WHEREAS: Racial equity audits engage companies in a process that may unlock value, uncover blind spots, and strengthen external relationships.
Leaders of important racial justice organizations across the United States have called for companies to conduct racial equity audits. The best practices these organizations identified for completing these audits are:
1)Select an independent person or firm with civil rights and racial justice expertise and adequate resources to complete the audit.
2)Ensure the audit comprehensively examines how corporate policies, practices, and products can ameliorate or exacerbate racial inequalities. Audit processes should proactively identify and engage in outreach to a wide range of stakeholders such as civil rights organizations, employees, and customers impacted by racial inequity.
3)Publish audit findings, recommendations, and progress reports with action plans with timelines to address identified issues.1
At least 19 corporations have committed to or are in the process of completing racial equity audit.
MetLife states that the company is “...committed to being a more inclusive company and to making a positive difference toward racial equity more broadly.”2 The company has made commendable steps in line with this statement, such as creating a diversity, equity, and inclusion council and setting goals around investments with diverse firms and suppliers. The company has also committed to supporting research to advance the understanding of equity issues.
From a regulatory perspective, insurance companies are incentivized to be proactive and attentive to race equity issues. In 2022, the National Association of Insurance Commissioners launched an effort to address identified biases that exist within insurance, including predictive models and algorithms, as well as the marketing, underwriting and handling of insurance claims.3
Investors have reason to be concerned with MetLife, in particular. In 2002, New York state insurance regulators traced MetLife’s use of racists and discriminatory practices back to the 1880s and MetLife agreed to compensate minorities who were sold substandard policies as much as $160 million.4 Race-based missteps have continued; in 2017, MetLife reaching a $32.5 million settlement with its former Black employees after a class action alleged the company “hinder[ed] their ability to get lucrative accounts, team up with colleagues, and receive training opportunities.”5
We urge the company to conduct a racial equity audit to fully examine its relationship with racial equity issues, and to identify the risks and opportunities it faces. We believe a thoroughly developed understanding of its racial equity impacts, alongside a strategy to address any identified concerns, will support the long-term success of MetLife.