More companies are publishing race metrics in response to a social media campaign urging them to publicly report the number of black employees and executives in their organizations. This signals potential momentum in the historically slow pace of companies disclosing diversity information and offers further evidence of a rising emphasis on the "S" in the environmental, social and governance movement.

Corporate America reacted to the death of George Floyd and subsequent nationwide protests with statements condemning racism and pledging support for the black community. An Instagram account, @pullupforchange, called on companies to go a step further and "Pull up for Change" by posting information about their workforces.

The page has gained 115,000 followers since launching June 3 and received more than 125 corporate responses. Most are from cosmetic and personal care brands, which tend to have a large social media presence. S&P 500 companies, including The Estée Lauder Companies Inc. and Coty Inc., have made disclosures. The page's founder, Sharon Chuter, is founder and CEO of cosmetics brand Uoma, a part of Ulta Beauty Inc.

Outside of the glossy, Instagram-friendly cosmetics world, more staid brands are using other social media outlets to respond to racism. James Gorman, the CEO of Morgan Stanley, released a statement on LinkedIn making five commitments to diversity and inclusion activities, while BlackRock Inc. CEO Larry Fink posted on the platform that the "deeply painful" past few weeks for the black community have left him "appalled."

"It's necessary that companies publish these statements. I think the time is now. But it's not sufficient in terms of addressing the systemic racism within their own organizations," said Natasha Lamb, managing partner and director of equity research and shareholder engagement at Arjuna Capital LLC, a firm focused on sustainable and impact investing.

"It takes all kinds of pressure. Social media is important. Public policy pressure is important. Employee pressure is important and investor pressure is important," Lamb said in an interview when asked if the social pressure pushing companies to take part in the Pull Up for Change movement will be enough to enact tangible change. "When all of those actors are pressing for the same thing, the likelihood of success is far higher.”

'Lack of data'

The "S" in ESG has garnered increasing attention in 2020. The coronavirus pandemic brought issues like worker safety and customer well-being into the headlines. Many companies pledged not to lay off employees during the COVID-19 crisis, offered forbearance to customers impacted by the pandemic or donated goods and services to their communities. The May 25 death of George Floyd while in police custody brought systemic racism into sharp focus for Corporate America, investors and the public. Companies pledged money to fight inequality and re-upped their focus on diversity and inclusion.

The @pullupforchange account thanked companies for their pledges in solidarity with the Black Lives Matter movement but asked for more tangible commitments to diversity.

"You all have statements and policies about being equal opportunity employers, so show us the proof," Chuter wrote.

There has long been pressure on companies to disclose information about racial diversity in their organizations. Arjuna has been submitting shareholder proposals calling on companies to publish their gender and racial pay gaps since 2016.

But progress has been slow, and reports on racial diversity can be "unflattering" Lamb said, which may discourage companies from disclosing this information. "You should get ahead of the curve and be proactive on this issue, not reacting to others telling you what to do. And at the end of the day, that's what we're looking for — company leadership, not followership," Lamb said.

In recent years some of the world's largest asset managers, including BlackRock, Vanguard Group Inc. and State Street Global Advisors Inc., have made board diversity a focus. But disclosure remains a problem when it comes to understanding diversity at companies. Many diverse attributes, like sexual orientation and ethnicity, are impossible to identify if a company does not self-report.

"Race and ethnicity — that's not a required disclosure from the SEC so not all public companies will disclose it. So obviously there's going to be a lack of data because of that," said Amit Batish, manager of content and communications at executive compensation and corporate governance data firm Equilar.

But as pressure from investors, legislators and the media rises, the number of companies disclosing information about race and ethnicity is slowly increasing. A report from Equilar found that 58% of companies in the Equilar 100, an index of the 100 largest U.S. public companies by revenue, disclosed the racial or ethnic composition of their boards in 2019 proxy statements — a number that was up from 53% in 2018.

There are also pockets of legislative pressure emerging in the U.S. In August 2019, the governor of Illinois signed a law requiring public companies headquartered in the state to disclose the race, ethnicity and gender breakdown of their boards in a push to address the underrepresentation of women and minorities in positions of corporate power.

"This low representation could be contributing to the disparity seen in wages made by females and minorities versus their white male counterparts," the law states. "Increased representation of these individuals as directors on boards of directors for corporations may boost the Illinois economy, improve opportunities for women and minorities in the workplace, and foster an environment in Illinois where the business community is representative of our residents."

Both Lamb and Batish note that companies also stand to benefit from more diverse leadership.

"Diverse boards, diverse companies — they perform better. It's statistically proven," Batish said. "Companies should strive for equality to align with societal issues. They should also consider that having diverse companies, diverse boards are going to lead to fresh perspectives, new ideas that they haven't seen before, and ultimately higher performance."