Analyze corporate commitments to racial equity.

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After the racial reckoning last summer, many companies quickly made broad public statements on how they can do better. But, one year later, research and testimony indicate that many haven’t lived up to their promises.

The first place generating criticism is in financial commitments. Companies in the U.S. pledged a collective $50 billion to various racial initiatives (Financial Times), an unprecedented response to social issues (Washington Post). But, research indicates that only $250 million has actually been spent or committed to a specific initiative (Financial Times). William Cunningham, the chief executive of Creative Investment Research, who published the study, notes that until those funds are actually spent, there’s no reason they couldn’t be retracted or allocated to another initiative. Another survey found that tech companies that made commitments have 20% fewer Black employees on average than those that didn’t (Bloomberg), adding more skepticism to some organizations’ intentions.

In addition, Jay Peters at The Verge adds context to the true amount of the commitments made by big tech companies. Although Apple’s commitment of $100 million, for example, sounds quite large, it’s relatively minuscule when considering that they made $6.3 million in profit every single hour last year (The Verge). This isn’t to discredit the clear impact that $100 million can make, but to emphasize how much more companies could do with lasting, consistent investment.

This graph, from the same The Verge article, adjusts corporate contributions to racial equity against the median U.S. salary of $63,179 to demonstrate how little, relatively, tech companies pledged.

Many also pledged to improve conditions internally by diversifying their talent pipeline, addressing barriers to employment eligibility, and increasing representation in the executive suite (Financial Times). But, a year later, many of those same large companies have yet to release their diversity metrics, making it challenging to quantify comprehensive change.

Ada*, a Black woman, watched this unfold at the financial services company she works for. The company publicly announced significant investments into companies owned by marginalized communities and plans to diversify its hiring practices. But the company has yet to share its metrics on hiring. “I’ve asked human resources for the data,” she explains, “but they say it’s tricky because they don’t have the accurate data. This makes no sense to me, considering they asked me my race/ethnicity on my job application.”

Khalia*, who worked in development at a national nonprofit organization, noted that her company made commitments to change internal culture last June. But, efforts that were implemented faded after a few months. “We had an ERG that met monthly to discuss areas where we could improve company culture. This space brought up a lot of things the executive leadership wasn’t aware of. But now, most of the people that initially joined don’t come to the meetings anymore, including those same leaders. It feels like an afterthought. And I don’t think we’ve actually changed anything for the better”. She ultimately left the organization because she desired a stronger commitment to the cause.

This scrutiny is compounded when considering how companies invested in equity initiatives before last summer. Because of COVID-19, jobs with titles like “chief diversity officer,” “diversity and inclusion recruiter,” or “D&I program manager” fell nearly 60 percent between early March and early June, according to the careers site Glassdoor (Washington Post). In comparison, jobs overall fell by 28%, and human resources roles fell by 49%, demonstrating that many companies felt like this was the best place to reduce costs. Since the murder of George Floyd and the subsequent protests, diversity job postings are surging. But filling the position isn’t enough; experts warn that these can be performative hires if leaders aren’t empowered and supported to guide corporate change (Axios).

Individuals, often employees of color, have taken on the task of carrying this work forward, regardless of their company’s investment. Ada has been intentional about incorporating initiatives to address systemic oppression and racism with her team, which she believes increases feelings of belonging and solidarity. “We have ongoing conversations, book clubs, watch movies, etc. My team has said that they look forward to it because they don’t have that outlet anywhere else.”

But individual employees aren’t the only ones taking note. Shareholders at major companies are pressuring executive leadership to perform racial audits for transparency and accountability (Forbes). Of seven big Wall Street banks, six urged shareholders to reject the proposals, despite the deep history of racial inequity in the financial sector (Inequality). Shareholders at Amazon, which is facing a slew of new allegations of racism and discrimination through its product offering and working conditions, are expected to vote on a racial audit on May 26 (Forbes).

Nevertheless, it’s important to recognize that all progress made so far – and how far we have to go has happened because each of us raise our voices and rally for change. “The only reason companies cared is because their employees did,” said Ada. “If people continue the momentum, there will be more accountability.” As the summer unfolds, continue to hold the organization you may work for, buy from, and engage with accountable to shift culture, both for employees and broader society.

We’d love to hear from our Black, Indigenous, and other readers of color: how has the company you work for respond to the events last year? How has it changed your experience working at your company? Reply to this email with your thoughts. 

*Names have been changed.

Key Takeaways

  • As we approach one year since the racial reckoning of last summer, individuals and shareholders are scrutinizing the pledges made by major corporations to addressing racial equity
  • Over $50B was pledged by major corporations to racial equity initiatives, but so far, an estimated $250M has been committed
  • A growing number of shareholders are voting for their corporations to perform racial audits for accountability

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