The corporate world is rife with declarations that doing good is in our DNA; that we give back; we do things the right way. Our own view is that while companies can do much good, none are perfect. But sometimes we’re impressed to see a company address environmental, social or governance challenges with the same tenacity as it addresses those of making product and profit.
In 2012, Marc Benioff, CEO of Salesforce.com, says he became disgusted by how few women were in the room when he called meetings. At that time, fewer than 29 percent of Salesforce employees were women, along with less than 14 percent of its leadership team. Going forward, Benioff refused to hold meetings when fewer than 30 percent of those present were women.
Three years later, Benioff was approached by his chief people officer, Cindy Robbins, about doing a pay audit. Robbins and her colleague, Leyla Seka, suspected that women at the famously progressive company were being paid less than men for the same work. Benioff later admitted to suppressing his defensiveness in the meeting. But he quickly agreed to the pay audit, as he later wrote, “convinced that the data would be vindicating.” Benioff even agreed on the spot to remedy any disparities that might be uncovered, whatever their cost.
A methodology was developed, and the audit went forward. Several months later, the company found itself paying approximately $3 million to adjust salaries upward, the majority of them for women. A year later, largely as a result of acquisitions, the company’s follow-up audit found another $3 million was needed. Through 2019, Salesforce has spent over $12 million to close pay gaps as a result of its now-annual audits.
As ethical investors, what interests us about this story is not that Salesforce found pay gaps–in 2019, a typical female worker in the United States made roughly $0.82 to every dollar made by the typical man–but that the company committed to address these gaps, repeatedly spent money to do so, changed its hiring practices, and ultimately took its story public to help evangelize the cause of pay equity across the wider business community. Such a comprehensive response, even from a company with a reputation for strong ESG practices, is rare.
As it turns out, this kind of approach might actually be “in the DNA” of Salesforce. In 1999, the same year Salesforce was founded, the Salesforce Foundation was also created. Since then, the foundation has given over $330 million in grants, and facilitated more than 5 million employee volunteer hours. As part of the Foundation’s mission, more than 46,000 non-profits and NGOs use Salesforce products for free. Benioff and Salesforce are also credited with creating the now-widespread 1-1-1 model, wherein companies pledge to contribute 1% or more of equity, employee time, and product or profit to causes within their communities.
On the environmental front, in 2017 Salesforce achieved net-zero carbon emissions. Its current goal is 100% renewable energy use by 2022 (currently standing at 63%). Salesforce’s climate commitments additionally include a 50% reduction in absolute carbon emissions by 2030, a goal that includes scope 3 emissions–which means Salesforce will require suppliers representing 60% of those scope 3 emissions to set their own science-based targets to support its own goal. The company has also led in areas including collaborative renewable energy procurement, along with green building certification for 74% of its office space and counting.
Salesforce is frequently lauded for its ESG efforts, from the high overall rankings it receives from Barron’s, JUST Capital, RobecoSAM and MSCI, to its “A” scores on climate from CDP, its #1 ranking on PEOPLE’S 2019 list of top “Companies that Care,” its #1 ranking on Great Place to Work’s 2019 lists of “Best Workplaces for Women” and “Best Workplaces for Diversity,” and its top-10 ranking on “Fortune’s 100 Best Companies to Work For.” But as it has done with the challenge of gender equity, the company continually demonstrates an unwillingness to rest on these laurels, most recently leading national calls for better data privacy laws to protect consumers, and pouring millions into COVID-19 relief efforts.
No company is perfect. But we believe those willing to continually revisit and evolve their social and environmental policies, just as they do their products, are better positioned to keep within sight of their best intentions.