Bloomberg Law
Feb. 11, 2022, 11:00 AM

S&P 500 Opens Up on Diversity After Floyd as Investors Seek More

Andrew Ramonas
Andrew Ramonas
Corporate Disclosure Reporter

Large publicly traded companies are ramping up diversity and inclusion disclosures following George Floyd’s murder, as 80% of the S&P 500 now discuss work to achieve equitable businesses in annual reports.

At least 402 companies in the stock index mentioned diversity, equity and inclusion efforts in annual 10-Ks filed with the Securities and Exchange Commission last year, according to a Bloomberg Law review. The list includes companies from Facebook to Walgreens to Nike.

That’s a big jump from as few as 72 companies—roughly 14% of the S&P 500 Index—that spoke about diversity, equity and inclusion in 10-Ks submitted in 2020.

The one-year surge comes as the SEC looks to mandate diversity reporting after it pushed companies to make more robust workforce disclosures in 2020. Investor calls for transparency also have increased after Floyd’s May 25, 2020, murder by a Minneapolis police officer spurred a global outcry over racism and marginalized people.

“We need this information to make smart investment decisions,” said Amy Augustine, director of environmental, social, and governance investing at Boston Trust Walden Co. “We really feel that public accountability incentivizes swifter progress.”

Companies don’t have to mention diversity, equity and inclusion in their annual reports or elsewhere, leading to varying levels of disclosure.

Some companies included statistics about workplace diversity in their 10-Ks. Other companies pointed investors to diversity data and programs in their other reports that face less legal liability and investor scrutiny than 10-Ks.

Bloomberg Law searched for 10-K mentions that included the words “diversity,” “equity” and “inclusion” and various combinations of the words. The review was limited to members of the S&P 500 Index, which tracks 500 of the biggest U.S. companies.

‘Own Up’

Facebook, now called Meta Platforms Inc., was among several companies that disclosed employee diversity data in 10-Ks for the first time in 2021.

The social media giant reported that only 3.9% of its U.S. workforce was Black as of June 2020. But it said it’s seeking to boost the representation of underrepresented groups in its employee ranks, including leadership.

The company, which also owns Instagram and WhatsApp, didn’t bring up diversity efforts once in the 10-K it submitted in 2020 before Floyd died. It did release a report on the topic on its website later that year.

“While we have made progress, we still have more work to do,” Meta said in the 10-K it filed in 2021.

Companies that release diversity data and other detailed DE&I information in 10-Ks send a strong message to investors, said Eleanor Bloxham, CEO of the Value Alliance Co., which advises corporate executives and boards.

“Those that own up to where they are, set targets for where they’re going to be, and seem to actually be working towards that in an open manner, tell investors that they’re taking this seriously,” Bloxham said. “And they are more likely to be proactive in other areas of their business.”

A Facebook representative declined to comment.

Walgreens Approach

Walgreens Boots Alliance Inc. didn’t discuss diversity efforts once in the 10-K it filed in 2020, but changed course in the annual report it submitted last year.

The pharmacy operator omitted workforce diversity statistics from its 10-K and said such data was available on its website. Walgreens instead used a three-paragraph section in its 10-K to summarize work to foster diversity, equity and inclusion.

Those efforts included adding former Obama senior adviser Valerie Jarrett to its board and appointing Rosalind Brewer as its CEO. Both women are Black.

Walgreens knows its DE&I work is “critical to the overall success of our company” and boosted its disclosures to reflect that, a company spokesperson said in a statement.

A separate Walgreens report on workplace diversity said that it’s impossible to understand DE&I at the company through a single data set at one point in time.

The data in the report comes from EEO-1 filings Walgreens and other companies submit to the Equal Employment Opportunity Commission about the race, ethnicity and binary gender makeup of their employees. But the EEO-1 reports use specific job categories that don’t reflect how Walgreens organizes its workforce, the company said.

Companies need to consider the risks and rewards of 10-K disclosures, as well as whether they have the resources to do the reporting properly, said Gary LaBranche, CEO of the National Investor Relations Institute.

Investors look to 10-Ks for a comprehensive picture of how a company is doing in a given year. The reports include financial statements and details about companies’ risk factors, business operations and other information. Misleading disclosures can trigger lawsuits.

“Companies have to carefully weigh and measure everything that they put in their 10-K because it is something that could come back to haunt them,” LaBranche said.

Nike’s Path

Nike Inc. went in a similar direction as Walgreens, though the sportswear giant made no reference to diversity metrics it published outside of its 10-K.

The Beaverton, Oregon-based manufacturer’s three-paragraph diversity, equity and inclusion section included information about goals to increase the number of minority employees and its prioritization of DE&I education.

A Nike representative didn’t respond to requests for comment.

Activist investors have been pushing Nike and other companies to release more information about diversity, equity and inclusion.

Nike shareholders got a proposal to increase DE&I disclosures up for a vote at the company’s annual meeting last year. Nike tried to block the vote, but the attempt was rejected by the SEC.

Nike shareholders ultimately voted down the disclosure plan. But a majority of investors backed other DE&I disclosure proposals at Union Pacific Corp. and International Business Machines Corp. in 2021.

“It’s been kind of a mixed bag from investors, but there have been strong votes in favor of more information,” Bloxham said.

SEC Plans

The SEC is moving closer to giving companies less flexibility with their diversity, equity and inclusion disclosures.

The agency, led by Democratic Chair Gary Gensler, is working on requirements for companies to disclose the diversity of their boards and potentially their workforces. Proposals are expected to come early this year.

The SEC under Republican control in 2020 adopted rules that directed companies to describe “human capital measures or objectives that the registrant focuses on in managing the business” in their 10-Ks. But the agency didn’t force them to discuss diversity if they didn’t want to. Democrats at the time lamented the lack of a diversity disclosure mandate.

“The SEC’s proposed rules are coming sooner than later,” said Raquel Fox, a Skadden, Arps, Slate, Meagher & Flom LLP partner, who focuses on corporate reporting. “Now is the time to prepare.”

To contact the reporter on this story: Andrew Ramonas in Washington at

To contact the editors responsible for this story: Michael Ferullo at; Roger Yu at