SVB FINANCIAL GROUP | Racial Justice Audit at SVB Financial Group

Status
34.64% votes in favour
AGM date
Proposal number
4
Resolution details
Company ticker
SIVB
Lead filer
Trillium Asset Management
Resolution ask
Conduct due diligence, audit or risk/impact assessment
ESG theme
  • Social
ESG sub-theme
  • Diversity, equity & inclusion (DEI)
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
United States
Resolved clause
Resolved, shareholders urge the board of directors to oversee a third-party audit (within a reasonable time and at a reasonable cost) which assesses and produces recommendations for improving the racial impacts of its policies, practices, products, and services, above and beyond legal and regulatory matters. Input from stakeholders, including civil rights organizations, employees, and customers, should be considered in determining the specific matters to be assessed. A report on the audit, prepared at reasonable cost and omitting confidential/proprietary information, should be published on the company’s website.
Whereas clause
To combat systemic racism, corporations should recognize and remedy industry- and company-specific barriers to everyone’s full inclusion in societal and economic participation. Racial gaps cost the U.S. economy an estimated $16 trillion over the past twenty years. Closing the Black- and Hispanic-white wealth gaps could add 4-6% to U.S. GDP by 2028.

More than one year after many companies made commitments to racial justice, the practical outcomes remain unclear. Fifty corporate pledges totaling $49.5 billion were characterized as falling short of addressing systemic racism after an August 2021 analysis. Shareholders lack independent assessments that racial equity strategies are impactful, address appropriate topics, and unlock growth.

Addressing systemic racism and its damaging economic costs demands more than a reliance on internal action and assessment. Audits engage companies in a process that internal actions alone may not replicate, unlocking hidden value and uncovering blind spots that companies may have to their own policies and practices. Company leaders are not diversity, equity, and inclusion experts and lack objectivity. Crucially, a racial justice audit examines the differentiated external impact a company has on minority communities.

Given the many companies across sectors embroiled in race-related controversies, any company without a comprehensive third-party audit and plan for improvement of its internal and external racial impacts could be at risk. Companies such as Facebook, Starbucks, and Blackrock have committed to such audits, and guidelines have been developed by practitioners.

SIVB claims over 50% of venture capital-backed startups in the United States as clients. The rate of inclusion in the startup and venture capital space is low: only 2.6% of funding went to Black and Latinx founders in 2020.6 In September 2020, SIVB released its plans to hire a Chief Diversity Officer and address barriers to financial inclusion through individual initiatives, but the theory of change and whether these are the most salient mechanisms is unclear. SIVB conducting an audit would ensure equity and accountability in implementing its strategy, particularly in its business operations, where it has the most tangible outcomes on structural racism. Of particular interest is how the company is conducting due diligence in its investments and lending to ensure that it is not exacerbating racism. SIVB also does not provide comprehensive diversity reporting.

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