Diversity and inclusion
Diversity is the practice of employing people by appreciating what makes them different in terms of age, gender, ethnicity, religion, disability, sexual orientation, education or national origin. Inclusion relates to making sure they are empowered to be able to take full part in the business process. Diversity is about being invited to the party; inclusion is about being asked to dance.
Diversity can take many forms, led by employing people from different races, nationalities and cultural backgrounds, and having a good mix of men and women across job functions, from the boardroom down. It means a clear non-discriminatory commitment to accept employees regardless of race, sexuality, religion, gender, disability or any other distinguishing factor. It can also apply to age by trying to have a good mix of people of differing life experiences, targeting a proportion of the workforce to be over 50s or under 30s.
In some jurisdictions, having a quote of employees from non-white or other ethnic backgrounds through ‘positive discrimination’ has been practiced to promote diversity and avoid issues such as racism. This has been common practice in the US since the civil rights era. Following the end of apartheid in South Africa, ‘black empowerment’ similarly led to a policy of directly discriminating in favor of black candidates for jobs and business start-ups to improve diversity.
Avoiding (and enforcing) bias
Many employers also present job candidates to interview boards without disclosing their names to avoid bias from names associated with particular social groups. Some also insist on including a quota of women in interview shortlists to maintain balance. However, some professions do continue to attract disproportionate levels of men and women; for example, the majority of airline pilots are men while the majority of airline cabin crew are women.
Gender diversity and the pursuit of gender equality has been shown to produce results. Research by the Robeco Gender Equality Equities strategy showed that companies which employ more women, particularly in the more senior positions, are more profitable. Companies with high levels of diversity on all levels are also targeted by investment strategies which follow the Sustainable Development Goals, particularly SDG 5: Gender equality; SDG 9: Decent work and economic growth; and SDG 10: Reduced inequalities.
Inclusion for all
Inclusion is an organizational effort in which different groups or individuals from different backgrounds are culturally and socially accepted and welcomed. It means ensuring that all employees can fully contribute to the decision-making process according to their role, and do not feel ignored or sidelined.
Seeking improvements in diversity and inclusion at investee companies is a major engagement theme for Robeco’s Active Ownership team in 2022. The engagement will aim to improve embedding diversity and inclusion in companies' human capital strategies, setting clear targets to strengthen practices and outcomes.
The engagement will also ask companies to measure and disclose meaningful data and outcomes related to workforce composition, promotion, recruitment, retention rates and equity pay practices.
