Companies that declared solidarity after George Floyd killing may be ‘woke washing,’ shareholder advocates warn

Wealth-management firm Arjuna Capital, along with As You Sow and others, has introduced several resolutions involving racial justice and diversity, equity and inclusion this year — some of which have already received votes from a majority of shareholders. They want companies to go beyond performative messaging. They want them to follow through.

For example, they are concerned about “woke washing” by Nike Inc. NKE, +0.19%, which has received kudos for its many commercials and ads about racial justice, including those featuring former NFL quarterback Colin Kaepernick, one of the most prominent activists for Black Lives Matter. The company, which has yet to release its proxy ahead of its September shareholder meeting, does not disclose enough meaningful diversity data, said Meredith Benton, a consultant with Berkeley, Calif.-based As You Sow and a principal at Whistle Stop Capital.

As You Sow says Nike is trying to block a resolution seeking release of the company’s EEO-1 data, which is a federally required accounting of workforce and leadership demographics, plus more information about hiring, retention and promotion. Nike has not returned a request for comment.

Natasha Lamb, managing director of Massachusetts-based Arjuna, expressed higher hopes about the fate of a similar proposal going before Amazon.com Inc. AMZN, +0.43% shareholders on Wednesday, especially because influential proxy advisory firm Institutional Shareholder Services is recommending that shareholders vote for it.

Still, Lamb said, “Amazon is such a prime example of woke-washing. It made many statements of solidarity after George Floyd’s killing.” Yet the company is against disclosing pay-gap data, which she said “just shows the hypocrisy of corporate America.”

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Amazon also faces other resolutions that affect racial justice and equity, including calls for reports on promotion data, a civil-rights and DEI audit and its use of surveillance products, plus a call for hourly workers to be allowed as board candidates. It opposes these and the rest of the 11 resolutions introduced by shareholders this year.

“Amazon is committed to the creation of good jobs, a sustainable future, flourishing communities, a strong economy, and successful small and medium-size businesses,” a spokeswoman said. 

Some companies are hearing the calls for following through loud and clear, with shareholders at companies like International Business Machines Corp. IBM, -0.64% and American Express Co. AXP, -0.40% voting this year for more transparency on workforce diversity.

A shareholder resolution calling for an annual report on diversity at IBM, which the company supported, ended up with 94% of the vote in April.

American Express, which opposed a similar resolution, saw 60% of its shareholders vote for it this month. An American Express spokeswoman referred to CEO Stephen Squeri’s comments at the company’s shareholder meeting earlier this month, where he said the company would release its EEO-1 report — it has just done so this week — and announced that it achieved pay equity across race and gender in 2020.

Berkshire Hathaway Inc. BRK.A, -0.73% BRK.B, -0.87%, also opposed to such a resolution, saw 54% of independent shareholders support the move earlier this month, not including shares held by Warren Buffett and the board. In its proxy, Berkshire pointed to its 60 operating businesses and stated, “It would be unreasonable to ask for
uniform, quantitative reporting for the purposes of comparing such dissimilar operations in different geographic locations.”

Other efforts have been less successful. A proposal for a report on racial and gender pay gaps at Intel Corp. INTC, -0.16% received only 15% of shareholder votes, despite Intel’s longstanding push for diversity. That was disappointing, Lamb said.

“Intel holds itself up as a leader when it comes to sustainability and diversity, but it’s falling short,” she said.

An Intel spokeswoman said the company has released its EEO-1 report since 2019, and publishes a diversity and inclusion report each year. She also referred to the company’s proxy statement, which repeats Intel’s declaration that it has reached gender pay equity globally and race/ethnicity pay equity in the U.S.

Other resolutions did not end up before shareholders for a vote this year because there was no need. Some companies agreed to make changes in response to talks with different shareholder advocacy groups.

Benton said Walt Disney Co. DIS, +1.07% and Allstate Corp. ALL, -1.52% promised to release their EEO-1 reports and discuss their diversity and inclusion strategies and outcomes. In addition, CVS Health Corp. CVS, -1.13% agreed to report on progress of its social justice commitments and disclose its inclusion factors.

“Company willingness to talk meaningfully is significantly different in the wake of the George Floyd protests and the high investor support votes,” Benton said. “It’s not a full 180, but we’re within 15 degrees of that. A 165.” 

Shareholders are calling on social media companies’ investors to hold the companies accountable for more than just their diversity efforts. On Wednesday, Facebook Inc. FB, +0.97% shareholders will vote on a resolution calling for a human- and civil-rights expert on its board. The company recommends a no vote on that and other resolutions. The next day, Twitter Inc. TWTR, -0.11% has a similar proposal before its investors. The company also opposes that resolution.

Google parent company Alphabet Inc. GOOGL, +0.08% GOOG, +0.10% is holding its annual general meeting next Wednesday. Among the equity-related proposals its shareholders will be considering are a call to appoint a human- and civil-rights expert to its board and a third-party review and report on its whistleblower policies.

See: Amid labor strife, Google opposes shareholder call for whistleblower-policy review

Jonas Kron, chief advocacy officer at Trillium Asset Management, during a press call Monday referred to Google’s repeated instances of worker discontent, firings and more, especially over the past few years. “These incidents represent a field covered in red flags,” he said. “Now is the time to bring in a company to do an audit.”