A first-time racial equity analysis of 40 Minnesota companies shows progress in company diversity, but also shows much more work is needed.

3M, Allianz Life Insurance of America, Allina Health, Andersen Corp. and Best Buy all scored well on the St. Paul-based Center for Economic Inclusion’s inaugural Racial Equity Dividends Index released Tuesday.

The survey of 40 Minnesota firms pointed to needed work to diversify suppliers, create livable wages and actively recruit people of color. The goal of both the center and the participating companies is to help identify which racial equity policies are effective and where there is room for improvement.

The companies, with more than 200,000 workers combined, were evaluated on 36 equity standards and reported outcomes for seven key workplace practices.

The process looks at how the companies dealt with employees, suppliers and customers of color with regard to hiring; culture/retention/advancement; supply procurement; philanthropy/investment; providing products to people of color; leadership; and public policies.

“Until now, there has not been an index like this for race to help companies decide how they are performing,” said Tawanna Black, the center’s chief executive.

Twenty-eight of the 40 index participants are headquartered in the Twin Cities. Index scores averaged 38 out of a 100. The highest score was 76 and the lowest score six. Well-resourced large firms carried the highest scores.

The majority of firms provided employees with benefits and regularly surveyed their staff about their sense of belonging and racial equity. About 73% also provided a budget to help staffers working on racial equity matters.

3M and Allianz Life Insurance Company of North America rated very well for having strong racial equity practices in leadership, retention/advancement, philanthropy and investment.

3M also scored high for having diverse product-procurement practices. Other firms noted for regularly buying goods from racially diverse suppliers included Allina Health, Andersen Corp., Fairview Health, Mortenson Construction, Securian Financial, Target and U.S. Bank.

Companies reporting solid practices in the areas of hiring, retaining or advancing employees of color included 3M, Allianz, Allina Health, Andersen Corp., Best Buy, Fairview Health Services; Short Elliott Hendrickson, Inc.; Target Corp., U.S. Bank, Grant Thornton, and the Jennie-O subsidiary West Central Turkeys.

Only 26% of the 40 Minnesota firms reported having minority supplier purchasing efforts or making philanthropic investments in Black, Latino, Native American and Asian-led organizations.

In all, just 44% of firms reported having equity goals for “hiring, retaining, and advancing” workers of color and for holding leadership accountable for meeting their goals.

About 30% said they intentionally recruited from colleges and workforce development programs that have high percentages of Black, Indigenous, Hispanic, and/or Asian people.

These numbers show “opportunities for growth,” Black said.

Wages proved another area that surprised CEI officials.

Only 8% of the surveyed firms paid “family-sustaining” wages and only 5% had leadership representing the demographics of the population.

Half the firms in the index said they measure employee pay by race annually. But only 8% paid workers at least $45,000 a year.

“Particularly in Minnesota, it is important for all employees to not just care about the minimum wage but to care about whether all families are making enough to sustain their families.” The hope is that all employers will do what they can to make that number change, she said.

The index delved beyond employment and found that just 25% of firms regularly analyzed the impact of their products on consumers and communities of color. Without diverse marketing teams, some companies are missing sales that could be made in ethnically diverse communities, Black said.

Black noted that closing racial equity gaps is not just good, but is “good for business.” A McKinsey research report noted that the spending power of African-American consumers alone is expected to rise from $910 billion in 2019 to $1.7 trillion by 2030.

The index was launched in January by CEI, the St. Paul-based nonprofit whose sponsors include the McKnight Foundation, Target, U.S. Bank, 3M, Thrivent, JPMorgan Chase, Wells Fargo, Mortenson and Best Buy.

Following the May 2020 killing of George Floyd, 33% of America’s largest corporations – including several in Minnesota – committed to supporting racial equity efforts and pledged $66 million, according to McKinsey & Company.