American Express Releases 2020-2021 Environmental, Social, and Governance Report with New Long-Term Goals

Rhea-AI Summary

American Express (NYSE: AXP) released its 2020-2021 ESG Report, detailing initiatives aimed at promoting diversity, equity, and inclusion (DEI), financial confidence, and climate solutions. The company plans to drive $100 billion in spending at small businesses and invest $500 million on community initiatives. Additionally, American Express commits to net-zero emissions by 2035 and will provide $10 million for climate-related philanthropic efforts. Notable DEI statistics include 48% of new hires globally being women and the achievement of 100% pay equity across genders globally.

Positive

• Plans to drive $100 billion in consumer spending at small businesses by 2025.
• Commits to invest $500 million for community resilience and equity initiatives.
• Achieved 100% pay equity across genders globally.
• Plans to achieve net-zero emissions by 2035.

Negative

• None.

• Report includes additional workforce diversity disclosures related to American Express’ pay equity, hiring, retention, and promotion efforts
• American Express aims to drive $100 billion in spending at small businesses and invest $500 million on initiatives that support more resilient and equitable communities
• The company recently committed to net-zero emissions by 2035 and plans to provide $10 million in philanthropic funding to support initiatives to advance climate solutions

NEW YORK--(BUSINESS WIRE)-- American Express (NYSE: AXP) today announced the release of its 2020-2021 Environmental, Social, and Governance (ESG) Report, which includes a new roadmap for the company’s ESG strategy focused on three core pillars: Promoting Diversity, Equity, and Inclusion (DE&I); Building Financial Confidence; and Advancing Climate Solutions. The new ESG roadmap outlines long-term goals and initiatives to drive American Express’ ESG strategy, including the company’s commitment to net-zero emissions globally by 2035, announced last week.

This year’s report also includes first-time disclosures, including diversity representation data on the company’s hiring, promotions, and colleague retention efforts, as well as the “raw median pay gap” for women globally and for racially or ethnically diverse colleagues in the U.S.

“We’ve always believed that our strength comes from the impact we can make on people’s lives – what we call the powerful backing of American Express,” said Stephen J. Squeri, Chairman and Chief Executive Officer. “Over the last year, we’ve made progress on our commitments across our ESG priorities and set new long-term targets with actionable initiatives. We also raised the level of transparency we provide about our progress, particularly on the DE&I front, which demonstrates the rich, inclusive, and engaging culture we strive for at American Express.”

Promoting Diversity, Equity, and Inclusion American Express is committed to supporting a diverse, equitable, and inclusive workforce, marketplace, and society. To further this objective, the company announced a $1 Billion DE&I Action Plan in October 2020, which outlined its initiatives to promote diversity, equity, and inclusion for its colleagues, customers, and communities. Through mid-2021, the company has spent more than $450 million toward this target, which primarily includes spending with diverse suppliers, grants, and assistance for Black and minority-owned businesses, investments in pay equity, and philanthropic contributions.

In this year’s ESG Report, the company is providing greater transparency on its progress, building on the enhanced disclosures and 2020 U.S. EEO-1 data published in the company’s 2021 Interim ESG update earlier this year.

• Enhancing Transparency on Colleague Representation: As part of its commitment to balanced representation throughout the company, American Express provided additional diversity representation data on its recruitment, hiring, promotion, and retention efforts. Below are the key new disclosures related to the composition of American Express colleagues in 2020:
  • Hiring: 48% of new hires globally were women, and 50% of all U.S. new hires were racially or ethnically diverse.
  • Promotions: Among colleagues that received promotions globally, 46% were women, and 50% of U.S. promotions were racially or ethnically diverse colleagues.
  • Retention: Retention rates globally were 94% among women, and 93% among men. In the U.S., retention rates were 93% among racially or ethnically diverse colleagues and 94% among white colleagues.
    
• Enhancing Transparency on Equal Pay: In 2020, American Express announced it had achieved 100% pay equity for colleagues across genders globally and across races and ethnicities in the U.S., assessing pay on a statistical basis and considering key factors that influence compensation, and remains committed to maintaining this goal going forward. Further enhancing its transparency, the company is now disclosing its “raw median pay gap,” which compares differences in raw median base pay making no adjustments for factors such as role, level, tenure, performance, or geography. In 2020, the median base pay of women globally was 107.6% of the median pay of men, while the median base pay of U.S. racially or ethnically diverse colleagues was 94.6% of that of white colleagues.

Building Financial Confidence As one of the largest financial institutions in the world with an extensive small business customer base and merchant network, American Express has an opportunity to help people and businesses build financial resilience through responsible, secure, and transparent products and services. To advance this strategic pillar, the company established new goals and initiatives as detailed in the report including:

• Supporting Small Businesses: American Express aims to drive $100 billion in consumer spending at small, independently owned retailers or restaurants on Small Business Saturday and during other Shop Small campaigns from 2021 through 2025.¹ Between 2020 and 2021, the company spent more than $300 million on consumer Card Member offers and related marketing to jumpstart spending through its Shop Small campaigns.²
• Investing in Communities: American Express plans to invest $500 million to build more resilient and equitable communities between 2021 through 2025 in support of new initiatives that combat economic, health, educational, and societal disparities in communities. In 2020, the American Express Center for Community Development (CCD) underwrote loans and investments which resulted in the creation of more than 1,700 units of affordable housing.
• Empowering Individuals: To help individuals and businesses maintain their financial security and well-being, American Express announced two new goals: provide at least 5 million individuals with the tools, resources, and educational content to improve financial wellbeing from 2021 through 2025 and provide access to credit to at least 4 million individuals from underserved or underrepresented populations from 2021 through 2025. In 2021, American Express released MyCredit Guide and Score Goals on its mobile app in the U.S., tools to help consumers improve their credit score, and it maintained the lowest fraud rate among the major credit card networks for 14 consecutive years according to the February 2021 Nilson Report.

Advancing Climate Solutions

To help build a more sustainable world, American Express is enhancing its efforts to help customers and communities transition to a low-carbon future. Recently announced goals include:

• Moving to Net Zero: American Express has committed to net-zero emissions by 2035 in line with the Science Based Targets initiative (SBTi). This builds on the company’s pledge in 2018 to remain a carbon neutral company across its operations. American Express will now also work with suppliers to reduce their impact on the company’s value chain by inviting them to track, reduce, and eventually neutralize their own operational greenhouse gas emissions. The company will also pilot low carbon production innovations, including carbon tracking and offset solutions by the end of 2022.
• Community Support: American Express plans to provide at least $10 million in philanthropic funding to support initiatives, partnerships, and programs that address the adverse effects of climate change on communities from 2021 through 2025. Additionally, it will continue to engage colleagues in sustainability initiatives through the Green2Gether program.

American Express’ ESG Report is mapped to the following voluntary reporting standards and frameworks: Global Reporting Initiative (GRI) Standards Core Option, Sustainability Accounting Standards Board (SASB), and Task Force on Climate-Related Financial Disclosures (TCFD).

To learn more about American Express’ approach to corporate responsibility and ESG, visit https://amex.co/ESG.

1 Based on spend as reported by consumers in surveys commissioned by American Express (not actual receipts or sales).

2 Our commitment of more than $300 million, supported Card Member offers as well as marketing to encourage customers in select countries to support small businesses in 2020 and 2021.

ABOUT AMERICAN EXPRESS

American Express is a globally integrated payments company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, instagram.com/americanexpress, linkedin.com/company/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.

Key links to products, services and corporate responsibility information: personal cards, business cards, travel services, gift cards, prepaid cards, merchant services, Accertify, Kabbage, Resy, corporate card, business travel, diversity and inclusion, and corporate responsibility.

Source: American Express Company

Location: Global

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which are subject to risks and uncertainties. The forward-looking statements, including the company’s aspirational ESG commitments and goals, contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “seek,” “should,” “could,” “would,” “likely,” “commit,” “continue” or other similar expressions. Actual results may differ from those set forth in the forward-looking statements due to a variety of factors, including: competition, brand perceptions and reputation; an inability to develop and market value propositions that appeal to Card Members and new customers; the amount and efficacy of investments in product innovations, resources, marketing campaigns and programs; changing customer behaviors, interest in the company’s products, resources and programs, and willingness to access capital provided by the company, spend money at small businesses and value environmentally and socially responsible products and services; management’s inability to identify suitable suppliers, grantees, partners and community investments and negotiate acceptable terms; the actual amount the company spends with suppliers, on ESG initiatives and to make appropriate salary adjustments, all while implementing operating expense control initiatives; an inability to build partnerships and execute programs with other companies and of partners to meet their obligations to the company; changes in developing standards and certifications; the cost and availability of renewable energy, carbon removal and carbon offset projects, energy attribute certificates, certified paper and green buildings, and alternatives to single-use plastic; supply chain and market disruption; regulation; potential M&A activity; severe weather conditions, natural disasters and other catastrophic events; changes in the company’s real estate, technology, colleague and community engagement, and risk management strategies; an inability of waste management systems to divert waste to recycling and composting facilities; and changes in economic or business conditions and the company’s ability to grow, improve its financial performance and execute on its strategies. A further description of these and other risks and uncertainties can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and the Company’s other filings with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210928005359/en/

Media:

Leah M. Gerstner, Leah.M.Gerstner@aexp.com, +1.212.640.3174

Azar Boehm, Azar.Boehm@aexp.com, +1.212.225.4052

Source: American Express Company

FAQ

What are American Express's new ESG commitments?

American Express has committed to achieving net-zero emissions by 2035, investing $500 million in community initiatives, and driving $100 billion in spending at small businesses.

How much has American Express invested in diversity and inclusion initiatives?

American Express has spent more than $450 million towards its $1 billion DEI Action Plan to support diversity, equity, and inclusion.

What is included in the 2020-2021 ESG Report from American Express?

The report includes disclosures on pay equity, workforce diversity, and initiatives for financial confidence and climate solutions.

What is the raw median pay gap reported by American Express?

The raw median base pay of women globally was 107.6% of the median pay of men, and racially or ethnically diverse colleagues in the U.S. earned 94.6% of what white colleagues earned.