JPMorgan Might Kneel for ‘Justice’ But It Isn’t Standing For True Racial Equity
As is clear from the immense harm corporations continue to cause to communities of color, a racial equity audit is just the first step of many to hold these companies accountable.
Despite the best efforts by corporations to return to business as usual, there is no denying the social and financial implications of the past two years, and the disproportionate blow to workers and communities of color. The last few proxy seasons, the time of year when corporations gather their shareholders to share metrics and set goals, have proven that stakeholders from workers to investors will not stand for empty promises when it comes to racial equity in the workplace.
SOC Investment Group and The Service Employees International Union (SEIU)’s Capital Stewardship Program have stepped in and demanded that some of the nation’s largest and most influential companies conduct independent racial equity and civil rights audits.
Already we’ve seen:
- The first shareholder proposal to pass at Apple Inc. in over ten years, with 53% of shareholders at Apple voting in favor of a civil rights audit proposal following discrimination, gender pay disparity and privacy-related concerns;
- 64% of shareholders of Maximus, a major government contracting company, voted to approve a racial equity audit — the highest vote result thus far;
- Major financial institutions like Citigroup, State Street and BlackRock have agreed to conduct a third-party racial equity audit, with findings to be released by the end of 2022.
This adds to the growing number of corporations that civil rights groups have pushed to commission racial equity audits in the past few years, including Starbucks, Facebook and Airbnb. As is clear from the immense harm these corporations continue to cause to communities of color, a racial equity audit is just the first step of many to hold these companies accountable.
One company that has been tardy to the party is JPMorgan Chase. JPM’s CEO Jamie Dimon has attempted to have his cake and eat it too when it comes to racial justice. In response to the racial reckoning of 2020, he stated, and we concur, “[JPM] can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It’s long past time that society addresses racial inequities in a more tangible, meaningful way.”
But we got words and very little action. Dimon was adamant that shareholders vote “no” on the racial equity audit resolution, even calling it “a complete waste of time.” Dimon also refused to sign a commitment alongside a coalition of corporations opposing discriminatory voting legislation despite personal requests from senior Black business leaders. And while JPMorgan was the largest lender during the initial round of Paycheck Protection Program distribution, only 32% of its funding went to minority-owned small businesses.
But on March 25, after months of intense negotiations with SOC Investment Group, JPMorgan Chase finally agreed to honor the will of nearly 40% of its shareholders by retaining a third party to perform a racial equity audit.
Let us make no mistake about it: a commitment to a racial equity audit and the quality of this assessment are two very different things. JPMorgan’s announcement does not address who they have selected as their civil rights auditor. As Laura Murphy, the powerhouse civil rights expert who oversaw civil rights audits at Facebook and Airbnb, noted, assessments must be led by someone who has “civil rights expertise, cultural competence and adequate resources to conduct the audit.”
For JPMorgan to produce a robust and objective assessment of its racial equity impact, the auditor must be able to provide a civil rights and racial equity focus in the areas within the scope of the audit. That means avoiding white-shoe law firms and not relying on friendly financial-focused consultants to oversee this process.
Also noticeably absent is the inclusion of stakeholder groups in the consultation process, as requested in the original proposal. Stakeholder feedback is a critical element of a racial equity audit as it will allow the auditor to identify the most pressing issues.
Finally, JPMorgan should understand that limiting this assessment to only its $30 billion commitment is underwhelming at best and underhanded in its attempt to portray itself as earnest. As the world’s largest financial institution, a racial equity audit conducted on the full scope of its lending practices should be only the first step in a more comprehensive process of repairing the harm caused by the banking industry’s discriminatory practices. While this audit is limited in scope, stakeholders like ourselves and employees will not be satisfied until the bank examines the impact of its policies, procedures and products, including its employment practices, its lending policies and underwriting policies on Black and other marginalized groups.
For example, the City of Chicago was forced to spend more than $462 million, an amount equal to nearly half of the city’s COVID-19 relief funds under the American Rescue Plan, on debt payments to JPMorgan. The influx of relief dollars should have been used to help the Black and Latinx neighborhoods in Chicago that bore the brunt of the health and economic impacts of the pandemic, not enriching America’s largest bank. JPMorgan’s often predatory municipal lending practices have harmed communities of color across the country by diverting money away from essential community services.
As the past couple of years have demonstrated, if results are lacking, activists from a range of racial justice and economic justice groups are more than willing to ratchet up public scrutiny at the most powerful corporations.
Marc Bayard is an Associate Fellow and the Director of the Black Worker Initiative at the Institute for Policy Studies (IPS). Follow him on Twitter @MarcBayard.
Saqib Bhatti is the Co-Executive Director of the Action Center on Race and the Economy (ACRE).
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