Over 37 percent of shareholders back third-party audit despite Scotiabank’s existing initiatives
The Shareholder Association for Research and Education (SHARE) reported that more than 37 percent of shareholders voted in favour of a proposal urging the Bank of Nova Scotia (Scotiabank) to commission a third-party racial equity audit.
That level of support, according to SHARE, more than doubles the 2024 average for shareholder resolutions at Canadian companies.
The proposal was filed by SHARE on behalf of the Hamilton Community Foundation.
Large institutional investors backing the proposal include the Canada Pension Plan Investment Board (CPPIB), British Columbia Investment Management Corporation (BCI), Investment Management Corporation of Ontario (IMCO), California Public Employees' Retirement System (CalPERS), and California State Teachers' Retirement System (CalSTRS).
Scotiabank is now the only one of Canada’s Big Six banks that has not committed to a third-party racial equity audit.
Since 2023, Bank of Montreal, Royal Bank of Canada, Canadian Imperial Bank of Commerce, National Bank of Canada, and Toronto-Dominion Bank have each committed to conducting audits.
As described by SHARE, a racial equity audit consists of an independent examination of a company's employment and business practices, with the goal of identifying and addressing potential or actual disparate outcomes for Indigenous Peoples and racially marginalized communities.
Sarah Couturier-Tanoh, director of Shareholder Advocacy at SHARE, stated that “a racial equity audit will unify Scotiabank's presently fragmented reconciliation and equity initiatives, providing a co-ordinated, enterprise-wide assessment to drive meaningful progress.”
Couturier-Tanoh also said the audit would measure and support Scotiabank's newly launched ScotiaBond values, which the bank says reflect its commitment to accountability and inclusivity.
Despite Scotiabank's position that its existing initiatives are sufficient, a large portion of its shareholders disagreed, as indicated by the vote results.
According to Couturier-Tanoh, “expanding financial access, equal contract opportunities, and equal employment opportunity for Indigenous Peoples and racially marginalized communities will support Scotiabank's business resilience, competitiveness, and long-term sustainability.”
This shareholder push comes as corporations in the United States face increasing pressure to roll back diversity, equity, and inclusion (DEI) policies.
As reported by Bloomberg in March 2024, Barclays dropped its gender and ethnicity targets for US employees amid growing political and legal opposition to DEI measures.
As per Couturier-Tanoh, “amid attacks on diversity and equity measures in the US, this strong support confirms that for shareholders, robust accountability on racial equity issues remains a material consideration for long-term value creation.”
| SHARE provides responsible investment services to Canadian institutional investors, including shareholder engagement, policy advocacy, advisory services, and research. |
