Why a diversity leader just invested $1 billion for future DEI initiatives
In April, when Forbes published its 4th annual list of American’s best employers for diversity, it was abundantly clear that corporations have finally put a stake in the ground when it comes to diversity, equity, and inclusion (DEI). The Forbes study looked at businesses with at least 1,000 employees, and asked respondents about their company’s DEI practices, not just in hiring but in the composition of boards and executive ranks. As a company dedicated to providing insights about diverse people that lead to equity, BCT Partners has helped many corporations, foundations, and government agencies with their DEI efforts. We are pleased to see that organizations are doing much more than paying lip service to it and that the needle is finally moving in the right direction. As CEO and Founder of BCT, Dr. Randal Pinkett stated, “With the most well-known brands in the world finally making a serious commitment to DEI, it feels like we have reached a true milestone.”
One of the best examples of change are found in travel and financial services giant American Express (Amex), with 63,700 employees around the world, ranking 24th out of 500 on the Forbes list. Amex’s solid performance isn’t a surprise; diversity has been on its radar for decades—long before it was a mainstream corporate priority. Judging by its relatively high score, it has made significant DEI strides in its hiring initiatives, employee development and supply chain management.
Still, executives felt there was room for improvement. Last October, Amex Chairman and CEO Stephen J. Squeri, announced a $1 billion multiyear DEI initiative aimed at three stakeholder groups: employees, suppliers, and communities. He pulled no punches when alluding to systemic racism and other forms of discrimination that have held minorities back. Central to the financial commitment is “standing up against racism and eliminating barriers that have prevented people of all racial, ethnic and gender identities from having equal opportunities to pursue their aspirations,” he said. The funding came soon after the company launched the Office of Enterprise Inclusion, Diversity and Business Engagement, which will be responsible for driving DEI programs as well as measuring the company’s progress against its objectives.
For employees, those objectives include:
· Maintaining 100% Pay Equity: This year, American Express reached full pay parity for colleagues across genders globally and across races and ethnicities in the U.S. The company is committed to maintaining this level going forward.
· Enhancing Colleague Representation: As of the end of 2019, Black/African American and Latinx people represented 12.5% and 12.9%, respectively, of American Express’ U.S. workforce, and female colleagues comprised more than 50% of the company’s global workforce. Recruitment, hiring, and promotion practices were retooled to attract, develop, and retain underrepresented colleagues. A voluntary self-identification policy allows colleagues to share their diversity information with the company if they so choose.
For customers and business partners, those objectives include:
· Increasing Spend with Diverse Suppliers: The plan is to double spend with diverse and minority-owned suppliers in the U.S. to $750 million per year by the end of 2024. This includes increasing spend with Black-owned suppliers to at least $100 million annually.
· Expanding Access to Capital and Financial Education: The company is committed to providing access to capital and financial education to at least 250,000 Black-owned small and medium-sized businesses in the U.S. The company will work with Accion Opportunity Fund, a nonprofit organization focused on financial health, to provide minority-owned businesses with additional capital. The company is also partnering with IFundWomen of Color to provide 100 Black female entrepreneurs with grants of $25,000 each, plus access to 100 days of business resources to help them grow their ventures.
· Evolving Its Product Experiences, Marketing and Services: American Express will develop more inclusive marketing initiatives, as well as design and build product experiences and programs that better meet the needs of underrepresented consumer and business customers. One idea is to create programs that help amplify the voices of the Black and Latinx community and drive revenue to minority small business owners. American Express will also increase its investment in advocacy and financial education programs that focus on helping underrepresented customers.
For communities, the DEI objectives include:
· Furthering Philanthropic Support: Amex plans to provide $50 million in grants by the end of 2024 to support nonprofit organizations around the world that are led by people of color or underrepresented groups, including nonprofits focused on addressing inequality and promoting social justice.
· Elevating the Next Generation of Leaders: The American Express Leadership Academy will seek to increase the representation of people of color 50% in 2019 to 75% by 2024. Globally, the American Express Leadership Academy will continue to provide opportunities for nonprofit leaders to advance various causes, including those of social justice and equality, in the communities they serve around the world.
· Making an Impact Through Giving: The Give2Gether charitable gift matching initiative was expanded significantly through a partnership with GlobalGiving, to facilitate and match donations by colleagues in 30+ locations.
These programs and timelines suggest that Amex recognizes that DEI practices require long term commitment, consistent oversight at executive leadership levels, and ongoing financial investments.
The Forbes article with more details on the survey and corporate DEI programs can be found here: https://www.forbes.com/best-employers-diversity/#5e395a089b9e