Why DEI Needs ESG

A year of learning. A year of introspection. A year of reckoning.

As a society, we have collectively learned so much this year about the real, systemic lack of equity in our institutions, laws, policies and workplaces. We have grappled with the fact that it has taken this long for so many of us to understand the realities of people of colour. We have, most importantly, made commitments to do better.

Most mid-size and large organizations have had diversity, equity and inclusion (DEI) policies for some time. These have included everything from using inclusive language in job descriptions, to diverse hiring quotas, to internal affinity groups designed to create welcoming spaces for minority groups in the workplace. And yet, little has changed. People of colour remain significantly underpaid compared to White people doing the same job. Less than one percent of Canadian corporate leaders are Black. Recent immigrants are almost twice as likely as those born in Canada to experience food insecurity. Our efforts, while well intended, are not making the inroads we hoped.

While some progress has been made in the pursuit of diversity, true inclusion and equity remain on the horizon for many organizations. What’s the difference? It can be described this way: diversity is being invited to the party. Inclusion is being asked to dance. While having visible diversity within an organization is beneficial, steps must be taken to ensure that varied skills and perspectives are welcomed and incorporated for both employees and the business to reap the benefits.

As for equity, we like this explanation from advocacy group PolicyLink: Equity is “just and fair inclusion into a society in which all can participate, prosper, and reach their full potential. Unlocking the promise of the nation by unleashing the promise in us all.”

We are seeing a renewed focus on DEI efforts in many organizations, as we should. But without a fundamental shift in how we ‘do’ DEI, are we doomed to repeat the mistakes of the past? This is where ESG can help.

Many organizations don’t see the need to focus on ESG when they have a DEI strategy in place. It feels superfluous, a distraction from the important work at hand. However, an ESG strategy can be a fundamental component in creating the cultural change required for DEI to work. Here’s why.

ESG supports people

A holistic ESG strategy sees employee wellbeing as central to the wellbeing of the business. When team members can meet their living needs, have the same opportunities to advance as their peers and feel supported by their employer, they perform at their best.

ESG can help bring the equity component of a DEI strategy to the fore, because it is based on the premise that a business thrives when all people can reach their full potential.

ESG supports processes

The ‘G’ – governance – component of ESG may be the least talked about, and least understood. What sustainable governance can achieve for businesses is systems and processes that are transparent, equitable and measurable. Good governance supports better decision making, and allows for course correction when the outcomes don’t match the objective. You can see where we’re headed with this – sustainable governance is a must-have to keep DEI initiatives on track and achieving what they set out to do.

ESG supports communities

Your business is bigger than the four walls you operate within. You have an impact on the community around you, both intentional (economic contributions, social initiatives) and unintentional (the waste you produce, the traffic you create). As the CEO Blueprint for Racial Equity notes, businesses should be asking themselves, “What are the intended and unintended impacts of our products, services, operations, policies, and practices on people of color and low-income communities?”

Communities look to organizations to show leadership on important topics, and a strong ESG strategy can ensure that your DEI efforts aren’t limited to your staff list, but lift up the community that supports your business.

ESG supports your brand

Ultimately, your ESG strategy is a statement about what you stand for as an organization. It shows your stakeholders that your brand is not just about making sales or securing donations, or making empty statements about diversity and inclusion. ESG is how you breathe life into your values, creating an environment where all people can reach their potential today, while making space for future generations to reach their potential as well.

Have you found that your ESG strategy supports your DEI initiatives? We’d love to hear about how it’s worked for you.