By CultureBanx Team
- Citigroup, Bank of America, Wells Fargo and Goldman Sachs have all asked their shareholders to reject the racial-equity audit
- The financial industry has played a critical role in perpetuating unequal wealth distribution to communities of color
The only way to effectively address racial injustice and economic inequality is a careful study of how Wall Street’s products and services have contributed to this imbalance. Unfortunately, Citigroup (C +0.12%), Bank of America (BAC +0.73%), Wells Fargo (WFC +1.17%) and Goldman Sachs (GS -0.10%) have all asked their shareholders to reject the racial-equity audits. Elevating social justice and racial equity is a critical issue affecting financial companies, or so they claim while refusing to engage in a comprehensive, organization-wide transparent audit.
Why This Matters: A racial equity audit provides recommendations on observations of internal policies, external communications, and organizational practices as they pertain to goals of racial equity for a company. Investment firm BlackRock plans to undergo an external review of how its diversity, equity and inclusion policies impact stakeholders. In an employee memo sent at the beginning of the month BlackRock stated it wants “to be a leader in integrating diversity, equity and inclusion into every aspect of our business — ranging from our own people and culture, to how we serve our clients, to how we use our voice in broader society.”
In light of the protests sparked by the murder of George Floyd in June 2020, the CtW Investment Group requested systemically important financial institutions, like big Wall Street firms, to conduct a racial equity audits. Recently, Morgan Stanley (MS +0.65%) and CtW Investment Group reached an agreement for the bank to conduct an internal diversity review, and to meet shareholders on next steps before its 2022 annual meeting.
Most of the big banks have not been as interested in these types of transparent audits. Recently, JPMorgan CEO Jamie Dimon sent a letter to shareholders about the importance of careful planning, analysis and reporting on the economic and racial crises in the U.S. Last year, he even went into a Chase branch in New York and took a knee to show solidarity with the Black Lives Matter movement. However, when the bank released its proxy earlier this year, JPMorgan urged a “no” vote on a shareholder resolution that would ensure transparency on racial equity. If you’re confused and scratching your head right now, you’re not alone.
Even though JPMorgan committed $30 billion over the next five years to “close the racial wealth divide, support employees and break down barriers of systemic racism”, the bank has a long and “conflicted history” in addressing racial injustice. Among other things, the group mentioned the bank’s $55 million federal lawsuit settlement related to mortgage discrimination, the closing of its branches in majority-Black communities, and lawsuits alleging discrimination against its Black and Hispanic employees.
Situational Awareness: It’s not just the financial sector that’s under a racial justice microscope, so is big tech. E-commerce giant Amazon (AMZN %) has been dealt a major blow by U.S. securities regulators, as the company sought to stop its investors from considering a shareholder proposal to independently audit the company’s policies and practices on civil rights and racial discrimination.
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