PwC Is Dropping Diversity Targets After the Supreme Court Affirmative Action Decision

Two days after MLK Day, Financial Times reported that PwC US is nixing some diversity targets.

PwC has dropped some of its diversity targets in the US and opened up previously off-limits scholarships to white students after pressure from right-wing activists and a Supreme Court ruling against affirmative action.

The Big Four accounting firm, which employs 46,000 people in the US, said it was applying “rigour” to its diversity, equity and inclusion efforts to reflect the new legal backdrop.

The changes included ending race-based eligibility criteria for a student internship programme and for scholarships to help candidates prepare for professional accounting exams, two initiatives that were designed to increase the diversity of the firm’s employee base, according to executives and changes made to PwC’s website.

The Supreme Court ruling they refer to is the one on race-conscious admissions (more commonly known as affirmative action) in higher education decided June 29, 2023. You can read all 237 pages of that here [PDF].

After the Supreme Court ruling, the nonprofit group founded by ex-pres Trump’s senior advisor Stephen Miller calling itself America First Legal sent PwC a cease and desist letter demanding the firm stop using “racial preferences in hiring and internship programs.” The press release AFL put out at that time went something like this:

PwC is an internationally recognized name as one of the “Big Three” accounting firms. But in the United States, they are among one of the worst offenders when it comes to implementing racially discriminatory practices. Not only does PwC have two explicitly race-based internship programs (i.e., one must be a certain race to qualify), but it also administers a third and its principal internship program in a discriminatory manner. Furthermore, PwC has hiring and promotion quotas based on race and sex, discriminating against individuals at every step of their careers.

In light of recent Supreme Court of the United States cases on this topic, AFL sent a notice letter to Tim Ryan, the Chair of the U.S. Board for PwC, alerting him that these practices expose the firm to lawsuits and the partners to personal liability. The letter is also an open letter to the partnership, encouraging them to push back against these racist policies. It is also an open letter to PwC employees and applicants, urging them to come to AFL to seek representation if they are denied a job or promotion due to their race.

Last time I wrote this up, I neglected to point out how AFL said “one of the ‘Big Three’ accounting firms” in their press release and was called out in the comments for letting such a choice opportunity pass me by. Allow me to remedy that now and say HAHAHA THEY SAID BIG THREE. Guess KPMG won’t be getting a strongly worded letter about diversity programs.

AFL named four PwC programs they deemed “facially unlawful” in light of the Supreme Court ruling: The “Start Internship”, the “Advance Internship”, the “While You Work – CPA Acceleration Program”, and the “Enrich” program. And added:

Also, the partnership’s official statements — styled “Purpose and Inclusion Reports” for FY 2021 and FY 2022 — contain disturbing evidence of unlawful racial, national origin, religious, and sexbased quotas in hiring, promotion, and other business practices. Either the partnership is affirmatively misrepresenting its hiring and promotion practices or admitting to egregious and morally indefensible violations of the law. There is no third alternative.

Let’s talk about those reports. PwC’s FY23 Purpose and Inclusion Report was released Monday, offering fresh new information that was clearly impacted by the affirmative action decision. In the report, the firm discusses how DEI is “an essential aspect of our purpose, values and culture.” Said PwC:

As our efforts continued to evolve and we focused further on our desired progress, in the summer of 2020, we committed to tracking and reporting annually on 14 indicators most material to our business. We added an additional four indicators in FY21. Several challenges–new and ongoing–marked the year, from increased climate regulation, continued social unrest and unpredictable economic market conditions to the Supreme Court ruling on affirmative action in higher education.

While the world has moved in ways we never could have anticipated over the last few years, we remained focused on workforce representation, talent attraction and the makeup of our partnership as areas that guided our DEI strategy and reporting throughout FY23. We’ve also reflected on the Supreme Court ruling and applied rigor to advance our diversity commitment in a way that fully accords with the changing legal landscape. In addition to sharing the data that helps inform our strategy, this report is also designed to help us hold ourselves accountable to support sustainable progress. Cultivating a diverse workplace and sustaining an inclusive culture is an ongoing endeavor. We continue to evaluate our indicators, and in the areas where we seek to do more to support the career trajectories of our people, we have guideposts for disciplined reflection, to evaluate and accelerate progress.

PwC shared some stats in the report, too. Just a few of them in image form:

Check this out, they even have turnover.

And pay equity:

Said the report in words (I purposely put the word after the pictures so you can tune out here if you want):

When we began reporting expansively on our DEI data in FY20, we sought aspirations focused on workforce representation, talent attraction and the makeup of our partnership. These aspirations continued to guide us throughout FY23:

• To attract a workforce in the US that better reflects the diverse makeup of US higher education enrollment: 56.5% women, 20.9% Latino/Hispanic and 14.7% Black
• To aspire toward 35% Black and Latino/Hispanic representation among our experienced hires, entry level hires and interns
• To aspire toward our overall partnership being made up of 50% women and 35% racially/ethnically diverse individuals

Using these as guideposts, we have been tracking our progress since FY20 to measure the efficacy of our actions.

• We aspired to increase our Black and Latino/Hispanic workforce and have made considerable progress. In four years, we have increased from 6,955 to 9,494–a 37% growth in our Black and Latino/Hispanic population.
• We aspired to increase the female and racial and ethnic diversity within our partner pipeline.
  For women, we have seen a 15% increase from 253 to 290 in partner pipeline candidates, and we have more work we want to do. We have experienced a 41% increase in our racial and ethnic diversity partnership pipeline, going from 222 to 313.
• We also aspired to increase the level that we award our reportable spend to certified diverse suppliers. We have gone from 22% to 35%, making significant progress. However, in FY24 we will experience the loss of a diverse supplier that will impact our progress and have us reevaluate other ways to keep our momentum.

It will be interesting to see what next year’s report looks like. In the meantime, PwC remains the only Big 4 firm listed on America First Legal’s Woke Corporations page.