JPMorgan Chase & Co. made the largest racial equity pledge of any American company in the wake of the May 2020 murder of George Floyd, pledging to spend $30 billion over five years to close the wealth gap for communities of color. The bank now says it has made substantial progress – while some critics say it hasn’t gone far enough.
By the end of 2021, JPM bank,
had deployed or committed more than $18 billion of that, focusing on increasing home ownership, expanding affordable rental housing, supporting minority-owned small businesses, diversifying its supply chain and creating more opportunity for its employees of color, as Chief Executive Jamie Dimon highlighted in his annual letter to shareholders earlier this year.
Dimon spoke out in 2020 to condemn the unfair treatment of people of color in the United States.
“Systemic racism is a tragic part of America’s history,” he said as he announced the $30 billion pledge in October 2020. “We can do more and better to break down the systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It is high time society addressed racial inequality in a more tangible and meaningful way.”
JPMorgan’s black employees made up 14% of the total workforce at the end of 2021, more than the 13% of the total US population that black people represent, and up from 13% of JPMorgan’s workforce at the end of 2020 .
Hispanic employees made up 20% of the workforce, unchanged from 2020, and Asian employees 17%, up from 16% a year earlier.
“More women were promoted to Chief Executive Officer and Executive Director in 2021 than ever before, we doubled the number of employees who identify as LGBT+ globally and launched a differentiated global strategy for neurodiversity within from our Office of Disability Inclusion,” the company said in a statement.
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Brian Lamb, who until recently was global head of diversity, equity and inclusion at JPMorgan, said much of the work on the fund comes down to serving communities that have historically been left behind. for account. This begins by addressing factors related to creating more prosperity, improving financial literacy and access to quality education, access to capital loans and access to ownership, and understanding the needs of local communities, he said.
“That means developing relationships with black leaders and other partners and making sure there are branches or outlets where people of color live and work,” Lamb told MarketWatch in an interview.
But JPMorgan’s critics have pointed to the bank’s reluctance to agree to a comprehensive independent racial equity audit that would examine the impact of the bank’s past practices on black communities and other communities of color.
At the bank’s 2021 annual meeting of shareholders, Dimon dismissed a shareholder question on the matter saying it would be a complete “waste of time”, insisting the bank would not pay a company outside to measure what it was already planning to track and disclose.
“We don’t need it [an audit]; we get no value and it just adds another layer of bureaucratic fluff,” Dimon said at the time.
Dimon has since backtracked, promising an audit later this year that will be limited to the $30 billion commitment. The long battle to change his mind is “baffling”, said Dieter Waizenegger, chief executive of SOC Investment Group, a group that seeks to hold corporations and their leaders accountable for corporate behavior.
“Jamie Dimon is out there taking a knee and making this big commitment,” he said, referring to the occasion in June 2020 when Dimon took a knee with other members. staff at a branch in Mt. Kisco, NY, mimicking the stance taken by some black athletes to protest racism. “But when there was this resistance to having an independent third party peek under the hood, we were really surprised.”
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Other critics say that as head of the Business Roundtable, Dimon could have inspired others to engage more fully with the racial inequities and discriminatory practices of the financial services industry that have long harmed people of color, as black activists urge.
“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 management practices. employment, its lending policies, and its underwriting policies on blacks and other marginalized groups,” wrote Marc Bayard, associate fellow and director of the Black Worker Initiative at the Institute for Policy Studies, and Saqib Bhatti, co- executive director of the Center for Action on Race and the Economy, in a recent op-ed for Blavity, a digital media company for black millennials.
They noted that Dimon also refused to sign a pledge presented by a business coalition last year opposing “any discriminatory legislation or measures” that prevent voters from casting their ballots, despite requests from top business executives. black. The statement, published to much fanfare in The New York Times and other Black Economic Alliance publications, was titled “We Stand for Democracy.” It was led by former American Express CEO Ken Chenault and then Merck CEO Ken Frazier, both black.
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JPMorgan declined to comment on the issue of the racial equity audit, but referred MarketWatch to an update highlighting all the changes since it committed the $30 billion.
As for Dimon’s refusal to sign the voting rights pledge, the company said at the time that it had made its own “strong statement last month about the critical importance that every citizen can exercise their right voting fundamental”. Dimon has also publicly stated that “voting is fundamental to the health and future of our democracy, and that ‘voting must be accessible and fair.’
“We regularly encourage our employees to exercise their fundamental right to vote and oppose efforts that might prevent them from doing so. We are a stronger country when every citizen has a voice and a vote,” he said in March.
Partnerships, suppliers and loans
Certainly, JPMorgan has upped its game since 2020 when it comes to serving and promoting people of color. In an effort to add more black executives to its staff, it expanded its partnerships with historically black colleges and universities to 17 schools across the United States. This represented three HBCU partnerships previously, according to a bank spokesperson.
The bank spent an additional $155 million with black, Hispanic and Latino suppliers in 2021, more than double its first-year spending target. This increased the number of providers in these communities by more than 40% compared to 2020.
The bank has also approved about $13 billion in loans to create — and maintain — more than 100,000 affordable housing and rental units, acknowledging that historically discriminatory housing policies and lending practices have made homeownership less affordable. accessible to many people of color.
He hired more than 150 community home loan advisors to help build a community-based, affordable home loan business, and gave homebuyers a $5,000 grant to cover closing costs for homes purchased in 6,700 neighborhoods. minorities across the United States.
And to energize small businesses, the bank has added 25 “various senior business consultants” to support business owners in 141 cities and to mentor more than 1,000 businesses. He paid more than $100 million to acquire stakes in 16 financial institutions that serve approximately 90 communities of color in 19 states and the District of Columbia.
“We all wanted to go faster”
For Lamb, Floyd’s murder was a wake-up call. “The country was divided and we realized that our employees needed us the most at that time,” he said. “I saw this as a tremendous opportunity to lean in and quickly mobilize to ensure our people had support to manage.”
The bank understood the timing also had implications for its customers and came at an already difficult time with the coronavirus pandemic still raging.
“The shared frustration was the pace of change,” Lamb said. “We all wanted to go faster and see material changes faster. But we are a very successful company at JPMorgan and we wanted to get it right. We wanted it [to] have a purpose and be sustainable.
To measure the program’s success, the bank set metrics related to transparency and accountability, as well as checklists asking whether it created opportunities for women, for example, and whether they reached the highest level. raised.
“We will continue to track these metrics and they will be part of compensation,” said Lamb, who has a new role at JPMorgan’s commercial banking, where he will be responsible for middle market banking for the North East.
The bank has not found itself having difficult conversations with its white workers when promoting candidates of color to higher positions, the executive added.
“We’re lucky that our leaders or managers, if they’re not part of a diverse group, have a huge focus on being an ally and recognize that’s a key role,” Lamb said. “It’s not about awkward conversations, it’s about being culturally competent and helping all managers be inclusive leaders and create equality.”