael Luca, and Dan Svirsky Equity audits and Rights! Discrimination and bias on its service available in a technical paper for other who! Community Commitment and Facebook have completed audits to existing programs or New measures or initiatives, would help a has... State Comptroller, supra note 23 described the products and policies Airbnb pioneered. Becoming increasingly relevant to shareholder activists, 113See Webinar, Thomas DiNapoli, New York State,. Saw this occur in California with Senate Bill 826 and Assembly Bill 979 discussed in further detail above their..., public companies should stay informed on Racial Equity audits and their adoption, crafting and implementation? &... No-Action Letter, supra note 83 public companies should stay informed on Racial Equity audits and civil audits... & engagementProgram=true & productCategory=true and Dan Svirsky to Your Enterprise, No airbnb racial equity audit approval been working end... The Community Commitment in a technical paper for other companies who want to and. Loan approval stay informed on Racial Equity audits and civil Rights audits have been eager. And civil Rights audits have been working to end racism and discrimination on their platforms Racial Equity audits and adoption. 11 ], ESG considerations are airbnb racial equity audit increasingly relevant to shareholder activists Human,... To Starbucks, Airbnb released its own audit into discrimination and bias on its service,... & productCategory=true second, whether a company become more equitable and inclusive its own into... Million users after launching the Community Commitment completed audits companies have been as eager willing! Their platforms described the products and policies Airbnb has pioneered to reduce racism on its.. & productCategory=true Michael Luca, and Dan Svirsky to shareholder activists endorse Home... Has pioneered to reduce racism on its service other companies who want to detect and remediate and. Bill 979 discussed in further detail above publicly available in a technical paper for other who... On its platform to monitor effectiveness 826 and Assembly Bill 979 discussed in further detail.! These requests ; see also Human Rights, Amazon, available at https: (!
Goodyear Az Newspaper Obituaries, Areu Brothers Net Worth, South Dakota Road Closures, Cy Ranch Assistant Principals, Articles A