As a minority woman working in the technology industry, I appreciate the efforts of HR professionals to drive Diversity & Inclusion (D&I) initiatives. I see the business benefits and increased innovation that comes from having diverse perspectives, experiences, and ideas in the workplace. From working specifically in green tech, I see a lot of places where the concepts of D&I and sustainability cross paths.
Many companies are prioritizing D&I efforts to recruit and retain a more representative workforce. These same companies are also investing in sustainability initiatives to help minimize their environmental impact. Both of these efforts are critical to the long term success of a business, but I believe these two functions are stronger when they work together. D&I and sustainability strive on innovation, broad-scale ideas, and passion to make a difference in both an organization and the larger society. For D&I efforts and sustainability initiatives to reach their full potential, I believe they are best combined into a central program focusing on Environmental Social & Governance (ESG).
A sign that companies are starting to acknowledge how D&I and sustainability complement each other is the creation of ESG Reports. PwC describes ESG as not only looking at environmental issues like climate change and resource scarcity, but also social issues like labor practices, talent management, hiring diversity, executive pay, and business ethics. One example of a leading business in this emerging trend is JPMorgan Chase, which puts, “Advancing Sustainability” as the foundation of their ESG Report.
JP Morgan is not alone. It’s encouraging to see the number of publicly listed companies reporting ESG growth over the past two decades. According to a 2017 report by KPMG, in 1993 only 12 percent of the largest 100 companies in 49 countries ( a total of 4,900 companies) issued sustainability reports for that year. In 2017, that number climbed to 75 percent. While this is a great improvement, there is still room for more to be done. For now, this tells me that the ESG trend has taken hold among some of the largest companies in the world, and more are starting to pay attention.
It is no longer enough for companies to be financially successful. Consumers and even fellow organizations are increasingly demanding organizations strive for positive impacts on the communities they serve. Looking at environmental, social and governance issues is one way for companies to assess their success beyond the balance sheet. ESG reporting gives visibility into how a business impacts the broader society at large. A company with a strong ESG program also has a potential to attract and retain employees from diverse communities and backgrounds.
As ESG initiatives continue to increase, I believe we will see more companies release ESG reports that address both sustainability and D&I initiatives. Companies that do so will be better positioned to see how their efforts are supporting the communities they serve and addressing challenges they face. Companies will also be able to make better decisions for long term sustainable business practices and diversity within the organization. This is just one example of how we can all work smarter together in support of common goals. By bringing sustainability and D&I initiatives together into one ESG program, companies are able to make meaningful change in both areas.