In the 21st century, discussion surrounding diversity & inclusion (D&I) has become more prevalent in the world of business. Every year, studies and research only seem to strengthen the business case for diversity & inclusion. As per McKinsey & Company’s notable reports Diversity Matters (2015), Delivering through Diversity (2018) and Diversity Still Matters (2020), diversity & inclusion in a business organization leads to:-
– Well informed and comprehensive decision making
– Innovation through wide range of perspectives and ideas
– Higher employee motivation and organizational commitment
– Attraction of top talent (Note: Gen Z expects good D&I performance from companies)
– Stronger global brand image
– Stronger financial performance
Despite an overwhelmingly strong business case for diversity & inclusion, it may still be misunderstood as merely ‘a moral option’ for businesses. Some companies could even consider having to choose between focusing on diversity & inclusion and ESG initiatives, another important factor expected in modern business.
It does not have to be this way.
Diversity & inclusion is a company’s competitive advantage, especially in a globalized economy.
Customers are increasingly diverse with different social/ethnic backgrounds and needs. Having a homogenous organizational group leads to limited perspective, inclusion and decision making. This may not adequately serve all customers.
When a company embraces diversity & inclusion as a competitive advantage, it becomes easy to implement and essential in serving customer needs. Diversity & inclusion has become just as important as fulfilling ESG/sustainability initiatives. Just as ESG initiatives contribute towards stronger financial performance and well-being of all stakeholders, so does diversity & inclusion.
Moreover, one does not have to be chosen over the other.
In fact, Diversity & inclusion is the missing link to a business’s sustainability and ESG goals.
How is diversity & inclusion linked to sustainability and ESG performance?
Like customers, other stakeholders are also just as diverse in the modern world. In order to serve diverse communities, we must embrace diverse voices of the communities and in our own organization. Diversity & inclusion impacts each of the ESG components as follows:
1. E (Environmental):
– Better understanding of both global and regional scopes of environmental problems. Thus, organizations can devise strategies for different environmental problems in both regional and global contexts.
– Effective, inclusive communication on environmental issues both internally and externally.
– Bolder innovation in solving environmental problems through diverse ideas and perspectives.
– Prevention of environmental discrimination and ensuring the benefits of environmental impact is equally experienced by all people in a community.
2. S (Social):-
– Helps ensure equality and safety in the workplace. – This in turn improves employees’ work performance and commitment to company’s sustainability initiatives.
– Encourages ethical sourcing with positive social impact.
– Helps reach a wider community and eliminates any possible discrimination in social initiatives.
3. G (Governance):-
– Inclusive decision making from management board wherein interests of all stakeholders such as employees, Environment, customers and community are taken in consideration.
– Instillation of transparency and trust in the organization. Diverse stakeholders will trust that their concerns will be heard and acted upon while leadership takes accountability.
One step further: Diversity, Equity and Inclusion (DEI)
‘Equity’ in Diversity, Equity and Inclusion (DEI) is the final component that ensures proper inclusion of diversity takes place in an organization. It ensures justice, equality, fairness and proper governance in an organization. Thus, it complements the ‘Governance’ component of ESG system.
Combining DEI and ESG initiatives in harmony ensures far-reaching positive impact of an organization’s sustainability initiatives.
Creating possibilities, for Generations
Horizon consists of 350 employees from over 15 nationalities. Some of the nationalities include Italian, Estonian, Singaporean, Indian, Ukrainian, Finnish, Russian and Armenian. We believe that a diverse team is one of the reasons for our success in serving our local community and our customers in 74 countries worldwide.
Together with our parent group Tolaram, we believe in creating possibilities for generations through sustainable development.
Sustainable development was defined by the UN in 1987: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
It is essential for us to listen to diverse voices to create possibilities for both current and future generations.
References:
Hunt, V., Layton, D., & Prince, S. (2015). Diversity Matters. McKinsey & Company. https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/~/media/2497d4ae4b534ee89d929cc6e3aea485.ashx
Hunt, V., Yee, L., Prince, S., & Dixon-Fyle, S. (2018). Delivering growth through diversity in the workplace. McKinsey & Company. https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/delivering-through-diversity
Dolan, K., Hunt, V., Prince, S., & Sancier-Sultan, S. (2020). Diversity still matters. https://static1.squarespace.com/static/561d0274e4b0601b7c814ca9/t/5ede28f14191b966b7436ae0/1591617786565/Diversity-still-matters-McKinsey+2020_06.pdf
United Nations. “Our Common Future.” 1987.