The question of what role diversity initiatives play in ESG comes up time and time again. DEI is its own (massive) topic with its own field of practitioners. But because many corporate ESG programs have origins in responding to investors and stakeholders pushing for DEI progress alongside other E&S initiatives, it also falls under the ESG umbrella.
How exactly do companies incorporate DEI into ESG, though? Diligent explored this question in a recent blog – which identifies three main approaches:
Some believe that when it comes to ESG, diversity and inclusion are an add-on: Fortune, for instance, advocates for “ESGD,” a philosophy that gives D&I equal billing with the other elements of ESG. Others believe it fits within the “S” of ESG, the social justice aspect.
And indeed, it’s tempting to think that diversity and inclusion only relate to the “S.” In fact, Fortune believes that D&I needs to be baked into all aspects of an ESG strategy, arguing that it needs to be integrated specifically as a lens to look at the “E” (think of the water crisis in Flint, Mich.), or the “S” (zeroing in on the social impacts of businesses on black communities), and the “G” (promoting people of color for corporate boards).
Perhaps, then, diversity and inclusion aren’t pigeonholed within the ‘S’ but should run through the DNA of your entire ESG approach to ensure you are building environmental, social and governance strategies with an eye to D&I.
Diligent goes on to list these benefits of applying a diversity lens to all of your ESG initiatives:
- Better business decisions
- Better business results
- Better news for investors
- A more robust ESG strategy
- D&I gets the attention it deserves
- It’s the right thing to do
Whether a company’s approach is to treat diversity as an important add-on – ESGD – or to consider DEI throughout environmental, social, and governance decisions, incorporating diversity in some way provides a more robust review of an organization’s impact. And in either scenario, having diverse voices on your ESG team is also essential.
To support the diversity view of ESG, it’s important to know what data points to monitor to show both progress and impact. PracticalESG.com is hosting a free virtual three-part DEI event series that will help you tackle these issues The first workshop covered the different diversity, equity, and inclusion data points that organizations can measure (and the replay is available to PracticalESG.com members).
The next session, taking place tomorrow, May 4th, at 2pm Eastern, will cover equity audits and civil rights audits. Join us for a conversation between the pioneer of this field, Laura Murphy, and fellow civil rights audit practitioner and former US Attorney General Eric H. Holder, Jr., as well as a panel discussion among SOC Investment Group’s Tejal Patel, Covington’s Aaron Lewis and Airbnb’s Megan Cacace, to get a primer and understand their “lessons learned” from audits. Audits are taking off as a practice and everyone doing ESG or DEI work needs to prepare. Don’t miss this chance to learn from the people on the leading edge. Sign up here to secure your spot.