What is the ESG Diversity Target? Why do only 15% of companies have the target?What is the ESG Diversity Target? Why do only 15% of companies have the target? https://www.esgenterprise.com/wp-content/uploads/2022/09/ESG-Diversity-Target.png 1080 1080 ESG Enterprise https://www.esgenterprise.com/wp-content/uploads/2022/09/ESG-Diversity-Target.png
From the viewpoint of obtaining sustainability in the corporate sphere through the ESG Diversity Target considerations, one is likely to encounter several critical matters as parts of the pillars of ESG.
Diversity and inclusion have recently gained more recognition after the upending of the global workforce by COVID and the unusual turn the general workforce has taken.
The quest for a diverse workforce is to avail individuals of similar opportunities at meaningful work and not disparage factors such as gender, religion, race, and all other divisive elements. Find out what’s ongoing with the ESG diversity target and how well companies comply.
The ESG diversity targets propose an enhanced diversity within the workforce established across broad ethnic and social backgrounds. It is believed that sustainability can be attained with a diverse and inclusive culture in the workplace, giving individuals equal opportunities to fair wages, opportunities, and support.
According to research, diverse companies are more likely to attain creativity and awareness of consumer interest. It also gives way for better contribution and an assortment of insight into the other aspects of sustainability— Environment and Governance.
In tune with this, Diversity reports have become more necessary as investors looking for sustainable franchise will focus more on the various aspects of the social pillar of sustainability.
Based on recent data, only 15% of companies have adopted the ESG Diversity Target. In the lead are the United States, Japan, and Australia with 242, 227 and 191 companies respective. The United Kingdom barely catches up with 125 companies, with Germany at the bottom of the top 5 with just 92 companies adopting this target. Amounting to a total of 1655 out of 12,000 companies, one can surmise that the momentum for the diversity targets is relatively low.
Well, this can be attributed to some reasons. Historically, sustainability has focused more on the environmental aspect, and social aspects have only recently seen more attention. Therefore, we can agree that companies haven’t got sufficient time to recalibrate and redefine their sustainability goals as regards diversity and inclusion targets.
Diversity as a part of sustainability goals for companies might require a total overhaul in their policies and HR guidelines which can consume time and resources. In addition, the overhaul in workforce composition to include more racial, ethnic, and gender mesh can be cumbersome as companies try to balance skill levels, capabilities, and a diverse workforce.
Another bottleneck is the inability of many companies to improve their diversity profile as they have been unable to strategize and decide on the best practices that the company can adopt .Usually, this kind of target is an excellent strategy with action that requires full compliance. However, companies may also be struggling and undecided about the metrics used for the diversity report, which makes it difficult for these companies to meet their diversity targets.
Companies adopting ESG Diversity Target are primarily considered a work in progress. While data reveals a seemingly low percentage, as time proceeds, companies’ efforts and results of diversity inclusion as a part of sustainability goals become more evident.
California’s legislation requires a public company based in California to have at least one female director on its board. It is also more likely that we see more specific requirements imposed by agencies and investors setting a specific benchmark to help assess diversity.