Why DEI matters NOW
Author: Lisa Argrette Ahmad, Founder & Principal of Second Wave Advisory
Exiting the COVID-19 Pandemic, companies are launching many initiatives to position themselves more competitively for the future. Diversity, equity, and inclusion (DEI) is just one of many efforts, including digital expansion, supply chain reengineering, cybersecurity, and more.
But why do DEI initiatives matter, and how can their successful implementation help your company to win?
DEI fits squarely within the current conversation among Fortune 500 CEOs and their boards, industry experts and the media, and public and private companies alike, on Environmental, Social, and Governance (ESG) risks and opportunities. Business leaders agree: ESG is the area that company executives must focus on if they are striving for more stable returns in the face of economic disruptions and shifting financial markets. A company’s future financial sustainability and long-term value are increasingly determined by its values and performance around non-traditional and non-financial factors.
In December 2020, Larry Fink, the CEO of BlackRock — the world’s largest investment management company with over $8 trillion under management — wrote of his “firm-wide commitment to integrate ESG information into our investment processes.” Consistent with the investment managers’ mission of improving the long-term financial outcomes of their clients’ portfolios, BlackRock is creating indices, tools, and rankings for both public and private market companies to measure and incorporate material ESG information into their investment decisions.
ESG is now an important lens through which investors, consumers, employees, and other stakeholders are making decisions about their time and money. Where do investors want to invest their money? Where do employees want to work? These questions are a way of determining if companies are committed to a greater purpose, such as climate change or waste management, DEI, product liability, and board quality.
DEI initiatives matter, not just because there is a moral imperative to respect and value one another regardless of our ethnicities, genders, sexual orientation, age, etc. When companies embrace DEI and implement systems that reinforce it, they can expect:
measurable increases in employee engagement and participation,
measurable increases in creative problem-solving and innovation, and
increased growth, competitive advantage, and a healthier bottom line.
DEI is the one initiative you want to prioritize. Investing in DEI now, in fact, is the way to win!
This article is also featured in LTHJ Global’s blog posts.
