BlackRock is committed to doing its part, consistent with our purpose, to help build a better, fairer society. This commitment to make change is core to who BlackRock is and the difference we can make in the world. Below is a memo to BlackRock employees with an update on our plans to promote racial equity and inclusion.
We wrote to you three weeks ago about the need to take meaningful action to accelerate BlackRock’s commitment to racial equity. Since then, colleagues across the firm have been engaging in a powerful dialogue about what we can and should be doing as individuals, a firm and an industry to help drive real change. This commitment to make change is core to our purpose, to who BlackRock is and the difference we can make in the world. It is also something our clients are looking for us to do. BlackRock should reflect the rich diversity of our clients. So, change must start here at BlackRock, and we know we have a great deal of work to do. Progress will require a long-term effort with sustained focus and persistence. We don’t have all the answers today, but we are moving forward with a strong sense of purpose and resolve, and we will continue to learn and adapt.
Today, we want to provide an update on the firm’s action plan in three key areas:
- BlackRock Talent and Culture
- Our Role as a Fiduciary on Behalf of our Clients
- Policy and Social Impact in the Communities Where We Operate
Our commitment to racial equity and inclusion extends to every market in which we operate. Diversity manifests itself differently in different parts of the world, but we will pursue it across the globe. For example, in the UK today, we announced that we were signing the “Race at Work Charter” led by The Prince’s Responsible Business Network, committing to measure, disclose and advance ethnic and racial diversity and equality in our UK workforce. So while some of the immediate actions outlined in this memo are focused on the US, we plan to execute against each of our three major pillars globally.
1. BlackRock Talent and Culture
Although our planned incoming summer and graduate analyst classes are the most diverse in BlackRock’s history (with 38% of summer analysts and 30% of our program analysts in the US identifying as Black and Latinx), we are not where we want to be. We need to continue to enhance all aspects of diversity at BlackRock. Many of the actions here are specifically focused on Black professionals, but they will promote improved recruiting and management of all diverse talent and enhance the inclusivity of our culture so that everyone has the chance to fulfill their potential.
By 2024, our goal is to double representation of our Black senior leaders and increase overall representation by 30%. Today, only 3% of our senior leaders (directors and above) and 5% of our workforce in the US are black. We need to do better, and we will achieve an increase through five key actions:
- Actively guiding and developing the careers of our Black Professionals through senior leadership’s commitment to grow our emerging Black leaders; tailored leadership development and sponsorship programs, including a new Black Leadership Forum; targeted rotational programs for early-career Black professionals; and deliberate consideration of senior Black leaders in succession planning.
- Focusing on people manager development and rewarding proactive inclusion and improved diversity outcomes that increase Black Professional career progression and retention rates, and that increase the proportion of managers who identify as Black.
- Increasing our commitment to recruiting and onboarding Black Professionals by requiring racially and ethnically diverse candidate slates for open roles at BlackRock, applying sourcing and selection strategies used in campus recruiting to all analyst and associate hiring, appointing a Diversity Sourcing Lead for experienced hires, and designing a more structured onboarding process across all experience levels.
- Raising awareness of racial equity issues and resetting behavioral expectations by extending our new speaker series on racial inclusion and equity and requiring a new mandatory “racial equity” course for all BlackRock employees via the BlackRock Academies.
- Embedding accountability and improving tracking and measurement of diversity metrics and holding leaders and managers accountable for continued progress, including in the Quarterly Business Reviews and year-end processes.
To ensure we all stay focused on these goals over time, we have appointed a subset of the Global Executive Committee to oversee progress.
2. Our Role as a Fiduciary on Behalf of our Clients
We have long believed that in serving our clients we can have a positive impact on society. That is fundamental to BlackRock’s purpose. Research shows that companies with strong sustainability ratings, which includes diverse workforces, deliver better returns, and we are seeing more and more clients focused on these social issues in their investments. In addition, we believe that diversifying the companies we partner with to serve our clients helps us to deliver better outcomes. Through our emerging brokers program, for example, last year we traded $110 billion through Black and Latinx owned firms and helped to enhance market liquidity.
To better serve our clients, we will focus on racial equity and social justice in our investment and stewardship activities. While we are still refining our efforts and goals, our focus is on three key areas:
- Increasing our partnerships with minority business enterprises that support our client investment activities, including minority brokers for trading, external managers in our solutions and fund of funds businesses, and third-party vendors across the rest of the firm.
- Developing and launching products focused on racial equity and social justice across our active platform, private markets and iShares and index businesses.
- Promoting workforce and leadership diversity by engaging with and seeking reporting by the companies in which we invest. In January, we asked companies to publish disclosure aligned with the Sustainability Accounting Standards Board (SASB), which includes disclosing the racial and ethnic characteristics of their US workforce. This fall, as we assess the impact of companies’ response to COVID-19 and associated issues of racial equality, our stewardship team will be refreshing our expectations for human capital management and how companies pursue sustainable social practices more broadly. We also will continue to emphasize the importance of diversity in the board room, considering personal characteristics like gender, as well as race and ethnicity, in addition to professional experience.
3. Policy and Social Impact in the Communities Where We Operate
Public Policy – Thanks to the leadership of Claude Wade, Head of our new Atlanta office, we were proud to be one of the first companies to endorse the Georgia Hate Crimes Legislation earlier this month, which more than 300 companies have now signed on to support. We will strive to continue using our voice to advocate for public policy changes that promote social justice by:
- Continuing to drive and contribute to public policy and legislative outcomes, joining with other organizations that share our values to promote public policy that can make positive change.
- Continuing to lead the industry with transparency on diversity disclosures. Disclosure on the diversity of BlackRock’s workforce can be found here and on our Board here. Our SASB disclosure can be found here.
Social Impact – In February, we established the BlackRock Foundation to augment our efforts to promote a more inclusive and sustainable economy. Through our focus on financial security for vulnerable communities, we aim to bring visibility and increased resources to support the upward mobility of Black and Latinx communities. Our $10 million action plan includes:
- Deploying $5 million to organizations supporting racial equity. In the coming weeks, we will announce contributions of $2 million to national organizations focused on securing equal justice for Black and Latinx communities; and $3 million to local grassroots organizations in major US cities where we operate including New York, Atlanta, Los Angeles and San Francisco, selected in partnership with employee-led task forces in those cities.
- Launching a $5 million fund to help elevate Black and Latinx social entrepreneurs to advance economic mobility in communities where we operate. In parallel, we will increase the transparency and reporting of our grant funding along with the criteria used to evaluate our potential partners.
- Doubling support for employee giving. The firm and our people donated $1.9 million over the past three weeks through our 2:1 employee match program to organizations fighting racial inequality. To extend the impact of our people’s giving, earlier this month we doubled the annual cap on the amount the firm matches in philanthropic giving per employee from $5,000 to $10,000.
The process of building a more just and equitable society will not be easy or quick. Driving real change requires long-term commitment and that all of us push beyond comfortable boundaries. We must begin the journey examining our own culture and talent practices, but we cannot be content to stop there. We must use our voice and work with others to advocate for change within our industry and across society more broadly.
BlackRock is committed to doing its part, consistent with our purpose, to help build that better, fairer society. We want to thank you all for the resolve and willingness you have demonstrated over the past few weeks to be part of that change. It is up to us to hold ourselves accountable to ensure we continue to make measurable progress. We ask that all of you commit to continue pushing forward with us in that effort.
This article was originally published on LinkedIn on June 22, 2020. You can learn more about BlackRock’s commitment to Inclusion and Diversity on our careers website.