An inclusive, sustainable world
With the complexity of issues facing both DEI and Sustainability, would it not make common sense for more collaboration, as both have long-term goals to achieve results?
The past few months I’ve had clients asking about the viability of moving their Diversity, Equity and Inclusion (DEI) function under Sustainability. While these are conversations, it’s a perceptible shift, significant enough to spark my curiosity.
I spoke with the heads of DEI and Corporate Sustainability to gain their perspective.
Diversity experts recognize how diversity should play a significant role in sustainability, leveraging a diverse community to problem solve, as one element. While there’s some overlap, the complexity and challenges are too big to easily combine functions.
I found that for Corporate Sustainability professionals, sustainability is both environmental and people; aligning Sustainability with Organizational Purpose is increasingly overseen by Boards. Some firms now firmly tether compensation to sustainability goals, a noticeable shift: Unilever, Apple and Danone all link compensation to sustainability.
The same is increasingly true for DEI.
According to the WSJ:
“More companies are putting money behind those pledges by tying executive compensation to specific [Diversity] goals. Starbucks Corp. said it would give top executives more shares if the coffee chain’s managerial ranks grow more diverse over three years. McDonald’s Corp. in February gave executives annual incentives to increase the share of women and racial minorities in leadership roles by 2025. In March, Nike Inc. said it would — for the first time — tie some executive pay to five-year goals for improving racial and gender diversity in its workforce and leadership positions.”
With the complexity of issues facing both DEI and Sustainability, would it not make common sense for more collaboration, as both have long-term goals to achieve results?
The public is watching, as are shareholders. PWC research wrote that “The public’s heightened expectations for companies have dovetailed with the growing interest of investors in environmental, social and governance (ESG) factors, which include diversity and inclusion (D&I).” Just yesterday “Fidelity International has warned directors at more than 1,000 companies that it will move against them if they fail to tackle climate and the lack of boardroom gender diversity.” (Financial Times, July 26, 2021).
Headlines now blare shareholder concern (revolt) against all types of MNC’s on environmental issues. DEI is rapidly integrating into investment decisions as investors require more transparency on workforce composition and pay equity — and ESG has an outsized role in an organization’s ability to create value.
To succeed in Corporate Sustainability today is to demand input from multiple perspectives. Sodexo, a French food services and facilities management firm, identified four approaches to align this work. They recommended shared leadership for both, DEI and Sustainability, working on cross-functional governance councils while reflecting priorities of both functions. I wanted to see if other organizations followed a similar approach.
To date, I haven’t found much at all, but uncovered some interesting connections.
In the GlobalScan’s 2020 Sustainability Leader Survey, a few organizations stood out. Unilever has been on the list for over 10 years, followed by Natura & Co, Danone, Microsoft, and Tata. Each puts Sustainability at the core of their business and is committed to the UN Sustainable Development Goals. All have been highly rated for their DEI action, so the overlap of Sustainability and DEI is tangible.
When I reviewed each of their published DEI initiatives, I saw the affiliated goals of DEI and Sustainability.
· Unilever has a broad- range of actions to help build a more equitable and inclusive society (yes, society, not just company). These include the raising of living standards, more opportunities through inclusivity and preparing people for the future of work — all founded on the principle of respect for human rights.
· Natura & Co released a “Commitment to Life” sustainability plan for 2030, focusing on actions to address the world’s most pressing issues; the defense of human rights, climate crisis, protecting the Amazon and ensuring equality and inclusion throughout its network.
· Danone’s sustainable development goals are completely aligned with their DEI goals, providing equal opportunity to every male and female employee, wherever they live and work globally.
· Microsoft’s goals emphasize greater representation of a culture of inclusion, engaging with suppliers and partners for societal change, strengthening the communities in which they serve.
· Tata’s goals centre on senior leadership accountability, talent programs, workplace practices, philanthropy, and supplier diversity, expanding access to opportunities for under-served and marginalized groups.
For the past 18 months we’ve all been living in a world filled with uncertainty from a global pandemic — civil unrest, geopolitical challenges, and economic upheaval.
Despite such uncertainty, Sustainability, Inclusion and Equity continues to grow.
That’s no small thing!
The evolution of ESG’s diversity policies provides a framework for a combined, collaborative focus with more measurable actions.
Is it now time for DEI and Sustainability to join together and shape a more inclusive, equitable world?
ESG’s focus on Diversity and Inclusion cements the case for greater integration. All the Corporate Sustainability professionals I’ve spoken to follow the Ten Principles of the UN Global Compact, a principle -based approach of doing business, of which human rights and fairness are deeply embedded.
Indeed, Principle #6 acknowledges how discrimination negatively influences the greater contribution individuals make to society.
Reviewing the research, seeking insights from DEI and Sustainability professionals leads me back to my original question. As DEI and Sustainability share the goal of building a more inclusive society, would not combining both provide a sustainable change for the greater good? I’m leaning towards a solid yes, and watching to see how this merge takes shape.
