AS YOU SOW GETS UNDER THE HOOD ON RACE AND GENDER
Skytop Founder & CEO Christopher P. Skroupa interviews Andrew Behar CEO of As You Sow
April 19, 2021
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Q&A with Andrew Behar and Christopher P. Skroupa
Andrew Behar, As You Sow CEO, has 30 years of experience as a Senior Executive and strategist in the cleantech, communications, and life science sectors. Prior to joining As You Sow, Andrew founded and was CEO of a start-up developing innovative fuel cell technologies. He served as COO for a social media agency focused on sustainability and has been a strategic consultant in the nonprofit sector. He is a member of the board of US Social Investing Forum (US-SIF) and is a member of the UN Sustainable Stock Exchange Green Finance Advisory Group. His book, The Shareholders Action Guide: Unleash Your Hidden Powers to Hold Corporations Accountable, was published in November 2016 by Berrett-Koehler.
Christopher P. Skroupa: Should we focus on some of the research you’ve done on race bias? Would you like to focus on that?
Andrew Behar: Why don’t I give you a tour of the website? I think that’ll be the best way to start. Let me just call this up here and I’ll share my screen. I’m going to show you two different data visualization tools from two different data sets that are interrelated. One is based on workplace equity, so information on diversity, equity, and inclusion. And one is about racial justice. And two different stories about them. The first one on the DEI (Diversity, Equity, and Inclusion) site, if you go down to social justice and you click on that it’ll take you to a page where you’re going to see both Racial Justice and Workplace Equity along with Slavery in the Supply Chain, but we’re going to focus on just these first two.
Christopher P. Skroupa: Okay.
Andrew Behar: So, workplace equity, two years ago, we started to look at what data do we have and how do we evaluate companies, as investors, how do we evaluate companies on their DEI? And we realized there wasn’t enough material, so we wrote an investor’s statement, which is a Workplace Equity Disclosure Statement. That DEI is a material that shareholders need to make a buy or sell decision, and therefore we have the legal right to demand it. And we sent this out to 3,000 companies, and when we sent this out it was about 1.3 trillion, now 1.88 and we’re continuing to get more signatories (how much the signatories represent).
Christopher P. Skroupa: How did this unfold?
Andrew Behar: We sent out these letters to these companies basically saying, you need to disclose, and then we filed around three dozen shareholder resolutions across 5 sectors. And we asked these companies, are you doing this work, and if you are, why are you not disclosing it? What we found is that most of the companies were actually doing the work, like one big bank had 40 people full time in DEI in four regional centers. Others, direct competitors, didn’t know what we were talking about.
Christopher P. Skroupa: What did you learn?
Andrew Behar: So, we saw that there was a big gap. So, we started to gather data on the S&P 500, and about 2 weeks ago we released the first half, so this is the S&P 250, we will be adding the other 250 in February. The first thing we’re looking at are these being broken down by sectors, you can see real estate and industrials at the bottom with Communications and IT at the top, and these are total scores. So, you can click on a sector and it’s going to take you to a second level here, and basically a second level where you can create queries.
Christopher P. Skroupa: What are you focused on with the scoring?
Andrew Behar: Right now, we’re looking at communications and total score, but you can look at communications and promotion rate, and you can see Twitter is the only one who discloses at all. To put a fine point on it, this is done they disclose, not what they disclose since there’s so little disclosure.
Christopher P. Skroupa: Take us further.
Andrew Behar: You can also filter by market cap, number of employees, region, etc. Let’s go ahead and click through, now we’ve selected one company, Google, number 2, out of 250, and scores number one out of its sector, communications services companies.
Christopher P. Skroupa: How detailed does this get?
Andrew Behar: Now I’m going to scroll to the bottom to show you the actual raw data. What you’re looking at here is the actual Workforce Composition, do they disclose, yes, they put out an EEO-1, equal employment opportunity. That data is helpful, but we see that as a baseline, a lot of companies see that as a huge amount of disclosure, but we see that as a good start. Since if you’ve ever looked at an EEO-1, it doesn’t go very deep, and here is where it doesn’t go deep. Now we’re looking at the pay gap, we want to see mean and median pay gaps by gender and mean and median pay gaps by race. We can also see promotion rates by male, female, white, black, Hispanic, Asian, Native American and Other. You’ll see again, promotion, recruitment, and retention, and you can see where they disclose, where they don’t, and at the end, we have explicit diversity.
Christopher P. Skroupa: And, then what do we learn?
Andrew Behar: When companies disclose all this, we can actually see what they’re about, and you can see a visual with this chart. We have the ability to overlay–for example– Allstate and Amazon, and now you can see it graphically.
Christopher P. Skroupa: This is helpful for peer-to-peer reviewing.
Andrew Behar: You can see what companies are doing what, so when we go talk to them, we have an idea of what’s going on. So that’s diversity, equity and inclusion. Around May, George Floyd was murdered, and we felt we had to do something, so we wrote a statement confirming that we are an antiracist organization. What we do best is that we get companies to change their policies and practices. How do we do that? So, we hired a person to run this group, Racial Justice Initiative. And we started to look at these issues, and again we built a tool that let us gather data.
Christopher P. Skroupa: Separating the authentic from the cosmetic?
Andrew Behar: We looked at the statements companies were making initially, we looked at what they said in the statements, just all the things about the statement, do they call out systemic racism. Do they name Goerge Floyd or another victim? Then we looked at their policies and practices, again we look at sectors where you can filter through, I’ll look at Alphabet (Google) again just because we looked at the other one. So here you see Alphabet is 5 out of 250, going to skip down to the KPI, the key performance indicators. So, these three boxes are the statement. Did they make a statement, yes/no, did they post a statement and where, did they post it online? Did the staff post it on Facebook? Did they hide it basically?
Christopher P. Skroupa: And….
Andrew Behar: Did the CEO take responsibility? Did they name the victims? Did they state if Black Lives Matter? Did they state they were anti-racist? These types of things, the statement is only 20% of the score, so even if you have a great statement, we care more about what a company is actually doing.
Christopher P. Skroupa: Is this revealing!
Andrew Behar: So, here’s what they do, do they have a DEI Department? Does the DEI manager have a senior management level? Do they look at cross-organizational targets? Do they make donations to racial justice foundations? Are they a member of #StopHateForProfit? Have they boycotted Facebook? We review them internally and grade them.
Christopher P. Skroupa: This will help make the DEI leader’s job more effective.
Andrew Behar: You can see Alphabet got a pretty good grade and we can use the same tool to compare them to Amazon, let’s compare them to Apple too. Again, you can see which companies are doing better, and which companies are not, and this shape helps us when we go to engage the companies. So, between these two looks, we realize we have a long way to go in just data, and here’s another way to look at the top 10 and bottom 10 in terms of logos, to get a sense of more tension.
Christopher P. Skroupa: What’s next?
Andrew Behar: What’s next is that we’re going to start the engagement process, we’re filing resolution documents with a bunch of companies with a direct competitor that got a 60 and they got a 6 and ask why? And invite them onto the path, that there is a path where they shift their policies and practices to ones specifically designed to eliminate systemic racism from their internal systems, and by virtue of that, greater society. Anyway, this is the work we’re doing.
Christopher P. Skroupa: The website certainly adds to your engagement process and allows you insights faster and on an ongoing basis.
Andrew Behar: Thank you, and as I said, we’ll be releasing the full S&P 500 in February and reach out to a ton of companies this year. You really need to talk to them to get a true sense of what they’re thinking about.
Christopher P. Skroupa: Do you feel that there’s a lot of window dressing in this space where companies want to be perceived as being open and inclusive, and yet when you look at the data that they fall short of hitting your head on the ceiling?
Andrew Behar: Because we’re only looking at disclosed data, do they disclose? Since not many disclose and only look at data from those who disclose, it’s hard to make a statement about the content. But we’ve seen this before, every time we start looking into an area. In 2006 we published the first report on recycling. We gave every company an F since they didn’t disclose and we had no idea if they did or not. And when they all freaked out that they got F’s, they got in conversations with us and realized what was going on. Then we did another report and some companies who didn’t disclose before got C’s, and began working with them throughout the years, we’ve now done 6 reports and have expanded into fast food. But this is the first step, just transparency for investors. So, we can begin to compare companies in an apples-to-apples way, it’s very difficult.
Christopher P. Skroupa: Yes. It’s interesting to make this baseline.
Andrew Behar: Well, SASB does that as well, SASB’s whole intent is sustainability and comparability. Standardizing human capital management data sets, you can say this company is outperforming this one. We’ve been working with SASB for the past 2 years, and every company will be disclosed, with SASB requirements, probably this year, so that will help a lot.
Christopher P. Skroupa: It’s interesting looking at this in the context of white pride and other groups we’ve learned more about over the past year. Now, there’s this backlash from this particular group of people who don’t want to care about this, and it’s really interesting since we do so much business overseas, we get so many questions about what is going on with these kinds of topics. I think this is interesting because you can start to dig deeper to what are the underpinnings of some of these topics and how do they relate. Have you done this for gender yet?
Andrew Behar: Well, gender is a part of DEI, it’s also a part of equality. There’s a group called Equally, out of New Amsterdam. We work with them on a gender equality fund, and they do a really good job on 19 gender performance indicators.
So, you’re filing now, going to get them to the table, and pressuring some companies that aren’t reporting to disclose, as their peers are, and that gives them a leg up with investors.
Christopher P. Skroupa: Yes, this is core to your strategy—peer pressure.
Andrew Behar: That’s our playbook. One, is there enough data? If there isn’t, work on disclosure. As soon as you disclose and have enough data you can start to work on efficient practices. Publish those best practices, call out the leaders who told you what they’re doing, then compare to the laggards in the same sector. This competition drives the sector, moves sector to sector.
Christopher P. Skroupa: Raise the bar, raise the baseline.
Andrew Behar: That’s our goal, that’s what we do.
Christopher P. Skroupa: Congratulations on a great process.
Andrew Behar: Once companies get to know us, and realize we’re not a threat, and that we’re actually the opposite. We’re helping them see a risk and actually mitigate it before it becomes fully blown. The interesting part is talking to companies like this one bank, 40 people, recruiting people of color, young people of color, in eleventh grade. They have summer camps set up to train them, they help them with their SATs, they help them get into college, they tell which courses to take and totally groom them and put them in the field with a job. And what’s interesting is, it also protects them from actual diversity of thought because everyone has been trained the same way. However, they have more diversity of experience since they grew up in not-so-affluent areas, so the diversity gets in with how the program is set up alongside this uniformity of training, but the people in the program they would’ve never gotten otherwise so that’s the tradeoff.
Christopher P. Skroupa: You know, problem-solving is managed very differently with people, they don’t always use the same formula. How do you allow multicultural associations to feed into your workplace because it enriches, but there’s this fear that the outlier comes in and blows your system up? I think it’s interesting from a retention perspective because you have to let people be who they are in the framework of the position that they’re in. And you want them to be able to put some of these things forward. We’ve been doing a little of that. Whoever is able to make that magic work well, needs to bottle it, and distribute it globally, and all of us can go home, as all problems are solved.
Andrew Behar: I agree.
Christopher P. Skroupa: It’s interesting and I’m glad that you’re focused on it because unfortunately, it underwent a significant challenge with the previous administration.
Andrew Behar: He fired 33,000 DEI trainers that were training 30 million federal employees. He fired them. I mean wouldn’t it be great to have sensitivity training?
Christopher P. Skroupa: This has been helpful. Beyond the tour, it helps to drill down what investors might look at and how they might engage on socially sensitive topics. Thank you, Andy.