WELLS FARGO & COMPANY | Racial equity audit

AGM date
Previous AGM date
Resolution details
Company ticker
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
Company sector
Company HQ country
United States
Resolved clause
RESOLVED that shareholders of Wells Fargo & Company (“WFC”) urge the Board of Directors to oversee an independent racial equity audit analyzing WFC’s adverse impacts on nonwhite stakeholders and communities of color, excluding impacts related to WFC’s philanthropic and diversity, equity and inclusion (“DEI”) efforts, and describing the steps, if any, WFC plans to take to mitigate those impacts. Input from civil rights organizations, employees, and customers should be considered in determining the specific matters to be analyzed. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on WFC’s website.
Supporting statement
High-profile police killings of black people—most recently George Floyd—have galvanized the movement for racial justice. That movement, together with the disproportionate impacts of the pandemic, have focused the attention of the media, the public and policy makers on systemic racism, racialized violence and racial inequities.
In June 2020, WFC announced initiatives to improve workforce diversity and inclusion, and invest in black-owned businesses.1 WFC recently declared that it had commissioned an independent racial equity audit, but the scope of the audit appears to be quite limited.
WFC stated that the audit will “focus on elements of Wells Fargo’s efforts to serve diverse communities and promote a diverse workforce.”2 The examples WFC provided of those efforts were limited to philanthropy, small investments in and transactions with black-owned businesses, and DEI initiatives involving the workforce. The descriptions of those topics touted benefits WFC had provided to diverse communities, but did not identify any adverse impacts, the core request of this proposal.
We refiled this proposal to ask WFC to broaden the scope of its contemplated racial equity audit and undertake a comprehensive audit focused on adverse impacts. We believe that efforts by a company to address racial injustice must begin with identifying adverse impacts of the company’s policies, practices, and actions, which provide a roadmap for mitigating existing harms and preventing harms from being inflicted in the future.
Additional areas to consider, including in a comprehensive audit focused on adverse impacts, are the effects of lending and underwriting policies and practices, the implications of supporting police foundations, and the impacts of WFC’s political contributions and lobbying. Last year’s proposal documented racial disparities in lending, donations to police foundations, and contributions to members of Congress who objected to certifying the 2020 presidential election results. Recently, WFC helped underwrite bonds issued to construct two prisons in Alabama, where half the inmates are black despite making up only 25% of the state’s population and where conditions are so violent that the Justice Department sued the state in 2020.3
A comprehensive racial equity audit would help WFC identify, prioritize, remedy and avoid adverse impacts on nonwhite stakeholders and communities of color. We urge WFC to assess its behavior through a racial equity lens in order to obtain a complete picture of how it contributes to, and could help dismantle, systemic racism.
1 Seehttps://stories.wf.com/wells-fargo-ceo-a-watershed-moment/2 https://newsroom.wf.com/English/news-releases/news-release-details/2022/Wells-Fargo-to-Commission-Third- Party-Racial-Equity-Audit/default.aspx3 https://www.newyorker.com/news/q-and-a/the-stunning-neglect-and-racist-politics-behind-alabamas-prison- strike

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