Citigroup, Wells Fargo, Bank of America, Goldman Sachs urge shareholders to vote against racial-equity audits

Four of the nation’s largest banks are asking shareholders to reject racial-equity resolutions after they expressed solidarity with the Black Lives Matter motion final yr.

Citigroup Inc.
Wells Fargo & Co.
Bank of America Corp.

and Goldman Sachs Group Inc.

have been among the many many massive U.S. firms to make public statements of assist in response to widespread protests final summer season after the police killings of George Floyd and Breonna Taylor. In latest days, they’ve all formally opposed shareholder teams’ requires them to conduct and publicize racial-equity audits and different modifications, saying they’re already doing sufficient to handle fairness points.

The shareholder proposals urge the banks to study their practices and insurance policies and establish methods to “avoid adverse impacts on nonwhite stakeholders and communities of color,” one thing the banks says is pointless as a result of they’re juggling totally different, associated initiatives and/or have dedicated cash to such points internally and externally. The proposals are included in proxy statements to shareholders, which permit for the businesses to assist or oppose shareholder resolutions and clarify why forward of a vote at their annual conferences.

For extra: Companies declared ‘Black lives matter’ last year, and now they’re being asked to prove it

CtW Investment Group wrote in its proposal to Citi shareholders that the financial institution “has a conflicted history when it comes to addressing racial injustice within the communities it serves.” The group supplies examples, together with Citi getting fined by the Treasury Department in 2019 for failing to provide all prospects mortgage reductions and credit; its required minimal upkeep charges and minimal day by day balances; and the truth that it has just one Black government within the C-suite (Chief Financial Officer Mark Mason).

“While we disagree with the overall approach in this proposal, we are completely aligned with its stated goal of addressing racial inequity in the financial sector,” Citi stated in its proxy filed Wednesday.

The financial institution pointed to its $1 billion dedication to offering larger entry to banking and mortgages for communities of shade, plus making investments in Black companies. It additionally stated, “As lately as September 2020, Citi launched a 104-page report on the financial value of Black inequality within the United States titled ‘Closing the Racial Inequality Gaps,’” and said its efforts on these issues are available to the public.

Citi is also recommending shareholders vote no on a couple of other racial equity-related resolutions, such as adopting a “Rooney Rule” policy to increase diversity in its board of directors and disclosing its direct and indirect lobbying activities in a report.

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CtW also mentioned minimum requirements for deposits and fees in its Bank of America resolution, adding that the Treasury Department found in 2018 that the bank offered proportionately fewer home loans to minorities than white applicants in Philadelphia, and that BofA’s C-suite is simply 8% Black.

Bank of America stated in its proxy launched final week that it has dedicated $1 billion to supporting minority-owned companies, jobs initiatives in Black and Hispanic communities, inexpensive housing and donations to traditionally Black schools and universities and extra. It additionally touted its work with “consumer advocates in the design and marketing of our financial services and products” and its efforts to diversify its office and management.

In its proposal at Wells Fargo, the Service Employees International Union Pension Plans Master Trust mentions the financial institution’s document of discriminatory lending practices which have led to totally different lawsuits and a settlement with the Department of Justice in 2012, in addition to settlements of employment-discrimination claims.

Wells Fargo, which launched its proxy Tuesday, stated it’s conducting a “human rights impact assessment,” and that it’ll launch a abstract of these outcomes and the actions it plans to soak up response. The firm additionally stated it’s making efforts towards range, fairness and inclusion in its office and amongst its prime ranks.

The SEIU put forth the same proposal at Goldman Sachs. It stated that regardless of Goldman’s acknowledged dedication to a various workforce, a Black managing director’s inner electronic mail calling for the corporate to do higher went viral final yr. In addition, the proposal mentions that the funding banking firm “underwrites municipal bonds whose proceeds pay police brutality settlements. For example, Goldman was lead underwriter for a 2017 Chicago offering that allocated $225 million for settlements and judgments.”

In its proxy launched Friday, Goldman Sachs beneficial that shareholders vote against the decision, saying it has taken further steps towards racial fairness prior to now yr, together with “assessing [its] shortcomings” and committing to hiring extra analysts from HBCUs.

It additionally pointed to its $10 million pledge to give to racial-justice organizations final yr, plus a whole lot of hundreds of thousands of {dollars} it has dedicated to grants and investments in minority companies through the years.

Dieter Waizenegger, government director of CtW, labored with the SEIU on the shareholder proposals. While he stated he “welcomed” the banks’ pledges on racial equality and justice points, “as investors, we believe a critical part of this work is an independent assessment of the effectiveness of these promises.” 

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The shareholder teams additionally had identified that the banks’ political and charitable donations have contradicted their acknowledged commitments to justice and fairness.

Wells Fargo “has donated to Senator Tom Cotton, who called for military air strikes on Black Lives Matter protests, as well as other members of Congress with racist records,” the SEIU shareholder decision says.

CtW stated “Citi donated $242,000 during the 2020 election cycle to 74 members of Congress who are rated ‘F’ by the NAACP,” and that Bank of America has been concerned in issuing “judgment obligation bonds, a portion of which was used to pay for police related settlements” in Los Angeles.

Wells Fargo, Bank of America and Goldman have donated to police departments that “bypass normal procurement processes to buy equipment for police departments, including surveillance technology that has been used to target communities of color and nonviolent protestors,” the shareholder resolutions say.

Morgan Stanley
which had additionally been going through a decision for a racial-equity audit, got here to an settlement lately with CtW, which withdrew the proposal. Morgan Stanley has dedicated to an inner overview of its workforce and management, in accordance to CtW, which additionally stated the financial institution has agreed to speak about what it can do to guarantee fairness for different non-white stakeholders earlier than subsequent yr’s shareholder assembly.

JP Morgan Chase & Co.

is going through the same shareholder proposal however has but to launch its proxy. This article shall be up to date when it does.

This article has been up to date with further info.

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