Darling Ingredients, Inc. – Workforce Diversity Data (2024)

Outcome: Successfully withdrawn following Darling Ingredients’ agreement to disclose global retention, promotion, and hiring data by gender starting with FY2024.

Effectiveness of Diversity Efforts

RESOLVED: Shareholders request that Darling Ingredients Inc. (“DAR”) report to shareholders on the effectiveness of the Company’s diversity, equity, and inclusion efforts. The report should be done at reasonable expense, exclude proprietary information, and provide transparency on outcomes, using quantitative metrics for workforce diversity, hiring, promotion, and retention of employees, including data by gender, race, and ethnicity.

WHEREAS:

More than half of the S&P 500 and over one-third of the Russell 1000 have released, or have committed to release, their consolidated EEO-1 forms, a best practice in diversity data reporting.[1]

As of the date of the filing of this proposal, DAR had not yet released its consolidated EEO-1 form, nor had it shared sufficient hiring, retention, or promotion data to allow investors to determine the effectiveness of its diversity and inclusion programs. Disclosure is around 47 percent for the consumer staples industry with peers Archer Daniels Midland Company, ConAgra Brands, Bunge, and the Coca-Cola Company all disclosing EEO-1 reports.[2]

As You Sow and Whistle Stop Capital released research in November 2023 that reviewed the EEO-1 reports of 1,641 companies against financial performance metrics from 2016-2021.[3] Within the consumer staples sector, statistically significant positive correlations were found between manager diversity and income after tax, mean return on equity, and return on invested capital.

Hiring: Studies conducted by economists at the University of Chicago and UC Berkeley found that “discriminating companies tend to be less profitable,” stating “it is costly for firms to discriminate against productive workers.”[4]

Promotion: Without equitable promotional practices, companies will be unable to build the necessary employee pipelines for diverse management. Women and employees of color experience “a broken rung” in their careers; for every 100 men who are promoted, only 87 women are. Whereas women of color comprise 18 percent of the entry-level workforce and only 6 percent of executives.[5]

Retention: Retention rates indicate if employees believe a company represents their best opportunity. Morgan Stanley has found that employee retention above industry average can indicate a competitive advantage and higher levels of future profitability.[6]

SUPPORTING STATEMENT:

Quantitative data is sought so that investors can assess and compare the effectiveness of companies’ diversity, equity, and inclusion programs.

It is advised that this content be provided through the DAR’s existing sustainability reporting infrastructure. An independent report specific to this topic is not requested.

[1] https://www.freshfields.us/49fd4b/globalassets/noindex/documents/freshfields-trends-and-updates-from-the-2023-proxy-season-july-2023.pdf, https://justcapital.com/reports/companies-disclosing-workforce-diversity-data-eeo-1-report-more-than-tripled/

[2] https://diversiq.com/blog/eeo1-data-dashboard/

[3] https://www.asyousow.org/report-page/2023-positive-relationships-linking-workforce-diversity-and-financial-performance

[4] https://www.nytimes.com/2021/07/29/business/economy/hiring-racial-discrimination.html

[5] https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace

[6] https://www.morganstanley.com/im/publication/insights/articles/article_culturequantframework_us.pdf, p. 2