Governor Kathy Hochul can strengthen New York’s leadership in ensuring equality in the workplace by signing legislation that would harness the power of data to promote diversity and free market capital flows to accelerate change.
This is how the legislation (A.8449/S.8435) can contribute to a more inclusive, competitive, and profitable business landscape in New York: Many corporate stakeholders and investors such as large pension funds and foundations, as well as individual investors, want to know whether companies whose they own the stocks and bonds create a diverse workplace. These investors, who are often leaders in the responsible investment movement, want to hold companies accountable for building a more inclusive and diverse workforce and reducing the gender and gender pay gaps. breeds. These investors want to reward well-run companies that address these issues with their holdings. They also want to engage with companies that are not making progress and potentially sell their securities if those companies are not making progress on diversity, equity and inclusion metrics.
Here’s the problem: Despite growing investor demand for this kind of data, it remains publicly inaccessible to many companies, even though companies with more than 100 employees already provide this data to the federal government. The Equal Employment Opportunity Commission requires these companies to submit employee data by race, ethnicity, gender and job category using a form called EEO-1, but the EEOC does not disclose this data to the public.
The legislation, sponsored by Congresswoman Amy Paulin, D-Westchester, and Senator Leroy Comrie, D-Queens, brings transparency by requiring New York companies that already provide this data to the federal government to share their EEO-1 form with a New York. state agency that will make this data publicly available.
Well-run companies that address important social issues in the workplace are more likely to perform well, manage risk effectively and generate healthy returns for investors. Various studies show that more diverse companies perform better. It’s good for businesses, workers and investors.
The data made public by this legislation will also help consumers make better choices. For consumers who want to support businesses that are becoming more inclusive, they will have the data they need to make those choices better.
Moreover, once this data is made public, a virtuous circle of capital flows will be triggered in New York. Capital flows from responsible investors will flow to companies that are growing. As the broader investment community realizes that inclusive businesses are more likely to be profitable, capital flows will increase and reinforce positive change.
Once Hochul signs this legislation, no CEO in New York with more than 100 employees will be able to hide the true state of workforce diversity at their company. Considering that New York is tied with California for the most Fortune 500 companies, this legislation has a significant and positive national economic impact. This legislation has the ability to accelerate change in some of the most important companies in the country, and it will be transformative. I encourage Hochul to sign this legislation without delay.
Jonathan Lewis, of Scarsdale, is chairman of Signatory Capital Advisors.