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Corporate Anti-Racism Begins to Stall
The 2020 unrest following the murder of George Floyd triggered unprecedented national attention to questions of racial equity. Not only were Americans marching through the streets and demanding change, but for the first time, many large corporations publicly acknowledged the damaging role that racism plays in American life. U.S. corporations posted “Black Lives Matter” on social media, but they also vowed to back up verbal commitments with action. They pledged to fight racism by hiring people of color and other corporate social responsibility (CSR) initiatives.
Most of corporate America seemed to have been touched by this shift, much to the chagrin of conservative activists and business leaders. But is this narrative true? To what degree has corporate America actually publicly embraced diversity, equity, and inclusion?
The Real Story on Corporate DEI Initiatives
To answer this question, the Citizen Codex team searched hundreds of thousands of annual corporate filings (10-Ks) to the Securities Exchange Commission (SEC) from 2001 to 2023, looking for mentions of racial equity-related topics. These annual reports, also called 10-Ks, encapsulate the core financial, operational, and mission messages that corporations signal to current and potential shareholders. They are equal parts marketing campaigns and financial disclosure and can be used as a mechanism to understand the way corporations want the public to view them.
Our team’s findings present a much more nuanced picture of corporate America’s public embrace of racial equity:
- A majority of companies don’t discuss racial equity topics explicitly in their public filings. Of the more than 5,000 publicly traded companies filing annual reports to the SEC in 2023, 47% mentioned racial equity-topics.
- Most private sector attention on racial equity has disproportionately come from the largest corporations. Almost 95% of the S&P 500 mentioned racial equity or similar phrases in the last three years. Publicly traded companies that mentioned racial equity had a median revenue of $1.3 billion, while those that didn’t mention racial equity had a median revenue of $113 million.
- Corporate America’s public embrace of racial equity is stalling. After a 10-fold jump from 2020 to 2021, corporate mentions of racism have not grown substantially. Roughly the same number of companies mentioned racial equity in their filings in 2022 compared to 2023.
- This decline is in stark contrast to the other large corporate governance topic of our time: climate change. Mentions of climate change have continued to grow steadily in the last five years, with 20% more companies mentioning climate change compared to racial equity.
The Slowing of Racial Equity Efforts
This slowing embrace of racial equity suggests the limitations of corporate America’s role in systematically addressing racism without broader oversight. Beholden to shareholders, the private sector may be as volatile as the markets they work within when it comes to racial justice. This trend echoes a broader backlash against DEI initiatives.
Even if a company publicly commits to addressing racism, there is no public, verifiable, and auditable way to hold them accountable and monitor progress. Indeed, a recent McKinsey analysis found that most companies don’t follow up on their public commitments to diversity, equity, and inclusion. Ultimately, when it comes to anti-racism, corporate America may be merely virtue signaling, guilty of the proverbial “all talk, no action.” And even the “talk” is now waning.
But the winds may be shifting. The SEC has recently signaled a forthcoming commitment to DEI both internally as an organization and externally with the companies it regulates. Its recent strategic plan highlights opportunities to educate companies on the benefits of diverse workforces and how companies ought to report on environmental, social, and governance (ESG)-related activities. It also signals that it may build on existing diversity disclosure processes, which thus far have been voluntary. So even though corporate energy on DEI seems to be diminishing, we expect this space to evolve.
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Between 2008 and 2015, the various islands making up the U.S. territories received half the total media attention of equivalent-size states (4,936 vs. 10,138 articles).
An uptick in coverage of the territories in 2016 and 2017 was largely driven by the Puerto Rican debt crisis and the devastation of Hurricane María in the Caribbean.
North Korea’s 2017 announcement that Guam would be the target of its nuclear missile program also contributed to increased coverage that year.
In 2018 The New York Times reported heavily on the destruction caused by Typhoon Yutu in the Northern Marianas Islands.
The historic election of 2020 and the COVID-19 pandemic exacerbated the disparity in coverage between states and territories.
While native residents of the territories are generally U.S. citizens (except in American Samoa where they are U.S. nationals), they do not have the right to vote in general elections. Coverage about COVID-19 levels in different states and counties often excluded the territories.
The Enormous Federal Data Disparity
Federal data collection largely stops short of U.S. territories. Over the next 10 years, the Census Bureau will release approximately 264 key datasets for the 50 states. But for the territories of Guam, the Northern Marianas, American Samoa and the Virgin Islands, the Census Bureau will release only three total datasets over that same period: one decennial count and two economic surveys.
All told, the data collected by the Census Bureau will help direct at least 2.8 trillion dollars annually to 353 federal-assistance programs. While data on the 50 states helps the government direct funding where it’s needed most, a lack of territory data forces officials to operate in the dark.
For its most populous territory, Puerto Rico, federal data collection is a little better. The Census Bureau conducts an annual “Puerto Rican Community Survey” for the region’s 3.2 million residents. But the resulting estimates don’t use the same rigorous control methods as the “American Community Survey.” And data is only available on the county level instead of more specific geographies like zip codes and census tracts.
A Blindfold for Local Officials
Around the turn of the 20th century, the U.S. expanded its colonial influence over seas. Long left to the rule of the U.S. Navy, the nation’s territories were neglected by the government that claimed to rule them. This neglect hampered the development and assessment of the regions’ social programs. In recent years, a lack of federal data has hindered the ability of island territories to respond to disasters like the COVID-19 pandemic and extreme weather.
For example, in 2018, Typhoon Yutu devastated the Northern Mariana’s islands. By 2020, the recovery effort had just gotten underway when the spread of COVID-19 crushed the region’s critical tourism industry. When the federal government asked the region’s department of labor to estimate how many workers lost their jobs during the pandemic, they had no idea.
Speaking to the Honolulu Civil Beat, the head of Northern Mariana’s labor department Vicky Benavente said, “This is one lesson we learned. Data is so critical for justifying our asks to the federal government.”
State governments had ready access to reliable data. They used monthly reports from the Current Population Survey to monitor pandemic-induced rises in unemployment. Working without this data, the Northern Marianas government had to rely on a survey of employers conducted every two years. By 2021, so many businesses had shut their doors that few were left to reply.
About the Data
Data from this article is sourced from the Security and Exchange Commission's EDGAR database. Public companies and some private companies are required to disclose certain financial and operational risks to the SEC and public via reporting through EDGAR. We accessed EDGAR programmatically via a third-party application, SEC API. We used Bellingcat’s repository as additional reference and validation.
Thumbnail artwork designed by Chloe Phan.
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