Big Companies Disclose Details on Gender, Race in Workforces

These disclosures and dozens of others like them—many from company securities filings—are voluntary but nudged by a new Securities and Exchange Commission regulation, along with investor interest. They also reflect a new focus among many companies on workforce diversity following last summer’s protests over discrimination, racial inequity and the death of George Floyd while in police custody.

“I can’t say that we have a client that hasn’t talked about it in the boardroom,” said Deb Lifshey, an attorney at executive-pay consultant Pearl Meyer & Partners LLC. “All companies are focused” on diversity, she added.

The Wall Street Journal reviewed more than 160 annual reports filed by S&P 500 companies for 2020. About a third included diversity disclosures, though the details varied widely. Most provided a tally of women in their workforces. Almost three-quarters disclosed at least some information on racial and ethnic diversity—often a combined count of nonwhite employees. A few provided data on veterans, younger or older workers, people with disabilities and those who identify as gay, lesbian or transgender. Some provided figures only for their corporate boards.

In their annual reports, both PepsiCo. PEP -0.62% Inc. and Mondelez International Inc. MDLZ -1.63% disclosed that around 40% of managers globally were women. PepsiCo also said 43% of its U.S. workers were “racially/ethnically diverse individuals.” Mondelez didn’t share demographics for nonmanagers.

Mondelez said it plans to publish more demographic data in the spring. A PepsiCo spokeswoman said additional details about its workforce, broken down by race and gender, could be found on its website.

Some institutional investors are pressing for better information on workforce diversity. Many are starting to incorporate details into rankings or investment decisions.

Human capital—the corporate workforce—now outweighs factories and equipment for much of the economy, said John Hoeppner, head of U.S. stewardship for Legal and General Investment Management. The U.K.-based firm, which manages about $1.5 trillion in assets world-wide, has begun to invest less in companies with low numbers of female managers and uses outside estimates for companies that don’t disclose demographic data.

His firm points to data collected by McKinsey showing the 25% of companies with the least diversity by gender and race are more likely to financially underperform industry averages. “It is absolutely about financial performance,” Mr. Hoeppner said. “More diversity has higher probability of better results.”

Another factor: an SEC mandate adopted in August, which requires companies to begin disclosing information about their “human capital resources”— a broad area that can encompass anything from turnover rates and training programs to safety and diversity statistics.

The rule gives companies wide discretion over what to include, and more than 100 firms in the Journal analysis chose to say little about demographics. But others are enhancing workforce-diversity disclosures, Ms. Lifshey said, adding: “It was something that was already in motion, and this just pushes it a little bit further.”

Companies privately report diversity data to the U.S. Equal Employment Opportunity Commission. Businesses increasingly say they will make these EEOC reports publicly available. In July, New York City Comptroller Scott Stringer called on 67 of the biggest public companies to publish the reports, and by September just 14 had. Today, 54 do or have committed to doing so, his office says.

Tech companies have for years issued stand-alone diversity reports. This year they were joined by General Electric and PricewaterhouseCoopers, among others.

GE revealed that 22% of its global employees were women, along with 26% of its leadership. In the U.S., about 76% of the workforce was white, as was 81% of the company’s leadership. A GE spokeswoman said the company is committed to building a more diverse workforce and the disclosure is a first step.

The widening disclosures help add substance to pledges by many executives last year to give priority to diversity, said Sheri Wyatt, a PwC partner who advises companies on environmental, social and corporate-governance issues and helped compile the company’s inaugural diversity report last fall.

“Transparency leads to greater accountability,” Ms. Wyatt said. Among other details, PwC said its workforce was 48% female and 60% white, while its U.S. leadership team was 30% female and 70% white.

The accumulating disclosures underscore some contrasts among similar companies. Consider three big consumer-products rivals:

— Church & Dwight Co. CHD -0.81% provided one workforce demographic in the annual report it filed with the SEC this month: 41% of its global workforce was female.

— Colgate-Palmolive Co. CL -1.94% gave two data points on women in its global workforce in its annual report—they made up roughly 40% of executives and employees overall. It also gave a breakdown of U.S. workers by race: 67% were white. The company’s website and a separate report with a decade of data gives more detail.

— Procter & Gamble Co. PG -2.41% , the biggest of the three companies, didn’t include figures when it filed its annual report in August before the SEC’s new requirement kicked in. On its website, the company provides dozens of figures on the gender and racial breakdown of its workforce, managers, top executives and board members.

Like its competitors, 40% of P&>’s global workforce was female. So were 48% of its managers generally, and 46% of its board. About a quarter of its U.S. employees weren’t white, along with 30% of management and 31% of its board, the company’s figures show.

“Planning, intentional development and tracking our results are some of the ways we are working to build a more diverse pipeline at every level in the organization,” P&> said. It posted its EEOC report online for the first time in the fall.

Colgate plans to disclose more information with an annual diversity report due out this spring and has posted its EEOC report online, a spokesman said. A Church & Dwight spokesman said significantly more data will appear this spring in the company’s annual proxy statement and a separate sustainability report.

Consultants and attorneys predict that, over time, human-capital disclosures are likely to converge, much the way free-form securities-filing sections describing executive compensation strategies and other subjects have in recent years.

That could accelerate under a Nasdaq proposal to require more disclosure about board-member demographics and as SEC staff review the new disclosures and query companies.

Companies are also expecting a Biden administration push on new disclosure and regulations around social issues generally, including diversity.

“We’ll learn a lot about where their expectations are,” PwC’s Ms. Wyatt said of regulators. “Many companies are yearning for more guidance.”

Write to Theo Francis at [email protected], Inti Pacheco at [email protected] and Thomas Gryta at [email protected]