At Modern Governance Summit 2021, we explored recent trends in diversity, equity and inclusion in business as well as the overarching importance of environmental, social, and governance (ESG) issues. Throughout our various sessions, we highlighted the perspectives of experienced and forward-thinking business leaders, activists and thought leaders in this space. Taken together, we have summarized our pointers in three key takeaways:
- Work proactively
- Think holistically
- Plan for the long term
ESG regulation is coming, and so are increased mandates on diversity. Increasing diversity throughout organizations, particularly at the board and senior leadership levels, has gained traction in the last few years and will continue to do so as countries across the globe set requirements and mandates. The same can be said for ESG, with legislation and calls for action around climate change and social justice continuing to gain momentum.
These pressures from governments, regulators, investors, employees and other stakeholders will only intensify in the coming years. Come up with a plan now and equip relevant teams and leaders with the tools they need to succeed will ensure your organization is operating at an advantage as regulations and mandates go into effect.
It’s crucial to take a holistic approach to incorporating DEI and ESG throughout all levels of your organization, and to think about DEI and ESG as part of your larger company strategy, and not in their own silos. ESG and DEI have implications for almost every single aspect of your business, from talent acquisition to risk and compliance to public relations and ultimately to the success of your company overall. Ensuring that your DEI and ESG efforts don’t operate in a vacuum will ensure that the benefits of robust ESG and DEI plans, goals and metrics will be reaped by every area of your organization.
“We have to think of ESG less of a compliance checklist, and more so as part of the culture of an organization. It will require more than just a sustainability department. It all has to come together to an actionable, measurable program.” John Rudy, VP-Legal, Corporate Counsel & Assistant Secretary, Wynn Resorts
Plan for the Long Term
As you create and execute strategies around DEI and ESG, it’s important to think about the long term. ESG should not be considered merely a one-time check-the-box exercise, and therefore needs to be incorporated into your organization’s plan for long-term value creation. The effects of reducing carbon emissions, for example, will take years to materialize and measure. Similarly, when thinking about your company’s plan to support diversity, equity and inclusion, it should mark not only short-term gains that can be achieved, but also lay out a long-term strategic framework. There is always a higher standard to achieve and to maintain.
Matt DiGuiseppe, Vice President of Research & ESG at Diligent, explains how boards can facilitate ESG initiatives into strategy in this episode of Inside America’s Boardrooms.