DRIVING DIVERSITY, EQUITY, AND INCLUSION DIGITAL REPORT 2022
IN ASSOCIATION WITH:
DRIVING
DIVERSITY, EQUITY, AND
INCLUSION
JPMORGAN CHASE & CO.
JPMORGAN CHASE & CO.
JPMorgan Chase & Co. is using the power of its supply chain and lowering the barriers to opportunity for Black, Hispanic, and Latino suppliers
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e have a real opportunity through procurement to impact our global communities by generating revenue, creating jobs and driving inclusive growth, says Eric Smith, Global Head of Supplier Assurance Services at JPMorgan Chase. “And an important component of procurement is supplier diversity, one of the most direct ways to address economic inequality.” For almost three decades, the firm has been committed to engaging with diverse suppliers. But, with JPMorgan’s recent US$30bn commitment to help close the racial wealth gap, the firm is focusing on key drivers of wealth that help drive equity, and inclusion — providing additional small business loans, improving access to lowcost savings accounts, financing affordable housing units, and supporting diverse suppliers, including spending US$750mn more with Black, Hispanic and Latino-owned businesses by 2025. Increasing Diverse Supplier Spend by US$6bn Above and beyond its US$30bn commitment, JPMorgan Chase is developing creative approaches to scaling its support for supplier diversity. First, the firm is working with its top suppliers to drive a combined increase in spend with diverse businesses by more than US$6bn, with US$1.2bn going to Black, 4
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The Gold Standard in Diverse Spend
Hispanic and Latino-owned companies. While the goal is to reach these spend increases over the next three years, the larger purpose is to have other corporations develop sustainable diversity programmes that will generate new revenue for diverse businesses for decades into the future. Meeting a mission to support diversity, equity and inclusion will involve forging new paths and encouraging a shift in the overall culture of the business community. But, Smith and his team understand that one company can’t drive impact alone. It takes a commitment from large and small companies across all industries. Today, if a supplier wants to do business with JPMorgan Chase, it must demonstrate that it has established a diversity, equity and inclusion infrastructure and culture. According to Smith, that means engaging in active conversations with existing suppliers and building diversity, equity and inclusion into the firm’s minimum control 6
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requirements. For example, JPMorgan Chase now asks its suppliers annual diversity, equity, and inclusion questions to ensure that their diversity programmes align with the firm’s values. Diversity is now a finding on the firm’s overall annual assessment that may require remediation and conversation. “Our suppliers need to embrace the need for diversity”, Smith says. “We conduct
ERIC SMITH TITLE: MANAGING DIRECTOR, GLOBAL HEAD OF SUPPLIER ASSURANCE SERVICES INDUSTRY: BANKING
business with suppliers that have similar values, that have a similar culture, that have a similar drive for inclusion.” Cyber-Readiness for Black and Hispanic Suppliers Supplier spend isn’t the only aspect of JPMorgan Chase’s push for greater inclusion. Diverse business owners often need other forms of support. For instance, they may
EXECUTIVE BIO
LOCATION: USA Eric Smith joined JPMorgan Chase & Co. (JPMC) in January 2016 and is currently the Global Head of Supplier Assurance Services (SAS). He is accountable for driving the third-party risk management assessment activities across the entire JPMC global footprint. This includes on-site assessments, virtual assessments, application control assessments, third-party information security, and supplier continuous monitoring. Prior to assuming this role in April 2018, Smith was the Head of Cybersecurity for Consumer and Community Banking (CCB). As part of Smith's responsibilities, he represents the firm and the Financial Services Sector on the Delaware Cybersecurity Advisory Council, and is on the Board of Directors of the Delaware Community Reinvestment Action Council. He also supports JPMC Diversity, Equity and Inclusion (DE&I) programme by leading the DE&I Council for Global Supplier Services, and is a member of JPMC’s LGBT+ Executive Forum.
Born entrepreneur? Made entrepreneur? Finding the right deal. Negotiating the right price. Delivering on time. At EY, we know how choosing the right suppliers can help to achieve strategic goals. Our Environmental Social Governance Service team is creating a diverse ecosystem for diversity-owned businesses to reach their potential and make a difference. © 2022 Ernst & Young LLP. All Rights Reserved. ED None.
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EY Collaborations: Banking on diversity How EY is helping to create a culture that values diversity both inside and outside our doors EY is one of the world’s leading professional services firms and like JP Morgan has a long commitment to increasing diversity in its suppliers, and helping clients do the same. Theresa Harrison, EY’s Environmental Social Governance Services Leader, says the first foundation for EY’s strategy comes from an overall commitment to diversity, equality, and inclusiveness (DEI) within its overall organisation and culture. This is then followed by the leadership within its supply chain services. Diverse supply chains Making sure EY suppliers have aligned goals within their own supply chains is also imperative. To those ends, EY created its own evaluation criteria that examine RFPs, overall ongoing assessments, its vendor management scope, and how organisations can team together to really make a difference and an impact from an ESG perspective. Harrison notes, “We’re giving it high weighting in all of our specific RFPs, as well as our clients and those who we are actually developing from a client perspective on what their strategy should be, how should they evaluate their
supply chain and what things should they look for in setting goals through our climate change and sustainable services practice.” Catering to client demand ESG has become a mandatory exercise across the industry, but it’s complicated and confusing – and making sure the right outcomes prevail is essential, says Michael Giarrusso, whose team works with EY clients to develop their thirdparty risk management framework, processes, methodologies ,and technology enablement. He explains that helping clients learn how to break down barriers in terms of differing methodologies, is often the answer. “We’ve started to consult with our clients on helping to break down those barriers. It’s something that motivates a lot of our people to work with our clients.” Supply Chain Services goals EY considers diversity as part of its DNA as an organisation. Harrison concludes, “Our Supply Chain Services goals are tied to our performance and participation within supplier diversity. It is really important for us to build this diverse ecosystem, not only for EY, but also from a client-serving perspective.”
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DOUG ROGINSON TITLE: E XECUTIVE DIRECTOR, SUPPLIER RELATIONSHIP MANAGEMENT Doug Roginson, Executive Director and Relationship Manager at JPMorgan Chase, is the Grant Officer and head of racial equity for its Diverse Supplier Grant initiative. The Firm issued a US$5mn grant to certified nonprofit Community Development Financial Institution (CDFI), called Local Initiatives Support Corporation (LISC), which will manage the grant initiative end-to-end. JPMorgan Chase has invited other corporations to voluntarily contribute funds that it will match. The firm’s nearterm aspiration is to grow this grant, increasing the available funds over the next several years. Roginson says meeting industry requirements like cyber security and insurance can be a costly investment for small and diverse businesses, creating a very real barrier to contract opportunities with corporations: “Our primary objective is to increase the number of qualified Black and Hispanic suppliers prepared to serve corporations across multiple industries by helping to eliminate common barriers.”
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“WE HAVE A REAL OPPORTUNITY THROUGH PROCUREMENT TO IMPACT OUR GLOBAL COMMUNITIES BY GENERATING REVENUE, CREATING JOBS AND DRIVING INCLUSIVE GROWTH” ERIC SMITH
MANAGING DIRECTOR, GLOBAL HEAD OF SUPPLIER ASSURANCE SERVICES JPMORGAN CHASE & CO.
not have a clear picture of gaps in their technology infrastructure, which could potentially disqualify them for work with financial institutions. Additionally, the coronavirus pandemic highlighted new vulnerabilities that emerged from suppliers having to work remotely. “The pandemic revealed new cybersecurity risks to the firm”, Smith explains. “We realised that many of our suppliers, when forced to send their employees home, weren’t ready to execute their resiliency plans. We saw suppliers being impacted by ransomware. And that reshaped the minimum control requirements we have around cybersecurity.” To assist diverse suppliers in getting their businesses secure and cyber-ready for financial industry clients, JPMorgan Chase recently partnered with TruSight, a risk management utility co-founded by JPMorgan Chase, American Express, Bank of America, Bank of New York Mellon, and Wells Fargo. The firm is using this utility to provide Black- and Hispanic-owned companies with a detailed view of their cybersecurity status. TruSight reviews several best-practice areas across a company’s operations, collects observations about their control environment and generates a report or assessment of their level of security. JPMorgan Chase’s TruSight partnership programme aims to eliminate a common barrier to opportunity with financial industry firms by making cyber-readiness more accessible for diverse suppliers. So far, TruSight has provided 25 diverse suppliers in JPMorgan Chase’s pilot programme with complimentary assessments. These assessments provide each diverse supplier with direct feedback on which cybersecurity controls they must increase to improve their industry positioning. jpmorganchase.com
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LENOX PARK BUILDS ASSET MANAGER DIVERSITY BY DEMOCRATISING CAPITAL Lenox Park gives asset managers techenabled route to diversity and inclusion with benchmarking insights and collaborative networks that democratise capital Asset managers as a corporate cohort have seen very little diversity over the years, reporting in a study that only 1.4% of total USbased assets under management is managed by diverse-owned firms, and patience with such a glaring disparity is running out. Lenox Park Solutions lets asset allocators assess the diversity, equity, and inclusion (DEI) impact of their capital. The platform has over 2,200 registered organisations, 1,200 asset managers, and represents US$6 trillion in assets under management. “If you ask the average allocator of capital ‘How did you find your best managers?’” says Founder and CEO Jason Lamin, “The likelihood is they found that manager through their peer group.” So, Lamin made an unbiased solution for potential partners to find each other. Part of that solution is collaborative dealmaking platform RoundTables. Lamin says “RoundTables was built on a premise that like-minded decision-makers tend to
collaborate with each other and prefer to knowledge-share among their peers. So we created a tech-enabled platform that empowers those individuals to collaborate efficiently in a safe space.” DRIVING DEI THROUGH KEY PARTNERSHIPS One key partner has been JPMorgan Chase, which joined as a Founding Member as part of its own DEI initiatives. “We are generating value for them,” says Chief Operating Officer Amber Kizilbash. “But we are also leveraging the broad spectrum of services and partnerships they can provide to a company like ours, at this phase in our growth cycle; and the phases ahead of us.” For Lenox Park, the intentionality of seeking out diversity will be crucial to future business. “At the U.S. National level there’s about US$70 trillion of wealth that is going to be transferred to the next generation by 2045,” says Kizilbash. “When you think about the next generation of leaders that are coming from this diverse millennial economic power, research suggests no other generation has been more focused on impact, and inclusion is one of the single most important values for them.”
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“WHEN IT COMES TO SUPPLIER DIVERSITY, THE BEST PRACTICE IS TO PRIORITISE IT” ERIC SMITH
MANAGING DIRECTOR, GLOBAL HEAD OF SUPPLIER ASSURANCE SERVICES JPMORGAN CHASE & CO.
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After these suppliers receive their TruSight assessment results, they have an opportunity to work with several consulting organisations, including Deloitte, Ernst & Young, and Protiviti — to navigate steps towards remediation. This is a service they can receive free-of-charge. Remediation complete, diverse suppliers are more prepared to take contract opportunities with JPMorgan Chase as well as other financial institutions. However, this programme provides additional benefits to participants that go
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beyond generating reports and remediation plans. It surrounds the supplier with a network of new relationships — both with other diverse business owners, and also with all of TruSight’s founding banks. Throughout the programme, cohort members are given the opportunity to present their capabilities to several financial institutions they can potentially work with. Though JPMorgan Chase’s TruSight cybersecurity programme may expand in the future, Smith's division is currently set on
PETER VAN ALLSBURG TITLE: H EAD OF DIVERSE SUPPLIER SOURCING Peter Van Allsburg is the Head of Diverse Supplier Sourcing at JPMorgan Chase and works with sourcing specialists to align diverse suppliers against opportunities. As part of its Racial Equity Commitment, the firm is committed to spending an extra US$750mn over 5 years with Black- and Hispanic-owned suppliers. Van Allsburg’s team works with Category Sourcing and business stakeholders to find opportunities and create go-to-market strategies. “We take a category-aligned strategy when matching prospective, diverse suppliers with opportunities,” says Van Allsburg. “In partnership with our Global Supplier Diversity team, we conduct significant supplier due diligence up-front to ensure that when diverse firms are being positioned for opportunities, there is a strong chance of success. We position diverse firms with intent to partner with them. We have support from our senior stakeholders and are transparent about our successes as well as when we may need assistance.”
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WWW.OVERLANDTANDBERG.COM
Empowering Organizations to Securely Manage and Protect Their Digital Assets • Leading global technology solution provider for 40+ years • Customers include global Fortune 500, Enterprise,
SME and SMBs in 100+ countries • Data Management and Security Solutions: • Hybrid Cloud Infrastructure, Business Continuity, Data Protection • Crypto-currency, IT Integration and Manufacturing
Tackling diversity through data and technology Overland-Tandberg is a global technology company serving over 100 countries. We spoke to its Chairman and CEO, Eric Kelly. As Chairman and CEO, Eric Kelly takes a dynamic role in leading the company in its global growth strategy. This has involved an important collaboration with one of the world’s leading banking corporations, JP Morgan Chase, that is expanding the company’s mandate of improving global diversity in the corporate and technology sectors. Kelly says Overland-Tandberg was on the lookout for a partnership with a bank to fit the company’s growing, global footprint. “We actually started off discussing the banking relationship, and then it quickly moved into a symbiotic partnership—they became our corporate sponsor. The collaboration has gained momentum and velocity, with Overland-Tandberg carrying out business with JPMC on the supplier diversity side, working with their chief procurement officer and their supplier diversity group. Established trust and success Kelly points to Overland-Tandberg’s long history when he speaks about the company’s robust reputation in the marketplace. As one of the longest
established black-owned global technology companies, it has built up a respected position. Our vision of “Global Intellect and Inclusiveness” is the ethos that drives the organization – this vision allows us to have a comprehensive understanding of diversity and inclusion. Diversity and data challenges Multinationals and foreign companies face the same challenges as US companies when trying to find black-owned businesses, says Kelly, it comes down to a lack of access, availability and awareness. “There are organizations here in the US that showcase specifically black-owned businesses, and diverse companies,” he elaborates. “But I think that from a multinational standpoint of foreign companies, it’s one of access and availability and awareness. How do you find and develop partnerships at scale with diverse companies when there’s no technology platform that’s designed to provide that information?” Kelly continues, “The world is digital and getting smaller. If you’re a US company you’re directly or indirectly doing business globally. This challenge has been constant, which led me to leveraging my history in technology to focus on creating a platform that could align these resources across industry and essentially play a key role in closing the digital and diversity divide.” It’s called Bridge 2 Technologies. Learn more
INCREASING SPEND ON DIVERSE SUPPLIERS: THE STATS • US$750mn in new spend with Black, Hispanic, and Latino suppliers – part of commitment to spend US$30bn by the end of 2025 to advance economic growth and opportunity • Top suppliers to JPMorgan Chase committed to spend US$6bn with diverse suppliers — US$1.2bn specifically for Black Hispanic and Latino suppliers
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“WHEN WE ARE FOCUSED
JPMORGAN CHASE & CO.
AND INTENTIONAL, THE PROCUREMENT ORGANIZATION CAN SERVE AS A VERY EFFECTIVE TOOL IN FURTHERING DIVERSITY, EQUITY AND INCLUSION” ERIC SMITH
MANAGING DIRECTOR, GLOBAL HEAD OF SUPPLIER ASSURANCE SERVICES JPMORGAN CHASE & CO.
championing its initial cohort of 25 Black and Hispanic suppliers. 60% of the way through the first set of assessments, JPMorgan Chase is seeing the results it expected: some suppliers are wellpositioned to start working with financial institutions; others may benefit from working with a top consulting firm. Breaking Down Barriers to Inclusion Access to capital is a common challenge faced by diverse businesses, so meeting industry requirements like cyber security, insurance, and bonding is often costprohibitive. Satisfying these requirements can cost a typical small business over US$100,000, creating another barrier to entry into the financial services industry. To address this issue, the firm is launching a grant programme for Black, Hispanic and Latino-owned companies to provide financial assistance in meeting minimum requirements for doing business with large corporations. At the start of this new year, Eric will be focused on supporting the initial supplier cohort as they complete the assessment and consulting process. The TruSight programme aims to act as a stepping stone for diverse
suppliers to gain more contracting options within the financial services industry. “The programme is about opening doors for diverse suppliers,” Smith explains. “About eliminating barriers to opportunity.” The Future of DEI in Finance Eric’s division aims to lead the path forward. “We all know that we need to do better in diversity, equity, and inclusion," he says. Financial institutions have realised that they need to expand their view of services and contractors, companies and businesses— and that the old ways will need to change for them to thrive in the future. “Diversity should be ingrained in the culture of not just the procurement organisation, but the company as a whole," Smith says. “When we are focused and intentional, the procurement organisation can serve as a very effective tool in furthering diversity, equity and inclusion throughout the firm and the wider business community. When it comes to supplier diversity, the best practice is to prioritise it”.
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