Author: albertopasino

Author: Aniela Unguresan

Founder, EDGE Certified Foundation

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At the end of April, the Council of the EU adopted a new pay transparency directive, with clear rules on pay gap reporting and remediation that talk about unexplained gender pay gap and intersectionality – elements already central to the EDGE Certification methodology and standards. This is how the era of ‘brutal transparency’ around pay equity begins.

While equal pay for equal work or work of equal value is nothing new in the EU, the implementation and enforcement of this principle has been an ongoing battle due to a lack of transparency. This directive addresses these challenges by talking about the need to be transparent in reporting and the determination to take clear remedial actions if the unexplained gender pay gap exceeds plus or minus 5%.

The EU directive also talks about fines for employers that don’t follow the rules. This is not something to be taken lightly considering that GDPR, a directive with similar penalties for non-compliance, just fined Meta €1.2b for breaching its rules.

Crucially, the new directive talks about intersectionality, the combination of multiple aspects of diversity, which has been included in the regulation for the first time, and it has a particular emphasis on gender and working with a disability status.

What does the new EU directive say?

• Organizations with more than 250 employees must report their gender pay gap annually.
• Organizations with more than 150 employees must report every three years (this will eventually be extended to companies with more than 100 workers).
• Organizations with a pay gap of more than 5% must conduct a joint pay assessment with workers’ representatives.
• Workers who have suffered gender pay discrimination can receive compensation, including full recovery of back pay and related bonuses or payments in kind.

In addition, the burden of proof in pay discrimination cases will now fall on the employer. The organization must prove that they have not violated EU rules on pay transparency – or face “proportionate and dissuasive” penalties.

EU countries have up to three years to adapt their national legislation in response to the rules.

The way in which EU regulations are rolled out by member countries is often misunderstood, so it is important to point out that EU member states cannot change the directive or refuse to follow it. A directive, by definition, is mandatory. They can change the modalities of application only (for example the level of fines or the institution that an organization must report to).

What they can’t change is the requirement to report, to analyse intersectionality or to take action if the unexplained gender pay gap is plus or minus 5%. Change is here.

The need for independent verification is coming

Third-party verification has never been more important – and the EDGE Certification methodology and standards are already completely aligned to the EU regulations.

While this is an EU directive, it will raise the expectations of workers at global organizations. If an enterprise company is taking very clear actions to remediate pay inequities in its European offices, then the talent working in Hong Kong or Brazil, for example, will demand the same treatment, the same level of transparency and the same remedial action. 

This directive therefore marks the beginning of a new era for DE&I. People across the world will start talking about the impact of this regulation. And organizations that prioritise universal transparency on pay equity across their company will be at the forefront of this welcome shift.

EDGE Certification

EDGE Certification is an independent third-party verification that gives organizations a universally recognized symbol of their commitment to DE&I.  

There are three levels of EDGE Certification to recognise the organization’s DE&I maturity and their commitment, progress and success. EDGEplus Certification can be added at any level to show the organizations pledge to tackle intersectional equity as well as gender equality. 

Organizations preparing to become EDGE Certified will undertake a regression analysis of salary and pay to assess unexplained gender pay gaps. This is conducted using standard variables with the option of adding variables specific to the organization.  

This methodology already aligns with the EU’s pay transparency directive.

Working towards pay transparency

In past years, the biggest hurdle to pay equity was agreeing on a methodology. In the application of these new EU regulations, however, the methodology becomes clear. The most difficult part is now bridging the gap between total opacity and total transparency when it comes to pay and its various components. 

Pay equity analyses are usually conducted behind closed doors, under deep layers of privilege, especially in the United States, but also in some parts in Europe. So, how do we move from here to something that is communicated transparently? How do you equip managers to understand pay equity and what the company is doing towards achieving it? And for employees, how do you equip them with a way to ask for a pay equity review in the same way in which they might ask for their annual leave to be approved? 

The answer is clear DE&I goals and constructive, constant communication. Having these conversations internally means employees don’t have to go to the media or a judge to express their dissatisfaction or achieve what’s rightfully theirs – it becomes a normal part of working life. 

It is therefore essential to ensure that your employees are aware of your Equal Pay Policy and understand your actions and commitments in this area.

Managing pay transparency

Transparency is a requisite for employees to judge whether they are being treated fairly. This means that being proactive is essential.

To communicate in a meaningful and credible way about your proactive management of pay equity it is essential to gather objective evidence on where you currently stand by conducting a pay equity analysis which can include gender but also other aspects of diversity for which statistical data is available such as ethnic background and origin, sexual orientation, working with a disability, and nationality.

Once you understand your current status, you can create a pay equity narrative, which can be regularly shared with employees. These communications can explain how the organization is proactive in measuring, analyzing and reporting on equal pay data, and how detected cases of any unexplained pay gaps are being systematically remediated.

The EDGE Certification process brings credibility to this communication through the independent verification of the organization’s pay equity analysis.

This is how you start to turn an DE&I aspiration into a deliverable.

How to proactively communicate on pay equity

• Ensure that senior leaders communicate internally and externally on a regular basis about the organization’s commitment to pay equity and how this relates to the overall equality journey.
• Provide training to line managers to help them to make the right pay and/or bonus decisions and enable them to talk confidently to their teams about the rationale and fairness of pay processes and outcomes.
• Provide different opportunities for discussion on the topic so that employees can ask questions and understand the basic concepts and terminology around gender and intersectional pay equity.
• Identify ways to ensure that the information you provide is accessible and easily understood – use plain language, infographics and videos and communication across as many channels as possible.
• Share pay information that is not confidential or related to individuals, such as pay spines and salary bands, with your employees.
• Publish data, externally and internally, on your identified pay gaps and set out your action plan to address these, for example in your Annual Report.

Achieve transparency on pay equity with EDGE Empower

The management of pay equity must be an ongoing business objective, integrated within your organization’s policies, processes and practices and kept under systematic, constant review. Engrained in the EDGE Certification methodology and standards, EDGE Empower helps organizations to achieve this.

It is the complete DE&I software-based solution that enables organizations to bring the same discipline and rigour to DE&I as they would to other business-critical missions and to become eligible for EDGE Certification.

Wherever you are in your DE&I journey, discover how EDGE Empower can help you achieve your DE&I goals. Book a demo, today.

Book a demo

Wherever you are in your DE&I journey, whether at the very beginning or further along, EDGE Empower helps accelerate your progress, and through EDGE Certification visibly prove it – applying the same discipline and rigour that you would to other business-critical missions. Learn more by booking a demo, today.

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Author: Aniela Unguresan

Founder, EDGE Certified Foundation

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There’s a truth that needs to be shared: you can’t have pay equity without balanced representation. It’s a simple fact that many organizations seem to overlook. As a consequence, leaders will conduct a pay equity audit, declaring it as the first stepping-stone in their Diversity, Equity and Inclusion (DE&I) journey, with broader aspects of DE&I to be addressed at a later date. 

By focusing on the portion of the pay gap that is adjusted for objective factors – such as tenure, performance, level of education, complexity of the job and type of job etc – they will meet their compliance-related goal. But by demoting the issue of representation to a later stage in their journey, organizations will inevitably see inequities return.   

In this article, we explore some of the reasons why pay equity is not enough to deliver long-term, sustainable DE&I progress and what organizations should do to make a true commitment to change.  

What is pay equity?

Pay equity refers to the principle of providing equal compensation for employees who have similar job functions. Put simply, it means equal pay for equivalent work – no matter what the employee’s gender, age or ethnicity. 

The term pay equity is most used in relation to the gender pay gap. There are laws in many countries that require businesses to report publicly on their pay gap, which is one of the reasons that leaders often address pay gaps before other aspects of DE&I.  

Sadly, often this is where their DE&I journey starts and stops. Why? Because the focus is on legal compliance and not on commitment to diverse, equitable and inclusive workplaces for all. 

Choose commitment over compliance

When organizations start with a pay gap before looking at broader issues, what they often mean is that they will be looking at the pay gap adjusted for objective factors, such as:

• Tenure
• Performance
• Level of education
• Complexity of the role
• Type of job. 

In other words, organizations will be looking at the portion of the overall pay gap that can be explained by career and role-related characteristics. They will then calculate the portion of the overall pay gap that cannot be explained by any individual personal characteristic that is not strictly related to the job, such as gender, race and ethnicity or nationality. They will then address those pay disparities.

This approach is taken because equal pay for equivalent work regulations mainly refer to this portion of the pay gap that cannot be explained by career and role-related characteristics.

The downside of this approach is that, after adjustments, an organization where all top managers are white men – with women and diverse talent in lower levels of responsibility and support functions – will still be recognized as providing equal pay for equivalent work. Sadly, many organizations see this as ‘job done’.

In truth, though, pay equity is a necessary stepping-stone for compliance but is never the place to go for proactive management of DE&I in the organization. It is not enough for commitment, for positive impact – that’s because there is no such thing as closing the pay gap without closing the gap in representation.

There is no such thing as closing the pay gap without closing the gap in representation.

Communicate your intentions

If your organization’s ambitions are to do only what is required for you to continue to legally operate as a business, then be honest and transparent about this. But if you want to claim more than compliance – to claim commitment – there is no such thing as baby steps.

Organizations must ask themselves what their intentions are: are we running pay equity analysis to manage our risk? Or are we committed to investing energy and resources into creating a more diverse, equitable and inclusive workplace? These are two fundamentally different directions:

• Pay equity is about managing risk for the company and staying on the right side of the law
• An effective DE&I strategy is about creating a workplace where people thrive, with DE&I as a source of creativity, innovation, resilience, and intelligence. 

All organizations have their priorities. But if managing risk is yours, don’t claim proactive investment into DE&I.

Don’t dissociate diversity from equity

While some organizations will end their workplace equity journey at an adjusted pay gap, others remain dedicated to a longer journey. These organizations may truly intend to tackle representation and other issues, but by pushing these challenges until after they work on unfair pay practices, they dissociate diversity from the issue of equity. And again, that can affect the long-term value of the organization’s DE&I strategy because these issues cannot be effectively tackled in silos.

So, does that mean organizations must address all DE&I issues at the same time?

Not necessarily. It is understandable that organizations will prioritize pay equity. It is the most visible part and a legal requirement – it gets reported, it is published in annual reports, investors are looking for it, employees and potential employees want to see it.

However, to address pay disparity at its root, these organizations must therefore set a timetable for their DE&I goals. Pay equity one year, diversity the next, for example. This is where an integrated software-based DE&I solution like EDGE Empower can help by offering such benefits as:  

• Trackable DE&I priorities and roadmap
• A rigorous and proven data-led DE&I strategy
• Dashboards that provide a consistent view across dimensions of diversity and different countries of operation
• A framework for effective DE&I reporting.

In addition, through EDGE Certification, organizations can gain visibility and credibility through independent verification by third-party auditors.  

A true commitment to DE&I means applying the same discipline and rigour that you would to other business-critical missions. And pay equity is never enough to proactively drive the DE&I agenda. 

Pay equity is never enough to proactively drive the DE&I agenda. 

Organizations that are not going beyond pay equity limit themselves greatly in the speed of change that they can see in their organization. They similarly limit themselves to how they can make their efforts be valued by their diverse stakeholders because they are putting effort into respecting the law, but nothing else. 

Pay transparency is an instrument of public policy

There is often confusion between public policy instruments around pay equity, and instruments that companies must adopt to practically manage pay equity.

When the UK government said that organizations must publicly publish the medians between men and women, it was one of the smartest public policy instruments ever.

Indeed, the government can’t go into every business in the country to force equal pay for equivalent work. What they could do is name and shame, which was precisely the purpose of this pay equity public policy instrument: naming and shaming. Companies were saved from the embarrassment of being called out for doing something illegal, but the point was still made.

However, organizations must not base their own pay equity analysis and methodology on reporting requirements on median and average pay because they were never intended as an instrument to practically manage pay equity. The role of public pay equity policy is not to consult companies on how to manage their pay equity – their role is to see on which side of the fence you are as a business.

So, there must be a clear distinction between the compliance and name-and-shame instruments put in place by governments and the proactive management of DE&I.

Compliance is important, but only disruption can bring change. Requirements for public policy don’t go far enough to provide detailed insights into pay at your organization. That’s why EDGE uses a regression analysis to measure pay equity. Because it’s a detailed analysis for organizations to remediate and understand what actions they must take.

DE&I investment is cost-effective

We all live in a world of limited resources. Many organizations aren’t necessarily making a moral choice to only address pay equity with an adjusted pay gap and then stop. They are prioritizing what they must do by law because they need to spend their money carefully and wisely.

The issue with this is that this approach is an unwise utilization of resources – your attention may be focused for a period, but it becomes costly over time. Why? Because DE&I can’t be tackled in ‘remediation mode’.

Without resolving the systemic issues related to how you attract, develop, retain, and motivate a diverse pool of talent throughout your pipeline, you effectively give your organization all the chances of recreating and repeating the same problem the next time you hire.

By failing to get to the root causes of inequalities in the workplace, you will always be in this ‘remediation mode’, forever creating something that cannot be undone.

Put simply, if your organization keeps treating the symptoms, then those symptoms will appear again and again.

If you are interested in accelerating and visibly proving your DE&I progress, no matter where you are on your journey, EDGE Certification powered by EDGE Empower can help. Book a demo to discover how you can stop treating symptoms and instead find a cure for inequity in your organization.

Book a demo

Wherever you are in your DE&I journey, whether at the very beginning or further along, EDGE Empower helps accelerate your progress, and through EDGE Certification visibly prove it – applying the same discipline and rigour that you would to other business-critical missions. Learn more by booking a demo, today.

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Author: Aniela Unguresan

Founder, EDGE Certified Foundation

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In previous years, commitment was all that was required for an organization to be considered a leader in Diversity, Equity and Inclusion (DE&I). It was seen almost as an act of courage. This then shifted to measuring ‘effort’, and specifically what actions an organization was taking to drive change. Now, the focus is firmly where it should be: on impact.

This move from commitment into action into impact are the stages each organization must go through in measuring its DE&I maturity. It doesn’t matter where you start. What matters is that you make a start in the first place and keep up the rhythm of transformation.

There’s movement, and times have changed. Women are speaking out more, men are supporting us more than ever, and I think that’s all going to lead to positive changes. Freedom and progress can go away immediately. You always have to know it’s in a tenuous position and keep moving forward. We need every generation to be activists, and nowadays everyone’s an influencer so you never know where the inspiration is going to come from. And if progress slows down again, well that will be another challenge we have to overcome.

Billie Jean King, EDGE Certification ambassador

A DE&I maturity model is a barometer for organizations, a framework that measures an organization’s progress in achieving equity. This could be focused on a binary view of gender or on intersectional gender equity, which also considers race/ethnicity, gender identity, working with a disability, LGBTQ+, nationality and age.

When organizations make a conscious decision to progress their DE&I maturity, some will naturally be further along their journey than others. This will be due to external factors such as industry, geography, public policies and regulations, reporting requirements in the countries where they operate, local culture and more.

For example, an organization operating in a country where gender pay gap reporting is mandated will be able to assemble an action plan on pay equity sooner than in an organization collecting this data from scratch. For this reason, there may be nuances for global organizations – different offices and divisions may be at different stages of their DE&I journey depending on where the operate.

Though starting points vary, every organization must pass through the same three stages to achieve DE&I maturity: demonstrating commitment, showcasing progress and celebrating success.

1. Demonstrating commitment

Every organization’s DE&I journey should start with laying out the purpose of that journey: why is it important? What does this mean to the organization? It also starts with buy-in at the highest level. Senior leadership must be committed to the journey before it even begins.

The next step is to get the lay of the land. It is important to have an accurate view of where the journey is truly starting from, because all the progress will be measured against this baseline.

What data does the organization already have available? What data isn’t available but can easily be collected? If there is data that cannot be collected, you can always start with an anonymised employee survey: how do employees across the diversity spectrum identify themselves and what are their experiences in the workplace? Where do the opinions of different groups align and where they diverge?

At this stage, it is useful to assess whether your organization has any actions or practices already in place around DE&I and whether you have made any public commitment to the topic, for example by signing the Women’s Empowerment Principles. Also, are you ranked as part of any ESG (Environmental, Social and Governance) benchmarking indices such as the Bloomberg Gender-Equality Index (GEI) or Equileap?

Lastly, commitment must come with transparency and accountability. Independent, third-party certification will keep the organization honest and ensure the journey toward DE&I maturity is rigorously measured. This will also allow the organization to communicate their progress and impact clearly and confidently – both internally and externally.

The first stage of DE&I maturity:

• Secure the commitment for gender balance and for DE&I more broadly
• Check the availability of data and existing policies and practices around gender – the binary definition and for any other aspects of diversity – and assess what public commitments you have already made
• Get independent validation of this starting point, no matter how far along your organization is.

EDGE Assess

Organizations certified at the EDGE Assess level of EDGE Certification have demonstrated that they are at this first stage of maturity. They have started their journey in a systematic, structured way using EDGE Empower. They hold themselves transparent and accountable and they make public their commitment to four DE&I pillars:

• Representation
• Pay equity
• Effectiveness of policies and practices to ensure equitable career flows
• Inclusiveness of the culture.

They may have chosen to make this commitment not only for gender, but for the broader diversity spectrum by adding an EDGEplus to their EDGE Certification level.

Through third-party validation, organizations at the EDGE Assess level have also committed to implementing an action plan. Two years after they start the journey and obtain their EDGE Certification, wherever that starting point was, these organizations will be ready to measure their progress by undergoing the EDGE re-Certification process.

2. Showcasing progress

With a commitment firmly in place, organizations should now be taking action – working to improve DE&I and demonstrating the first signs of positive impact.

To showcase visibly and credibly your DE&I progress, internally and externally, a baseline must already be in place. Without third-party validation at the start of your DE&I maturity journey, you cannot effectively measure how far you have progressed. However, with it in place you can move to this next stage of maturity by auditing the impact of your actions against this baseline.

This stage is not about having completed everything you set out to do. DE&I maturity takes time to achieve, and even then, the journey will never truly be over – there is always progress to be made. What is expected is that there has been a shift, a forward movement, and that there are clear examples of actions that have been taken with initial data to show impact.

The second stage of DE&I maturity:

• Demonstrate that actions have been taken to address imbalances
• Audit progress against baseline data
• Get independent validation of your progress to date.

EDGE Move

Organizations certified at the EDGE Move level of EDGE Certification are at the second stage of maturity. They have taken steps to make a positive impact on representation, pay equity, the effectiveness of policies and practices to ensure equitable career flows and inclusiveness of the culture. And they can visibly and credibly show their internal and external stakeholders progress on their DE&I action plan with a robust audit.

They may have chosen to make this commitment not only for gender, but for the broader diversity spectrum by adding an EDGEplus to their EDGE Certification level.

An EDGE Move Certification remains valid for two years, after which re-certification occurs.

3. Celebrating success

Commitment has been made; progress has been showcased. The third stage of DE&I maturity happens when your organization can demonstrate success – when you have delivered on your action plan and made a significant and positive impact on your organization.

To achieve DE&I maturity, you must be able to demonstrate impact with both qualitative and quantitative indicators. Without this, you cannot credibly celebrate your success. It’s not enough to tell your employee, investors, board members, customers, etc. that you have achieved workplace diversity, equity and inclusion. Evidence is everything: you must be able to prove your success.

For this reason, independent, third-party validation is crucial. You deserve to celebrate how far your organization has come.

A word of caution: DE&I maturity can, once achieved, also be lost if the positive results and impact are not sustainable over time. To maintain this level of maturity, your organization must be committed to maintaining the success they have achieved through continual measurement and analysis.

The third stage of DE&I maturity:

• Demonstrate that your organization has achieved its goals
• Get third-party validation of your success
• Maintain your commitment to DE&I.

EDGE Lead

Organizations certified at the EDGE Lead level of EDGE Certification have met every single standard across representation, pay equity, effective policies and practices and inclusiveness of the culture. They have achieved gender balance and have chosen to analyze intersectional issues relating to gender equity and other aspects of diversity through EDGEplus.

They have demonstrated their robust commitment to the S in ESG and are leading the way for DE&I.

An EDGE Lead Certification remains valid for two years, after which re-certification occurs.

I think we all have an obligation to continue to keep moving the needle forward, always.

Billie Jean King, EDGE Certification ambassador

Start your DE&I maturity journey

EDGE Empower is a comprehensive, software-based DE&I solution that will guide you through your journey and support you to become eligible for EDGE Certification at the EDGE Assess, EDGE Move or EDGE Lead, with or without EDGEplus.

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Author: Aniela Unguresan

Founder, EDGE Certified Foundation

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Making Your DE&I Goals Meaningful

Conversations around business goals – sales targets, growth targets, share of market targets, competitive positioning, and so on – are entirely natural. That’s how businesses run. You need to know where you go, how to get there and how you ‘course correct’ if you need to.

But talk about Diversity, Equity and Inclusion (DE&I) goals and the conversation suddenly changes – it becomes emotional and people around the table start to feel uncomfortable.

It doesn’t need to be this way. DE&I goals can be a driver of sustainable business success in the same way as goals to increase sales, increase market share or improve competitive positioning.

In this article, we explore some of the misconceptions around DE&I goals and offer practical advice for setting meaningful DE&I goals.

DE&I goals uphold the principle of meritocracy

Some organizations undoubtedly feel uncomfortable about setting DE&I goals. But why? This sad reality is founded in a critical misconception: that setting DE&I goals is contrary to the principle of meritocracy; that setting the goals will somehow lower the standards when it comes to the type of talents that we value.

However, talent, skill, competence, ambition and drive are equally spread – it’s 50% male, 50% female, and very diverse in terms of race and ethnicity, sexual orientation, age nationality, and working with a disability status. As such, the principle of meritocracy is not compromised by driving forward DE&I change. It is, in fact, supported.

Organizations should be seeing DE&I goals as a targeted, intentional and measured way to proactively manage the careers of high-potential, diverse talent as they move their way up in organizational settings that were not designed with their specific needs in mind.

In this way, DE&I goals allow organizations to take a firm step towards a genuine meritocracy, not a step away from it.

DE&I goals are a targeted, intentional and measured way to proactively manage the career of high-potential diverse talent.

How to set meaningful DE&I goals

1. Focus on outcomes

A DE&I goal is a key result that shows how an organization is moving towards the objective of DE&I. They should be both quantitative and qualitative:

• Quantitative DE&I goals relate to representation and where an organization stands on pay equity
• Qualitative DE&I goals relate to the inclusiveness of the organization’s culture and the effectiveness of their policies and practices for ensuring equitable career flows.

However, DE&I goals are not declarations of intent. A good DE&I goal must be about outcomes – how the culture of the organization is progressing towards being more inclusive and how the representation in the organization is evolving to include more diversity.

Stating that “DE&I is an important strategic objective for our organization,” is not a goal. A DE&I goal is a commitment to increase a company’s representation of diverse talents by X% or wanting to reduce the gender pay gap by half.

2. Create a timeframe

To be effective at driving change, DE&I goals must be measurable. Organizations must have a clear, specific way to track progress against that goal or target. And one way to do this is to make them time-bound. For example: “We want to increase the representation of diverse talents by X% within the next three years,” or “We want to cut our gender pay gap in half during the next financial year.”

A deadline is important because the moment it is hit, it triggers a meaningful conversation about how DE&I is advancing:

• If the goal is achieved, your organization knows exactly what it must continue doing for continued DE&I success
• If the goal has been missed, understanding why allows your organization to course correct.

For your outcomes to be truly measurable, your organization must have a way to track progress within a set timeframe – one that allows you to have those meaningful conversations about why you are, or are not, hitting your targets.

3. Ensure transparency and accountability

As with any business-critical goal, DE&I goals should be communicated to the relevant internal and external stakeholders. And that means there must be a clear mechanism of transparency around what those goals are.

There are many ways to set DE&I goals, but above all, they must be realistic. Many leaders believe that they must inject a high amount of energy into the system to change the status quo. But being too ambitious can mean that nobody in the organization truly believes that those goals can be met. Or that nobody really understood how those goals were set or how they were meant to contribute to achieving those goals.

So, while ambition is admirable and DE&I goals should be stretch goals, they must also be realistic and transparent. Employees at different levels and across different functions must have a clear view of:

• How those goals were set
• How they are expected to contribute towards reaching those goals
• The accountability mechanisms in place.

4. Consider intersectionality

It’s natural for organizations to tackle one aspect of DE&I at a time – for example through the lens of gender or through the lens of race and ethnicity – and set goals in terms of outcomes and results that are expected.

However, how can you dive deeper? Can you consider, for example, the representation of women in a certain age group or ethnicity, or coming from a certain part of the world, and the same for men?

It is important to be broad in terms of the aspects of diversity within your organization and base your DE&I goals on the characteristics of your workforce and the talent which is available for your country of operation and for your specific industry.

This can best be achieved by taking an intersectional lens when setting goals for your organization.

5. Think holistically

A common trap many organizations fall into is focusing on inputs. For example, they will say “We want to increase representation in hiring” and set a goal based on the input (recruitment) rather than on the outcome (representation).

The result of this approach is that diverse hiring may increase but that promotions have not been considered, and that high-performing talent exits the organization. Nothing has moved in terms of representation, despite the actions the organization has taken.

This is why it’s essential to consider DE&I holistically and unpack all the elements of the outcome you want to achieve. Instead of focusing on diversity hiring goals alone, for example, also consider promotions and retention. Ensure all inputs are working towards the common goal rather than tackling specific elements in isolation.

Without this holistic view, many organizations assume that they are in control when in reality, they are not.

The difference between mandatory and voluntary DE&I goals

It is important to make the distinction between mandatory DE&I quotas and voluntary DE&I goals.

Mandatory quotas are straightforward. They are time-bound and focused on important outcomes, which are board representation, pay equity and executive committee representation.

They are very powerful instruments – public policies that allow legislators to signal the importance of these issues for the health and wealth of that society. And, of course, these requirements are non-negotiable.

In contrast, DE&I goals set by an organization are, as with any other business goal, voluntary.

In this way, mandatory targets and voluntary goals work well together. Legislative requirements stay focused on a small number of ultimate outcomes – they represent the tip of the iceberg. And the voluntary business goals form the rest of that iceberg by allowing organizations to proactively manage DE&I within their company.

Legislation can help or to hinder what companies are doing, but quotas are not a replacement and are not a substitute for the efforts of the organization.

How to achieve your DE&I goals 

DE&I goals must be an objective measurement, time-bound, trackable and transparent, and with accountability mechanisms set in place. And this is where EDGE Certification powered by EDGE Empower can help, by providing:

• An analytical framework that allows your organization to understand its current status – benchmarking to understand what outcomes your organization can achieve
• Two-year cycles to ensure goals are time-bound
• Transparency and accountability through independent third-party verification of EDGE Certification
• EDGEplus, which looks at men and women as diversified groups and measures the intersectionality between gender and other aspects of diversity: race/ethnicity, gender identity, working with a disability, nationality, age, and sexual orientation
• A rigorous and proven data-led approach, shaped by leadership thinking and the experience of real-world practitioners, to ensure a holistic DE&I strategy.

Success fosters motivation

EDGE Certification works in two-year cycles because we know that setting ambitious but reachable goals within shorter timeframes can help your organization accelerate progress.

For example, if your organization has management levels with only 20% female representation, it is likely unrealistic to say: “We want to be to have a 50:50 male and female representation in the next five years across all the management levels.”

A more realistic goal would be “30:70 representation across all management levels within the next two years.”

Once that target is achieved, you can set a new one to achieve 40:60 representation in the following two years. And then two years after that is achieved, you can realistically aim for 50:50.

This keeps your organization focused on achieving the goals it has set and keeps you motivated by allowing you to demonstrate progress. This is also exactly how the three levels of EDGE Certification function:

• EDGE Assess – recognizing commitment
• EDGE Move – showcasing progress
• EDGE Lead – celebrating success.

Organizations achieving an EDGE Certification will analyse their workplace from a gender-binary standpoint. At any of the three levels, organizations may choose to deepen their analysis, through a gender and intersectional lens, by choosing EDGEplus.

Examples of DE&I goals and achievements from EDGE Certified organizations

• L’Oréal has made multiple public commitments to DE&I, including: “Accelerate the inclusion of people with disabilities,” and in France, increased the direct employment of people with disabilities, from 4.33% in 2010 to 5.40% in 2021.
• One of Capgemini’s ESG priorities is to “Enhance a diverse, inclusive and hybrid work environment,” and the organization aims to achieve 30% of women in executive leadership positions by 2025.
• The European Investment Bank state that: “Improving gender balance and working towards gender equity is a social and business imperative for the EIB.” They reported an increase of women in managerial positions from 20% in 2012 to 30% in 2021.

More than 230 large organizations in 50 countries representing 24 industry sectors have attained EDGE Certification at one of the three levels of EDGE Certification. See the full list of EDGE Certified organizations.

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Wherever you are in your DE&I journey, whether at the very beginning or further along, EDGE Empower helps accelerate your progress, and through EDGE Certification visibly prove it – applying the same discipline and rigour that you would to other business-critical missions. Learn more by booking a demo, today.

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Author: Simona Scarpaleggia

Board Member, EDGE Strategy

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The 27th UN Conference of the Parties (COP 27) ended in disappointment, despondent delegates leaving Sharm el-Sheikh having promised much and achieved very little.

I was disappointed too, for it was yet another gathering of the most powerful nations in the world that failed to recognize that a global climate crisis will not be solved unless and until we fight inequality, and in particular gender inequality. Put another way, our planet, and the future of humankind, cannot be sustainable until we reach full gender equity.

So why is this the case? And what is the link between ‘sustainability’ and gender equity? Even before a tranche of COP participants committed to UN Sustainable Development Goals (SDGs) in 2015, UN Women had published multiple reports that proved that women are disproportionately affected by most, if not all, of the problems addressed by the SDGs.

When it comes to the climate crisis, in particular, it is women and children who physically suffer the most as a result of drought, floods, famine, and climate-related forced migration.

When it comes to the climate crisis, in particular, it is women and children who physically suffer the most as a result of drought, floods, famine, and climate-related forced migration. Their position is weakened; their vulnerability increases, and they are often subjected to terrible acts of violence in the stampede for survival. 

The effects of the climate crisis are not gender neutral. In fact, women are also ‘structurally’ used to minimize waste be it water, energy, or food and to protect nature.  

Moreover, most of the efforts and focus are on reducing the carbon footprint while ignoring other factors that impact the lives of people, and particularly women.  

Take the decisions made in certain developing countries regarding the use of stoves in rural areas. Traditionally, women cook over wood. Indeed, as many as three billion people worldwide use wood as their principal source of cooking fuel. But wood, as we know, creates emissions that are potentially harmful to a person’s health. Stoves appeared to be the answer, until it was discovered that the carbon emissions of the stoves were only slightly lower than those generated by wood, and so the project was scrapped. No-one seemed to look at resolving the issue another way. Had they considered more fully the impact on women and children’s health of burning wood, and simply fitted a simple and inexpensive filter to the stoves, they would have both reduced emissions and reduced the potentially detrimental effect on women’s health in one go. 

If we want to tackle climate change seriously and realistically, we cannot ignore women, their conditions, and their needs.

If we want to tackle climate change seriously and realistically, we cannot ignore women, their conditions, and their needs. In this climate crisis, women can be formidable agents of change. So what needs to be done? 

•  Firstly, we need to actively promote women’s representation in climate policy and decision-making. Women should be part of all the decision-making conversations. Their unique perspective, their holistic approach, their sense and sensibility should all be taken into account in devising future sustainability strategies. Representation matters. No decision should be taken about people (of any gender, age, race and ethnicity etc.) without those people having a say and being consulted in the process. 

• Secondly, we need to reduce the gender data gap. Data regarding the impact of climate change on population, on health etc. should be dis-aggregated by gender; only by doing this can we truly understand the existing imbalance and the consequences of any decisions taken. (It also makes sense to connect this data and measurements to show how a country, or an organization, is performing in relation to ESG, and their multiple existing intersections.) Data is key. It provides a more objective and reliable picture of the situation, and the results can be monitored, compared, and followed-up over time. It also reflects the importance of having more women and girls engaged in STEM careers.
• Finally, there needs to be cultural change. Men are ‘wired’ to set and respond to targets; women tend to see things differently, and are more holistically protective. Making it more culturally acceptable for men to ‘care’ about the environment, rather than wishing to destroy it, would be a revolutionary step, as would having women as part of the decision-making team. Institutions, organizations and indeed governments have a responsibility to make this happen.

Of course, gender is just one social category. A truly intersectional approach to sustainability must consider not just gender, but also other dimensions of diversity such as age, race and ethnicity, disabilities, and more. Those who are affected by the problem must be part of the solution, or the answers to some of the world’s biggest questions will never be found.

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Simona Scarpaleggia says that the day has come to end economic violence against women.

Author: Simona Scarpaleggia

Board Member, EDGE Strategy

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It is a sad indictment of the world we live in today that we have to have a special ‘International Day for the Elimination of violence against women’. That there is violence against anyone is shameful enough; that there is violence against women, and which needs to be recognized in an official awareness day, is somehow even more depressing.

Governments everywhere have a moral and actual responsibility to protect their citizens, and civilized society should see any forms of violence as abhorrent. But violence, of course, manifests itself in many different ways, physical and mental. One of the most insidious and subtle – and least talked about – is economic violence against individual women, and indeed against whole female populations.

According to UN Women, violence against women and girls ‘is one of the world’s most prevalent human rights violations, taking place every day, many times over, in every corner of the globe’.

According to UN Women, violence against women and girls ‘is one of the world’s most prevalent human rights violations, taking place every day, many times over, in every corner of the globe’. It prevents their full and equal participation in society, and the magnitude of its impact, both in the lives of individuals and families and society as a whole, is immeasurable. Economic violence, often seen as a sub-set of domestic violence, involves making or attempting to make a person financially dependent by maintaining total control over financial resources, withholding access to money, and/or forbidding attendance at school or employment.

Yet economic violence goes further than that, and some countries are guilty of creating legal barriers that prevent a woman’s full economic participation. According to the World Bank’s ‘Women, Business and Law 2022’ report, a shocking 178 countries maintain legal barriers that prevent women from being fully financially independent, and it is estimated that as many as 2.4 billion women globally don’t have the same economic rights as men. In 86 countries, women face some form of job restriction and 95 countries do not guarantee equal pay for equal work.

Many of the most guilty in perpetuating economic inequality are governments in the Middle East and Africa. When it comes to access to property and other assets, less than 50% of the economies in the Middle East and North Africa Region (MENA) account for gender differences in property and inheritance laws. This won’t come as much of a surprise, but there are countries much closer to home – in Europe or North America – who still persist in enacting laws that make women subservient to men, and wives subservient to husbands, in financial matters, not least access to state pensions.

Such unwarranted and inexcusable financial exclusion is expressed in many different ways: limiting, for example, a woman’s access to credit; denying them access to (or even opening) a bank account or owning a credit or debit card. This has several knock-on effects, not least blocking women’s access to healthcare, employment, and education. In many countries and communities this effectively excludes women from making financial decisions so that they become, what might be considered, a ‘non-subject’ when it comes to income, inheritance or property.

Women are denied the freedom to make their own choices because of the lack of material resources – and a lack of material resources leads to an undermining of self-confidence and self-worth, and all of the negative consequences this brings.

It is not an exaggeration to state that such coercive behaviour, which spans countries and continents, keeps women in a semi-slavery state, with no apparent escape. They are denied the freedom to make their own choices because of the lack of material resources – and a lack of material resources leads to an undermining of self-confidence and self-worth, and all of the negative consequences this brings.

Women are not only subjected to economic violence by their governments, but also by their partners and society at large. Being denied access to education means being denied the tools for understanding and managing economic matters. Obliging a woman to ask for money for any purchase – be it related to grocery shopping, the children’s education or leisure – and requiring them to justify every individual expenditure is both humiliating and damaging, as is the use of blackmail and threats meted out to woman for economic related reasons.

So what is to be done? How can economic violence against women and girls be ended? In 2016 and 2017 I had the honour of co-chairing the UN High-level Panel on Women’s Economic Empowerment. Financial exclusion and its consequences was one of the issues we discussed and for which the Panel provided a number of recommendations that are still valid today. 

In particular, we highlighted three key areas where urgent action was required:

• Legislation and social norms. Countries and institutions need to act to reform discriminatory laws and regulations that adversely impact women and would help bring about a change in social norms. Laws that hinder women’s access to secure land tenure, inheritance and property, for example, should be eliminated, equal pay legislation should be enacted, and the prohibition for women to do certain jobs should be removed. And there is much more that can be done in all sectors of the economy.
• Access. Besides guaranteeing access to physical assets, Governments and institutions need to act to guarantee women access to the same mobile and digital financial services technology that men currently take for granted. Women are currently denied access to some of the most basic tools, including online banking or even being able to fulfil simple tasks such as making payments into their own accounts (if they are allowed them!).
• Education. Financial education should be provided to all people, men and women, girls and boys, to ensure more equitable access to – and management of – financial resources.

Financial education should be provided to all people, men and women, girls and boys, to ensure more equitable access to – and management of – financial resources.

Eradicating economic violence against women has to be the objective of all countries and of all governments, in the developing and the developed world. There can be no excuses: it is right, it is fair, and it improves women’s lives. Perhaps more than this, it increases the prosperity of their family and their community and society at large.

Removing violence and delivering economic empowerment is essential to advancing freedom and democracy.

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EDGE Certified Foundation

IDB Invest was among the pioneers to use a gender lens and engage in environmental, social, and corporate governance (ESG) investing. Why do you consider gender equality, diversity and inclusion (GDI) in the workplace as material criteria in your investment and financing activities? How has this changed in post-pandemic recovery?

Alexandre Da Rosa: Since its beginning in 2016, IDB Invest has considered gender equality and, more recently, diversity and inclusion, as universal priorities in its operations. The rationale behind this lies in IDB Group’s mission of supporting inclusive economic growth in Latin America and the Caribbean. This means that we support these countries and the private sector in their growth and development journey. Strengthening diversity and inclusion is one way of doing that. Research has shown that businesses that are led by diverse teams – in terms of gender and ethnicity – yield better results. Moreover, the companies with higher performance tend to have more women in line roles than staff roles. (McKinsey, Delivering through Diversity, 2018).

The belief that diversity is one of the keys to business success has internal and external implications for IDB Invest. Internally, IDB Invest is EDGE Certified. This is a key instrument for us to have a standardized way of measuring our progress toward a more gender-balanced workforce. We are very proud to have been EDGE Move Certified this July. Externally, having GDI as priorities means that we strive to have an impact on women, men, Afrodescendant and indigenous and traditional people, LGBTQ+ and people with disabilities – in every investment we make.

Having a workplace that promotes equal access to opportunities plays a key role in priority sectors like tourism, where women represent 60% to 70% of the workforce [1], and agribusiness. These industries are labor intensive, and women play an important role in them. For example, employee attrition can increase credit risk; hence, GDI are material in many of the priority sectors in which we operate.

The importance of increasing inclusion has taken center stage in a post-COVID recovery environment. The service sectors, which require physical contact and have been the most affected by the pandemic, account for 30% of female workers in Latin America and the Caribbean. Since the pandemic began, we have experienced a 17.7% decrease in employment of women compared to 13.1% for men. This is happening in a context where women dedicate between 22 and 42 hours per week to housework and dependent care, while men dedicate 15 hours. Furthermore, we know that men’s employment is increasing at a higher rate than women’s. [2] Diversity and inclusion were an “angle” that we looked at in our investment strategies, but they are now essential to ensure that our financing is meeting the needs of a post-COVID reality: We must promote women’s employment and flexibility in the workplace. This is a key part of IDB Group’s 2025 vision: the reactivation of the productive sectors supported by gender equality and diversity.

What are the most important factors that can contribute to the large-scale adoption of gender balance, diversity and inclusion in the workplace and on boards of directors as key ESG scoring and reporting indicators?

Alexandre Da Rosa: Any type of instrument that can help scale the adoption of diversity and inclusion actions needs to provide evidence that there is a clear commitment from top management and/or boards for having a more equitable and inclusive workplace, and that the commitment is followed up with action. Three features that can help to ensure this and inform an ESG scoring are financial materiality, standardization and verifiability of the instrument.

As for financial materiality, we know there is a link between diversity in leadership and financial performance. Multiple studies by financial institutions, consulting firms and academia have proven the correlation.

When it comes to standardization of metrics associated with scoring, it is important to ensure comparability across companies, industries and geographies. Our Women’s Empowerment Principles tool, a self-diagnosis tool on gender equality, allows companies from all industries, geographies and sizes to understand where they stand in their journey. It provides them with best practices so they can start implementing them. Initiatives like the 2X Challenge [3] and particularly HIPSO [4] are also great examples of the effort to standardize the way the private sector understands the impact of female empowerment and measures it.

Finally, results should be verifiable, which is where third-party certification becomes relevant. It is a way of providing assurance to an investor that whatever metrics are being used are supported by accurate data and concerted efforts to conduct business inclusively. This last point is key in a post-pandemic context. EDGE Certification is an effective tool, as it manages to reunite these three attributes, particularly the last one.

How is EDGE Certification contributing to advancing your ESG agenda with your portfolio companies?

Alexandre Da Rosa: As investors we promote GDI in our investments in different ways, depending on what is most material (workforce, value chains or markets) to our client. Regardless of the focus area, our recommendations are always actionable and have indicators that allow us to measure progress. Consequently, our end-to-end Impact Management Framework [5] allows us to assess the potential impact of each investment in terms of GDI, and track and evaluate the impact over time. In this context, EDGE Certification, as well as other certification programs that we support that target equality in the workplace, such as the Gender Equality Seal from the UNDP, have four characteristics that we value as investors:

The first one is benchmark. Certifications such as EDGE provide an assessment of where the company stands vis-à-vis dimensions of gender equality that have been globally validated by an array of stakeholders: academia, investors, companies, talent experts and gender practitioners. This methodology drives our clients to fight any unconscious bias and discrimination in recruitment, one of our ESG requirements on labor and working conditions. [6]

Second, it drives companies to act on their results, as they cannot obtain the certification unless they have adopted an action plan that addresses the gaps. As investors we are interested in ensuring that our clients have a clear roadmap with actions and KPI’s to accelerate their journey toward gender balance, diversity and inclusion.

Third, certifications are applicable to all industries and geographies, by benchmarking companies across the world.

Finally, it requires a third-party verification, providing investors assurance of the reliability of the results.

How have you implemented this in practice? Can you share some successful examples?

Alexandre Da Rosa: We have supported clients in obtaining EDGE Certification by either financing the EDGE assessment, the implementation of the action plan, or by working with our clients in the selection of the actions that make the most sense for them to implement to reach the next level in EDGE.

We are proud to see that Danper, a Peruvian agribusiness company that we initially supported to take the EDGE assessment, is now seeing the value of becoming EDGE Certified and has not only maintained but also continued the path to recertification by itself. Danper is now EDGE Move Certified. For IDB Invest, this is a sign of success: What we see as an instrument to accelerate gender balance and for development, is seen by the client as value added to its business.

In addition to seeing the value of meeting gender balance criteria, EDGE helped first-mover banks in closing the gap in access to financing for women to take a holistic approach to gender equality, by looking at how these banks are performing internally on their inclusive policies and practices. EDGE Certification confirmed that clients like BHD León in the Dominican Republic are on the right path to achieving gender balance, making sure that what they are doing externally to address women’s financial needs is consistent with their internal efforts of equality. Today, BHD León has more than 37% female representation in management positions with profit and loss responsibilities, well above other banks in the region.

Last but not least, we issued our own gender bond in Mexico in March of this year. Being EDGE Certified sent a strong signal to the markets: IDB Invest is 100% committed to gender balance both internally and in our investments.

What impact have you seen from your gender equality, diversity and inclusion in the workplace investment and financing strategies to date?

Alexandre Da Rosa: Our investments in gender equality, diversity and inclusion have put the conversation about diversity at the forefront of financial negotiations. For example, IDB Invest only invests in private equity funds that have at least one woman on the investment committee. This has sent a powerful signal to the market: For IDB Invest, having diversity at the highest decision-making levels will make our investments better.

In addition, the use of blended finance has helped to encourage our clients to measure their gaps in the workplace though our Women’s Empowerment Principles tool [7] – which is particularly relevant when our clients are early in their equality journey – to identify their gaps and implement programs that promote the inclusion of female minorities in STEM fields. In at least four companies across the region, IDB Invest has seen how efforts to recruit more inclusively have produced results beyond the incentives IDB Invest has provided for them to start working on these issues. We have seen companies now in their fourth year of internship programs integrating women engineers in areas such as solar design and software.

In addition to driving diversity in the fund decision-making process, IDB Invest is mobilizing resources to target women-led businesses through financial instruments such as social gender bonds. IDB Invest has issued more than five bonds targeting women-owned and led businesses in four countries in Latin America and the Caribbean in addition to our own IDB Invest issued gender bond. More importantly, financial institutions have come to IDB Invest for financing and advice on how to increase the share of women-led companies in their portfolios.

Blackrock’s announcement on their investment strategy and gender balance, the Bloomberg Equality Index or Equileap Equality Index are practices and instruments that are being adopted across the financial world. Gender balance, diversity and inclusion are core part of our mission, and we will continue to work and promoted them across the financial world.

References:

[1] IIDB, “Más allá de unas vacaciones: el turismo como fuente de empleo”, 2018.

[2] IDB, “Observatorio Laboral COVID-19: Un año de COVID-19: ¿Cuál es la magnitud de la crisis laboral?”, 2021.

[3] The 2X Challenge is a G7 initiative that calls for G7 countries and DFIs to collectively mobilize $3 billion for women’s empowerment. It sets criteria so investments can be considered as mobilizers of private investment for women’s empowerment.

[4] Harmonized Indicators for the Private Sector.

[5] For more information, see our report, Managing a Portfolio for Impact.

[6] IDB Invest’s investments must meet IFC Performance Standards. In this case, we refer particularly to Performance Standard 2, which addresses non-discrimination and equal opportunity.

[7] The Women’s Empowerment Principles Gap Analysis Tool, created by IDB Invest, IDB Lab, UN Global Compact and UN Women, is a free diagnostic tool that provides a free assessment of companies’ policies and practices impacting gender equality.

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Diversity, equity and inclusion transform both employee experience and business results. Equity also faced unprecedented setbacks as a result of the COVID-19 pandemic, hence it is today even more important to foster a more equitable and inclusive workplace. A new partnership between Valore D and EDGE seeks to harness the potential for organizations that is unleashed by embracing DE&I.

Valore D and EDGE are proud to announce a new partnership established to monitor DE&I within the Italian corporate world and accelerate workplace equity nationally. This announcement comes at the conclusion of Italy’s G20 presidency, whose focus on people, planet and prosperity included a targeted assessment of gender in the workplace and in society at large.

Both Valore D and EDGE have a successful track-record in empowering organizations to turn diversity into a major asset. With over 270 member companies in Italy and a highly active programme and network, Valore D is the leading diversity-focused association in Italy committed to building a professional world without discrimination and in which gender equity and the culture of inclusion supports innovation, progress and growth of organizations and of the country.

EDGE provides the leading solution for organizations to measure, accelerate and get certified on where they stand in gender and intersectional equity and works with over 200 prestigious companies and organizations globally.

Companies with greater diversity face up to market challenges more effectively. To support companies, Valore D has developed a concrete tool, the Inclusion Impact Index®, which measures the effectiveness of a company’s diversity and inclusion policies starting from the impact in four macro-areas: governance, ability to attract, development, and retainment, so to enhance female talent over time.

The partnership with ValoreD strengthens our presence in Italy in a time where both the public institutions as well as private sector have voiced their commitment to women’s economic empowerment in the country.

“There is no progression in gender equality unless we measure”, comments Paola Mascaro, President of Valore D. “Setting clear goals and KPIs and then monitoring and tracking progress is crucial to the advancement in DE&I for both private and public sectors. As indicated by the G20 Empower – the Alliance for the Empowerment and Progression of Women’s Economic Representation – measuring to improve, building and nourishing an efficient and sustainable women talent pipeline, and enabling women to lead the future are key points to closing the workplace gender gap in the private sector. A partnership between EDGE and Valore D can provide a positive impact and the potential for acceleration in all three of these areas.”

“The partnership with ValoreD strengthens our presence in Italy in a time where both the public institutions as well as private sector have voiced their commitment to women’s economic empowerment in the country.”, says Simona Scarpaleggia, Co-CEO of EDGE Strategy.” At EDGE we are proud to support organizations by providing them with insights and concrete solutions to improve DE&I and thrive – both in terms of employee experience and business impact. Through this partnership organizations that participate in the Valore D Inclusion Impact Index® will be fast-tracked to deepen and accelerate their DE&I journey with EDGE’s robust analytical framework and independent third-party certification system.”

The importance of partnership in support of the G20 Empower initiative is clear right now: it’s time to act to reshape organizations to become truly diverse, equitable and inclusive, as well as to contribute toward a more sustainable and humanistic economy.

For further information on today’s announcement please contact our communications teams:

Press office Valore D
Paola Trotta

+39 3791551887

Ariel Mafai Giorgi

+39 3356489445

Press office EDGE
Silene Stoppa

+41 41 530 11 49

Valore D

Valore D is the first association of companies in Italy, over 270 to date, which for more than 10 years has been committed to building a professional world without discrimination, in which gender equality and the culture of inclusion support the innovation, progress and growth of organizations and of our country. Valore D supports companies by providing know-how and effective tools for a Diversity & Inclusion strategy, and offers the opportunity for inter-company dialogue thanks to the exchange of good practices and continuous dialogue between the members, Valore D is a reference point for institutions and a promoter of actions for social and economic development. of the country.

EDGE Strategy

EDGE Strategy offers an integrated SaaS-based DE&I solution allowing organizations to measure, accelerate and get certified for where they stand in terms of gender and intersectional equity. EDGE’s customer base consists of 200 large organizations in 44 countries across five continents, representing 29 different industries.

Chin Loo Low, Head of Asia Pacific Region EDGE Strategy, on the impact of ESG trends and the Covid-19 pandemic in APAC.

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Gender balance, diversity and inclusion have gained traction in APAC over the last decade. What are the driving factors?

“Diverse teams are a recognized business advantage and there is an impatience and demand for diversity from stakeholders, including employees, investors and policy makers. The question is, why then are some companies still willing to rate poorly on gender equality in the workplace?

This is where sustainability reporting and ESG trends are influential. A big corporate theme over the past decade has been ESG. In Asia, rapid growth in large developing countries like China and India have come at the cost of the environment. This is no longer acceptable. Companies are now compelled by mandatory sustainability reporting to disclose carbon emissions, labour practices and material risks arising from their businesses and supply chains.

Gender balance, diversity and inclusion put the ‘S’ in ESG and companies are starting to prioritise it more. Organizations realise now they need to assess the material risks that arise out of poor social practices and governance. Thankfully legislation is finally catching up, with progress being made in sexual harassment laws, compulsory paternity leave and quotas of women on boards, for example.”

“The pandemic has compounded the age-old problem of how women cope with the double-barrel syndrome of having to work and, in many cases, also act as primary caregivers.

Lockdowns around the globe have increased care burdens and taken women out of the workforce. The UN estimates that the pandemic could roll-back 25 years of progress in the area of gender equality. Unless something is done to address this, we face stark repercussion due to greater gender inequality, including a significant increase in risk of women dying from poverty and slower economic growth.”

How has the Covid-19 pandemic impacted this?

“The pandemic has compounded the age-old problem of how women cope with the double-barrel syndrome of having to work and, in many cases, also act as primary caregivers.

Lockdowns around the globe have increased care burdens and taken women out of the workforce. The UN estimates that the pandemic could roll-back 25 years of progress in the area of gender equality. Unless something is done to address this, we face stark repercussion due to greater gender inequality, including a significant increase in risk of women dying from poverty and slower economic growth.”

“Because APAC is so diverse and its cultures so different, companies operating in the region should adopt region-wide best practices. Companies recognising that employees are their best asset should seek the status of ‘employer of choice’. How do you demonstrate this? Through setting a framework of policies and practices that develop employees to their fullest potential, regardless of race, language, gender, sexual orientations, etc. But it needs to be structured, with metrics to track, report, analyse and benchmark workplace equality.”

APAC is a huge and hugely diverse region. Given this, how can ESG metrics help bring consistency to assessments of workplace equality?

“Because APAC is so diverse and its cultures so different, companies operating in the region should adopt region-wide best practices. Companies recognising that employees are their best asset should seek the status of ‘employer of choice’. How do you demonstrate this? Through setting a framework of policies and practices that develop employees to their fullest potential, regardless of race, language, gender, sexual orientations, etc. But it needs to be structured, with metrics to track, report, analyse and benchmark workplace equality.”

Where do you think progress needs to be made when it comes to ESG ratings?

“Environmental performance has been prioritised over the ‘S’ in ESG. This is because the risk climate change poses to business operations is more tangible and more heavily regulated. In contrast the social components of ESG – such as diversity and inclusion, health and certain workplace issues – require catch-up on the regulatory and legislation side.

Progress is being made. Let’s take a look at Singapore as an example. Only in 2014 were laws against sexual harassment introduced. New mandatory paternity benefits reflect shifting mindsets and cultural attitudes towards recognising parenting as a joint responsibility. In the corporate domain, there has been a push for more women on corporate boards. Companies are also increasingly called upon to disclose societal impact as well as environmental.

Ultimately, if we want to transform workplaces, then building in-house capacity to understand social indicators is good governance. It improves an organizations ability to interpret and use ESG data for risk management and capital allocation. And it allows this to occur as part of ‘business-as-usual’.”

Are there any stand-out ESG success stories you’d like to share?

“EDGE methodology is used by the Bloomberg Gender Equality Index, Equileap Indices and Dow Jones Sustainability Indices. These recognise companies who are taking concrete actions and I encourage you to look at the companies in Singapore that score highly in these indices.”