At the end of November, Wilful hosted a roundtable discussion with some of the leading voices from the D&I and Sustainability space. Attendees represented a number of different sectors as diverse as advertising, insurance, private equity consultancy and luxury. The discussion centred around the connectedness of D&I and Sustainability and why it is time to break down the silos between the two functions.
The legal definition of sustainability used to be about business continuity and resilience, whereas now it’s widely understood to be about equitable access to the earth’s resources without compromising future availability. New legislation that mandates ‘double materiality’ reporting means businesses can’t keep borrowing from the future.
Equity and leaving no one behind (SDGs) is where sustainability and D&I are best understood to intersect. Sustainability professionals view inclusion as part of what it means to be sustainable, but very few D&I roles currently sit within sustainability. This is starting to change very slowly, but even where it is happening, it is often the case that the equity issues of social justice are viewed as being too political to sit comfortably within a corporate sustainability mandate.
Outside of some sector bright spots, D&I has slipped from the board agenda and sustainability has moved in to occupy what little leadership head space there is available. The overwhelming geopolitical and climate ‘polycrises’ are distracting leaders with what they view as more immediate concerns. Many are leaning into carbon as the ‘new’ thing to focus on. Environmental threats have shunted D&I aside when they should be front and centre, bringing diverse perspectives, empathy and problem-solving to one shared table.
Here are some of our observations from the discussion:
Challenges:
- Present bias: Markets are built on short-term results: Greed, fear and desire for immediate results to blame.
- Kicking the can down the road: Sustainability and D&I are not viewed as core strategic imperatives, they are seen as nice to-haves when times are good, and a distraction in difficult trading conditions. Many leaders are choosing not to act and leaving it to their successors to pick up.
- Politicisation: ESG and D&I have become politically charged so easy to park as being ‘ too divisive’ for clashing stakeholder agendas.
- Credibility gap: Leaders pay lip service, but they don’t fundamentally believe that changes are necessary because they’ve come through a system that is part of the problem.
- Organisational design: The issues that make up environmental, social and governance are too complex and distinct for any one person to tackle, but they need to be worked on together, not in functional silos.
- Acronyms: DE&I, JEDI, ED&I, D&I look simple next to all of the sustainability standards and technical terms which are too numerous to mention. Clique-y jargon needs a workaround to break down silos.
Progress:
- Money talks: Power of investors to effect change – many pension funds, family office, private capital prioritising conviction investing.
- Regulation is helpful: Legislative and reporting pressure forcing prioritisation, even if it is currently coming from a compliance rather than an opportunity mindset. Culture is on the agenda but hard to mandate.
- Ethical shift: Good business values are increasingly important to consumers which helps attract investment capital (e.g., B Corps).
- People power: Talent also increasingly attracted by ‘good’ businesses which translates to lower costs and therefore quantifiable benefits which is useful in making the business case
- Risk mitigation: Litigation and reputational risks are on the rise from activist stakeholders.
Insights:
- Educate on interconnectedness: Sustainability ensures equitable resource access and aligns with long-term profitability and resilience.
- Dislocation: The risk of failing to link big issues risks new and harmful unintended consequences. We need to embrace social justice to prevent disproportionate impacts on specific groups.
- Recognising guilt: There may be a lot of guilt among people who have been well served by the current system – asking them to acknowledge it is broken challenges their identity.
- Dissonance in leadership: Remind leaders to walk the talk, or risk being called out. Not enough to focus only on the outward actions of the business.
- Speak the language of business: Rather than quantifying equity, focus on the ‘proof’ of the business case and success stories counter sceptics.
- Value creation: Shift from risk to opportunity narrative to drive optimism and positive sentiment which is so critical for business confidence.
- Personal connection: Call people in, not out. Use storytelling to connect at a visceral level to break through barriers.
Next:
Wilful will be hosting a follow up event to discuss this topic further on 27 March 2023. If you would like to join the discussion you can sign up here.
