Amazon to conduct US racial equity audit after shareholder pressure

Amazon has commissioned an audit, led by former US attorney-general Loretta Lynch, to look into “disparate racial impacts” from its employment practices on its US frontline workforce.

The decision follows pressure from shareholders who had accused the company of putting a disproportionate number of workers of colour in harm’s way in its warehouses, where injury rates are higher than the industry average.

Ahead of Amazon’s annual meeting in May, the New York State Common Retirement Fund, one of the largest public pension funds in the US, put forward a shareholder proposal that called for an independent audit that would break down safety data by race, gender and ethnicity.

“Given its racially and ethnically diverse warehouse workforce, Amazon’s higher illness and injury rates may have a more pronounced impact on workers of colour,” the group argued.

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Amazon urged shareholders to reject the proposal, according to a recent regulatory filing, saying it had already commissioned its own audit, to be conducted by attorneys at Paul, Weiss, Rifkind, Wharton and Garrison. Lynch – a partner at the firm, who served as US attorney-general during the Obama administration and was the first black woman to hold the job – will lead the effort.

“The focus of the audit will be to evaluate any disparate racial impacts on our nearly one million US hourly employees resulting from our policies, programmes, and practices,” the filing read.

Timeline

Amazon said in the filing that it would release the results from the audit when completed, but did not offer a timeline.

The audit will not include subsidiaries, such as Whole Foods, or any of the company’s delivery drivers who are hired via third-party contractor groups, a spokesperson said.

The audit is the latest announced by a major company to act on investor pressure regarding civil rights in the wake of the murder of George Floyd in 2020.

In March, Apple’s investors voted in support of calls to conduct an audit analysing the company’s policies and to provide “recommendations for improving the company’s civil rights impact”. Meat-packing giant Tyson Foods and JPMorgan have announced similar moves.

A spokesperson for the New York retirement fund said it looked forward to learning more about Amazon’s audit, but that it remained “concerned that the company has provided few details and has made no assurances that the audit will be independent”.

The spokesperson said the fund would be open to discussing withdrawing its proposal, but only if Amazon could provide certain commitments about how the audit would be conducted.

The group had called a similar vote at Amazon’s annual meeting in 2021, which lost but attracted 44.2 per cent approval, a strong showing in a process that typically results in overwhelming backing for management’s recommendations.

Current disclosures have given an inconsistent picture of racial diversity at Amazon. Black and Latino workers made up just under half of Amazon’s frontline workforce in 2020, the latest data available. But that representation falls at a corporate level to 15 per cent. Senior leadership is 71 per cent white.

News of the audit was first published by Bloomberg. – Copyright The Financial Times Limited 2022