Category: Articles

How organizations can build trust with their stakeholder community and avoid accusations of ‘pinkwashing’.

Author: Aniela Unguresan

Founder of EDGE Strategy and Founder of the EDGE Certified Foundation

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It’s very easy for an organization to publicly state that it subscribes to best practice in its Environmental, Social and Governance (ESG) and Diversity, Equity and Inclusion (DE&I) methodologies and policies.

However, just because an organization claims to adhere to these methodologies doesn’t mean that they hold themselves accountable towards them, neither does it mean they have taken positive steps to implement meaningful change. For some, they’re just a medium with which to improve their corporate image to enhance perceptions of the organization in the eyes of investors, future talent, or society at large.

In fact, ‘greenwashing’ – once a phrase that simply related to an organization’s environmental (i.e ‘green’) credentials – has now largely become a generic term in relation to ESG, in the same way that ‘pinkwashing’ has become generic in the context of gender equity. Either way, the actions of these organizations are just a veneer toward respectability.

But regardless of the colour of the wash, organizations need to be aware that they’re being closely observed by not only investors and the market, but also by regulators who are starting to pay greater levels attention to anything labelled as delivering an ESG benefit. The conversation now needs to change and talk about removing the opportunity for ‘washing’ so that stakeholders are no longer misled about an organization and its activities, goods and services.

The only valid way to do this is to use independent verification and third-party certification to measure change so that those organizations that act with integrity reap the rewards from being ethically responsible.

Organizations need to be aware that they’re being closely observed.

Why washing happens

As to why the subject is so topical, the growth of investor interest in ESG is one of the main drivers.

Such interest reflects the view that various issues – including risk and opportunity – can affect the long-term performance of organizations and so should be given appropriate consideration in investment decisions.

But there is, presently, some inconsistency in the process. ESG ratings can vary. Scoring too can differ because of variations in how elements are measured. And bias can be exhibited. We need standardization.

Looking forward positively

Counterintuitively, instances of ‘washing’ should be looked upon with a positive twist. Not for the action of washing itself, but for the fact that organizations are starting to feel the need to comply with the demands for change even if they themselves are not yet properly engaged with the change.

This pressure for change is coming from several directions.

• First, there is an increased societal attention of ESG-related issues. Allied to this is growing momentum for corporations and financial institutions to show more of a long-term perspective while moving away from short-term views of risk and return.
• Second, society is focusing attention on climate change issues, calling for more responsible business conduct, and greater diversity in the workplace and on Boards. Society’s new values are increasingly influencing investors and consumer choice; they can no longer be ignored.
• Society which influences investors, who in turn influence corporations, is leading to more products and services being labelled as being ESG-compliant.

That’s the good news.

But there is a mismatch between the appetite and the desire for change, and the tools that determine what defines or constitutes something that carries an ESG label. This follows from an evolving process where the response to new demand – for ESG – is imperfect because organizations are rushing to respond to the market but without the appropriate processes in place.

Proper change needs the public and corporate investors to speak up; they need to demand the continual raising of the bar so that whatever is labelled as ESG becomes ever more compliant with standards.

Organizations should lead the charge

Proper change needs the public and corporate investors to speak up; they need to demand the continual raising of the bar so that whatever is labelled as ESG – be it a product, a service or an investment – becomes ever more compliant with standards that themselves become better defined, more accurate, and stringent.

Naturally, in finding a new equilibrium, organizations will find themselves disclosing ever greater levels of ESG-related information. This data needs to be categorized and assessed from a quality perspective; onlookers need to be able to distinguish a difference between the compliant and non-compliant, reliable and unreliable.

But this leads us to another set of challenges that need to be resolved.

First, how do organizations decide on the data that matters? Once this question is settled the methodology will become more transparent. Then there’s the matter of scoring – how is relevant data selected, combined, and compiled into an ultimate score that leads to a reliable ESG rating that the market can trust?

Beyond that is the challenge of ensuring that data and the subsequent scores lead to relevance and consistency in reporting frameworks. This means ensuring that the whole process is as objective and measurable as possible in line with materiality thresholds and the performance of the organization.

Lastly, any inherent biases associated with the data and process need to be eliminated so that results become universally acceptable and aligned with the public and regulators, regardless of the size of the organization.

The solution to all these problems? Independent verification and credible certification.

To avoid future ‘washing’ requires improved transparency, international consistency and comparability, alignment with materiality, and clarity on how this information can be trusted.

The goal

To avoid future ‘washing’ requires improved transparency, international consistency and comparability, alignment with materiality, and clarity on how this information can be trusted. Global standards and independent third-party certification are the answer.

Ultimately, getting this right will create robust assessment methodologies and scoring frameworks that organizations can use, which are transparent and can be objectively verified and certified and therefore trusted to be accurate.

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Author: Aniela Unguresan

Founder, EDGE Certified Foundation

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Making significant changes in society requires some form of disrupting influence as anything less achieves nothing more than playing around the edges. This applies to diversity, equity, and inclusion (DE&I) as much as it applies to other strands of life.

However, we are the product of the world we live in. DE&I is a topic that only very recently migrated from being a social and a civil rights issue to one that is a matter for business to be concerned with. And by this, I mean that it’s not just another tool with which to make more money. Instead, it should be part of an organization’s licence to participate in the business community.

Making significant changes in society requires some form of disrupting influence as anything less achieves nothing more than playing around the edges.

A layer on top

Despite this, some organizations making the shift to embracing DE&I still see it as a layer to be placed on top of their core purpose rather than being central to it. It’s almost like it is an afterthought where management seeks out diverse candidates just to meet arbitrarily set targets to justify their position and give them something to say to stakeholders and the public.

And why is this? It’s because these organizations are in a ‘reactive’ mode. They see the demographic composition of the talent pool in their countries and their sector and work with it according to the norms, rituals, and stereotypes that they hold.

Nevertheless, some are transitioning to being an active part of the new ecosystem where they see that it is their responsibility to intervene and make change. These are those organizations that now offer childcare facilities, longer paternity and maternity leave beyond what is mandatory. They are those organizations that are beginning to talk openly about challenging gender roles at work and at home. They are the ones talking about different gender identities, different ethnic backgrounds, different abilities and disabilities and they value them beyond what might be legally required or culturally expected from them.

This transition takes time with new legislation forcing disruptive change. It’s for this reason that some groups in society see more change than others – legislation cannot be ignored and this in turn focuses attention onto these groups.

But change is coming. Success is tied to who has responsibility for DE&I in the workplace along with who has operational oversight on a day-to-day basis.

Inbuilt inertia

Regardless of the positive benefits that come via change, it’s important to recognize that humans are hardwired to dislike disruption. We all hope that significant change is incremental. But it’s not; fundamental change is always disruptive. And it has to be.

We want to preserve who we are and what we have which is why we fight disruption. But important interventions only come when leaders see that change is required and act from the top. So, whether change comes from lawmakers acting in concert, investors demanding new forms of reporting, or CEOs and top business leaders seeking to alter the workplace for the better, disruption is essential.

Leaders that support the idea of change tend to align with Paul Polman’s view of the net positive effect where organizations thrive because they give more than they take. The most advanced organizations started their journey after a disrupting event, often a discrimination lawsuit against them. It was these cases that led the calls for change and forced legislators to act.

The problem is that when the first DE&I practices were set up, they were invariably designed to contain risk and manage any potential damage to the organization. They were not established with the purpose of creating value – instead, they sought to ‘do no harm’ rather than to make the world a better place. The executive with responsibility for DE&I was historically situated next to the office of the general counsel whose role is to control the risk of the company being litigated against rather than leading the charge for transformation!

But change is coming. Success is tied to who has responsibility for DE&I in the workplace along with who has operational oversight on a day-to-day basis. These leaders need to be competent and have the right skills and expertise. It’s true that the HR profession is evolving, but where responsibilities sit and how bonuses are set will determine the speed and effectiveness of change.

True meritocracies are very few and far between.There is an argument that positions should always be awarded on merit, and that we should operate on a meritocratic basis. But meritocracies don’t exist. So-called perfect recruitment and promotion processes based on meritocratic principles tend to yield the same result and privileging the historically overrepresented group.

And this is because many who end up in the positions they’re in have benefited from subtle advantages from being who they are – because of their gender, because of their skin colour, because of their socio-economic background. This is part of human nature and relates to how we connect and support those that we recognize and trust. But meritocracies can arise where companies become as diverse as the markets and clients that they serve across their pipeline, and hiring processes.

So, for change to happen companies require courageous leaders who stop for a moment to question whether they are really operating a meritocracy and why processes noted as ‘perfect’ still yield ‘imperfect’ results. This necessitates individuals being in place who proactively recognize and state that they are where they are precisely because they benefited from the support of others who are like them or who are familiar with how they work.

Culture is the result of set of behaviours and for change to happen people must behave differently.

Telling comments

It’s good that we are witnessing disruptive change. We find that after working with an organization for two years or more, historically dominant groups, mostly male, mostly white often leave comments in employee surveys that challenge or even criticize the push for gender and other forms of diversity – they feel that it’s damaging their ‘meritocratic’ principles and that their chances to be promoted are diminished. But the reality is that these comments prove to all that the existing structures of power and authority are being undermined and are in fact moving towards a new equilibrium. While it may appear counter-intuitive, comments from such employees are in fact positive signs that an organization is changing.

In such organizations it’s notable that historically overrepresented groups recognize the new competition for promotions and salary increases. But they seem happier knowing that they are working for a fair organization and are not benefiting personally at the expense of others.

Culture is the result of set of behaviours and for change to happen people must behave differently. This means that disruption is good, and changes will only ever be brought about by disruptive behaviour and disruptive thinking.

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Author: Simona Scarpaleggia

Board Member, EDGE Strategy

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Some weeks ago, I was invited to take part in a panel debate. Having been very familiar with such events, I asked what the seating arrangements would be and was told there would be high stools. Being rather petite, I didn’t much like the idea of having to clamber up onto a high seat, with my legs dangling over the edge looking for all the world like a ventriloquist’s dummy – without the ventriloquist!

A conversation to that end took place, and the organizers replaced the stools with comfortable armchairs, and everything went off smoothly.

In this example, the decision to choose high stools was probably taken by an individual who didn’t think about the implications and most probably unconsciously expected panelists to be men and therefore of a certain height. It is unlikely that they considered that women are on average much shorter than men, or that a man or woman from Mexico or Vietnam is typically much shorter than someone from the US or Western Europe. I doubt they also considered what people wear, and that a high stool might not therefore be appropriate for a woman in a skirt. And I very much doubt they considered whether any of the panelists had mobility issues.

The point of telling you this story is that it is an example of unconscious bias, and the influence unconscious bias has on our attitudes and behaviours, especially to other people. It can influence key decisions in the workplace and can contribute to inequality, especially in terms of recruitment, appraisals, or promotion.

Pilot’s progress

Unconscious bias is nothing new. Back in the 1940s in the UK, newly-built aircraft were ferried from the factories to their front-line squadrons by pilots of the Air Transport Auxiliary, many of whom were women. There is a famous story of one enormous four-engined aircraft landing at an airfield and a party of men gathering to greet the pilot. When a very petite young woman clambered out the back, the men remained standing, refusing to believe that she could have flown such a mighty aircraft, or indeed any aircraft for that matter. Only after some time, and when no-one else emerged, did they finally believe she must have been at the controls.

In more recent times, a woman in the US recounts of her experience parking in a ‘Veterans and Military’ parking spot, getting out of her car, and a man confronting her and shouting: ‘That spot is for vets, ya know!’. ‘I know.’ She replied. ‘It’s nice to be appreciated! Women have been serving for decades!’

Unconscious bias manifests itself in other ways that impact our daily lives. A study by two Dutch scientists at Maastricht University in 2015, for example, found that most offices set their thermostats based on the resting metabolic rate of a 40-year-old man. This is in accordance with standard indoor air conditioning guidelines which date back to the 1960s and which have never been updated. Because women tend to be smaller and have more body fat than men, however, they have slower metabolic rates. Which means the current air conditioning standards are too cold for most women.

Categories of bias

To be clear, unconscious bias is not limited to gender. It also impacts ethnicity and other visible diversity characteristics such as height, body weight and even names. It is triggered by our brains unconsciously making quick judgments and assessments that are influenced by our background and personal experiences, as well as our concept of societal stereotypes.

Typically, bias falls into different categories as such “affinity bias” (this is a bias towards people we like and immediately identify with, and often manifests itself when recruiting and favouring a candidate that we see as the right ‘fit’ when actually we should value diversity and consider what the individual will bring to the team) and “confirmation bias” (having perhaps decided to recruit an individual in our own image, we then seek to confirm we have made the right choice by looking for information that confirms our thinking and ignoring information that doesn’t quite fit the narrative we have formed. This can of course lead to challenges later down the line if we choose to overlook an issue that subsequently becomes a problem.

To know more about different type of bias you can consult our Glossary.

Eliminating the bias by ‘un-biasing’ the processes

So in management, how can you address the issue of unconscious bias, and help yourself to make the right decisions for your colleagues, your business and yourself?

The key point is one of honesty and being honest with yourself, which is not always easy. We will all know of examples over the years where we may have had favourites or championed one individual over another. To address unconscious bias, it is essential to recognise and understand what biases you may have, because of your experience, your gender, your sexual orientation, and your own social background. Discussing the issue in an honest and open forum and raising the awareness of unconscious bias is the best way of starting to mitigate against it.

This will certainly help from a personal point of view, but it won’t mean that bias will disappear. Indeed quite the opposite. Leaving the issue of bias to a myriad of individual considerations and preferences serves to fuel the subjectivity of decision-making, and in no way contributes to a structured process. The best way for this to be achieved, and create a more effective, sustainable solution, is to ‘un-bias’ the process.

This means that when hiring, promoting, assigning projects, or organizing the seating at a conference, an organization needs to have a proper process that is designed to be neutral, and takes into account how we all differ.

Let me give you some examples:

• Use gender neutral language for job advertisements and for other communication: by doing this, you will attract more candidates/encourage wider engagement.
• Make the application processes transparent. Remember that potential candidates also have their own bias and by having a clearer picture of the process they will realise they will not be excluded ‘by default’ – because of some aspect of diversity they embody – in the way that they thought.
• Require a gender balanced shortlist of candidates for hiring and for promotion: this will help safeguard meritocracy and will secure equity.
• Promote in groups: promoting in batches as opposed to announcing promotions on a one-by-one basis will make the gender balance more visible. It will make leaders more aware of the decisions they are taking and increase trust among the employees.
• Pay for performance, not for ‘face time’ presence: the pandemic has shown the latter was heavily overestimated and performance can be measured more objectively through relevant quantitative KPIs and qualitative parameters, rather than simply being ‘seen’ to be working.
• Show more diverse role models: it is a very powerful way to encourage everyone to lean in and to aspire to an interesting career in their organization.

The list could continue: there is so much that can be done that will help an organization in creating a more equitable workplace and a more effective one too.

Being alive to unconscious bias will open a new world of opportunity to you and your business. It is not simply about ensuring you lay out the right furniture the next time you’re hosting a conference or panel debate, but rather ensuring you enrich your organization with a more diverse team, with all of the benefits that brings.

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Author: Simona Scarpaleggia

Board Member, EDGE Strategy

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Leaders need to consider the three ‘D’s’ in adapting to the workplace of the future: Digitalization; De-structuring; and perhaps the most important of all, Diversity.

Digitalization and globalization were already changing the world of work when the pandemic struck and accelerated the rate of transformation. People’s personal and working lives pivoted as organizations digitalized their operations. Disruptive technologies, including artificial intelligence (AI), the Internet of Things (IoT), and nanotechnology, are having a massive impact and will continue to do so at pace.

There are plenty of examples that serve to illustrate the point. Industrial robots are now commonplace in replacing routine manufacturing tasks. Cyber courts with AI-enabled judges are reducing the time spent on cases by up to 60%, while cognitive agents such as Amelia provide services such as tech support, customer care, and procurement processing.

Historically technological revolutions deliver significant economic growth and new employment opportunities. But they also bring the upheaval of social and demographic change and greater labour mobility. The future of work will look very different. Every company must decide how best to embrace the future and remain competitive and attractive in the new digital world. They need to choose between allowing machines to lead the development of their human workforce or using machines to leverage and enhance people’s skills and talent.

3D transformation

It is possible to plan for the transformation that is happening by considering the three ‘D’s’: Digitalization; De-structuring; and Diversity – and examining where the three elements intertwine. Let us take each ‘D’ in turn.

3D transformation: Digitalization

Digital transformation is symbolized by the mobile phone. It is more powerful today than all the NASA computers that helped to land a man on the moon. As digitalization rapidly becomes integrated into companies’ business models, processes and working methods, it will bring endless opportunities. But it is not all good news. Data security, automation of human jobs, loss of personal privacy, long-term security and personal fulfilment are just some of the emerging threats. The momentous changes to come urgently need channelling towards a positive outcome.

Before the pandemic, companies were cautiously testing remote working technology, assessing the benefits, costs, and risks. With the pandemic and lockdowns, remote homeworking became the new normal within a few days. The technology was easy to install and easy to use. But the impact on leadership and human psychology was grossly underestimated. Leaders had to develop greater empathy, learn to listen, understand more and foster trust through a computer screen.

Similarly, e-commerce retail and supply chains were rapidly transformed. One of the last things I witnessed at IKEA was the installation of external locker spaces for customers to collect their online purchases during the pandemic. It led to inner-city stores being opened for the first time in the company’s history.

Retail will always be there. Not all retailers will. Innovators who blend humans and machines to make shopping easy and create a relationship with the customer will flourish. But whether launching products, delivering to customers, or creating fun, educational and in-store experiences to attract footfall, the key is innovating and implementing at speed.

3D transformation: D-structured

To become more agile, companies need to de-structure and remove old pyramid hierarchies and traditional conventions which are no longer suited to a rapidly changing workplace. As Einstein said, “We cannot solve our problems with the same thinking we used when we created them.”

To respond quickly to continuous change requires creativity and autonomy. Stockpiling resources, people, materials and information stifles flexibility. Using what is needed, when it’s needed most, is what’s required. Task forces, or departments, will no longer be rigidly bound. People and ideas will ebb and flow more easily across organizations, with teams forming and reforming where and when they are needed. Start-ups, tech companies, and entertainment (media) companies are already leading the change.

3D transformation: Diversity

Connected by digital technology, teams are increasingly global, potentially creating more diverse workforces. Diversity is a kaleidoscope of differences in people’s values, competencies, and perspectives from all walks of life. Together they make a cognitively diverse workforce of talent and solution finders.

The pandemic offered us new and more positive horizons for humanity, economically, socially and politically. It has given us a chance to reset the workplace agenda and strive for global prosperity. Gender equality is central to that change. Among men and women alone, multiple dimensions of age, race, sexual orientation, disability status, educational background, and more, ‘intersect’. If organizations can identify that level of diversity and ‘intersectionality’, they can learn how to build more progressive work environments with equal opportunities for all, wherever they are in the world. It will have a broad and remarkable impact in many fields.

As technology evolves, leaders can choose to simply cast people aside who do not have the digital skills. It’s happened with previous technological changes. But this will merely postpone and amplify the shortage of tech-enabled employees. Instead, leaders should choose to help men and women upskill or reskill.

In a world concerned with any organization’s social impact, today’s leaders are morally obliged to consider how job losses or organizational change will affect their employees, their families and society as a whole. Some companies are already taking positive action.

Bosch is spending €2bn on reskilling workers from legacy to new car technologies, while staff in non-auto departments can learn AI or software skills. Unilever’s ‘future-fit’ programme allows any employee to develop a retraining programme and use Unilever’s skills platform for a new career of their choice. Other companies teach new agile ways of working. Such initiatives help create a skilled, more diverse, transformed workforce which is resilient to constant change.

Measuring that transformation is vital to identify gaps, promote investment and follow up on results. Companies are increasingly measuring and reporting on their environmental, social and governance (ESG) KPIs. Mercer reported that 81% of companies claim to measure and improve DE&I, and 50% have formal DE&I targets. But only 36% include gender as a measure of the employees they hire or who leave as part of their KPIs. Most companies need a deeper analysis to create a workforce suited for the future of work.

Creating Purposeful transformation

Companies can choose their response to the digital transformation of work. Those choices will be seen by consumers, impacting the company’s reputation and its commercial value for better or worse. But if they wish to thrive, leaders will need to think beyond just business benefits. They will need to align the cultural transformation to their purpose because adapting to the complexities of cultural and psychological change is more challenging than adapting to new technology.

Psychologically people need to lead meaningful lives through having purpose, values and building relationships with others. People want to work for companies they believe in. They want to understand the contribution they make and how it benefits someone or something larger than themselves.

People believe in a company if they share its values, believe in its mission, and see evidence in the organization’s behaviour. Today’s markets are defined by societal needs, not just business needs, so this is now the work of leaders. And they need to recognize that waiting and planning often cost more than doing and improvising in a constantly changing workplace. Speed and simplicity will deliver change.

In purposeful transformations, there are three imperatives:

1. Transforming business processes is a must
   But vigilance is needed in the rush to automate processes and deliver greater efficiency. The functions that should and should never be replaced by robotic technology must be chosen carefully. People may make mistakes, which can lead to creativity or elements of uniqueness. Automate to replace mundane tasks and create jobs employees value.
2. Putting people first means a holistic approach to developing co-workers
   Companies can proactively identify employees’ potential and their current skill sets and understand and support people’s ability to unlearn and relearn for the future. The workforce will become more resilient, and so too will the company and society.
3. Living and breathing the new way of work.
   A new digitally connected world of work will require a new kind of working culture, an inclusive, innovative, generous, and courageous working culture. Break down internal silos and create small, diverse interdisciplinary teams with the autonomy and agility to innovate on projects and the freedom to move into new roles.

Leaders should be aware of their roles and responsibilities toward every member of the organization. Their behaviour should show they take their responsibility to heart. And with a commitment to inclusion and gender equality, what will emerge is a whole new culture in which people will work effectively alongside machines. This is transformational leadership.

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Ringier and RASCH have received EDGE Assess & EDGEplus certification for the first time. The certification measures and evaluates companies in various areas, including recruitment, flexible working models, parental leave, and management’s strategic prioritization of gender issues.

How did the business case for gender balance DE&I evolved over the last 18 months?

Susanne Jud, Chief People Officer Ringier AG:

Both Ringier and Ringier Axel Springer Switzerland are convinced that diversity and inclusion are core values and success factors for any company. Thus, Ringier and Ringier Axel Springer Switzerland took this topic a step further by setting up a Diversity & Inclusion Board in 2020. Four out of seven members of the Group Executive Board are part of it which underlines the importance given to the topic.

We believe that diversity and a respectful company culture are the key drivers of creative and engaged collaboration. Our ability to deliver excellent results is based on the diversity of our ideas – and therefore also our employees. The Diversity & Inclusion Board’s key tasks are to set priorities for diversity and inclusion within the company, measure progress and report on this regularly. The overarching aim is to make diversity and inclusion an integral part of the corporate culture and of daily life at Ringier.

The first step was to sensitize employees to the issue, generate visibility and set an example of DE&I. One premise here was that employees should be involved in the process. We held several workshops with our employees to get their input, their point of view and suggestions. Recently several working groups consisting of employees  have been established. Currently they are covering topics such as gender, age, LGBTQIA+ and origin/culture.  What we consider to be particularly important is awareness of the unconscious bias we all have, which is why we launched unconscious bias training. Besides this we also changed our job advertisements to be more inclusive and to attract the best talents.

Malta Fazzari, Head HR Ringier Axel Springer Schweiz AG:

Since we work very closely together on DE&I  topics and the Diversity & Inclusion Board is a joint body, I can emphasize that it is very important that DE&I is not treated as an HR issue only. For resounding success, the topic must be lived and driven forward at all levels. Luckily we see that DE&I is a concern that is relevant to our employees and with our approach we ensure that it is supported and that we can all develop further together.

EDGE Certification brings visibility and credibility to the change happening inside the organization. At the same time, it creates the premises for diverse talent to thrive at work. Tell us some stories about how your employees benefit from the EDGE Certification journey of your organization.

Malta Fazzari, Head HR Ringier Axel Springer Schweiz AG:

We consider DE&I as a central topic.  EDGE provides us with its external and objective view and is helpful on how to approach topics where we have room for further development. We want to make sure we do not have blind spots. As part of the EDGE certification, we have committed ourselves to taking a closer look at the fields of equal pay, unconscious bias and personal integrity and to elaborate on them . In doing so, we create even more transparency and a more  inclusive environment that is free of judgment and prejudice and that all employees feel comfortable in.

We are convinced that the EDGE certification has brought us further and that it encourages and supports us in our commitment to continue working on these topics. After all, we want to continue to improve.

What do you think workplace gender balance, diversity and inclusion mean to the next generation ?

Susanne Jud, Chief People Officer Ringier AG:

Regardless of which generation we’re talking about, I think it is important that people are at focus with their talents & strengths (not their gender, origin etc.)  and that we talk about work-life-inclusion which goes beyond families.

Malta Fazzari, Head HR Ringier Axel Springer Schweiz AG:

We observe that the next generation expects equal opportunities for all – regardless of external criteria and we’re working hard to meet that goal. To achieve this we have to offer flexibility and provide  flexible working models. We experience in our everyday work how this is demanded and even lived naturally.

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Every organization is unique, and each is, or should be, on a journey towards gender balance, diversity and inclusion.

The problem for those looking to improve their standing in this area is that there are just so many variables. Different starting points, different national specificities in terms of policies and cultures, and different opportunities for industries when it comes to the available talent pool are just some of the hurdles to overcome. And this can either help or hinder an organization in its efforts to implement gender balance diversity inclusion.

But despite these differences, there are three fundamental characteristics required to successfully implement change and they apply regardless of the maturity of an organization, its location, and the industry it operates in.

Simply stated, they are that a programme needs to be intentional, prioritised, and must be measured.

Intentional change

Looking at the first, it’s clear that in fostering gender diversity and inclusion today, workplaces still need to evolve even though they look completely different compared to those of 20 years ago. The pace of change is not as fast as many would like, and it’s easy to be lured into thinking that change happens naturally and there is never any need for intervention because change always happens regardless.

However, there is nothing natural about changing the distribution of power and authority within an organization between a historically overrepresented group and that which is historically underrepresented. While we’re talking here about gender it applies equally to race and ethnicity, sexual orientation, or gender identity. In fact, inequity can relate to anything which makes one group historically overrepresented in an organization and another underrepresented.

Because change does not happen naturally there needs to be a very clear intention to implement change based on a well-defined view of why we are making it.

We need to understand why we want to redistribute power authority, why we want to have broader representation, and why we want to have gender balance diversity inclusion.

In other words, behind the intention to change there must be an understanding of why we are acting. This means considering the gender equity and overall DE&I benefits to the organization, employees, men – the historically overrepresented group, and similarly, women, the historically underrepresented group.

Prioritised change

The second characteristic is a need for changed-related actions to be prioritised.

Organizations are fascinating. They are in a constant state of flux as priorities shift, leadership changes, and requirements change. There is much that happens in the life of an organization and its energy and attention can become polarised towards something that feels more urgent precisely because it is more immediate.

This is why it is important for gender balance diversity inclusion programmes to be considered as strategic and vital for the organization in achieving its mission. And when a programme is prioritised three things that happen as a result. The first is that the programmes gain the support of the top leadership team. Next, it gains the allocation of necessary resources. And thirdly, accountability for results becomes entrenched.

Measured change

And it’s this accountability for results that demands the third characteristic – measurement.

So, when we talk about accountability, which is key for progress, we need to be able to measure what has changed. This is why actions need to be intentional, prioritised, and have a very clear set of quantitative and qualitative measurements that allow an organization to understand what works, and why. We need to be able to reproduce actions and behaviours that lead to positive results. Likewise, by measuring change we can understand what does not work, and why, so that we can fine tune actions or discontinue them.

Following the EDGE methodology establishes a framework of measurement that looks at diversity-related indicators such as representation, talent in the pipeline, and where men and women are in relation to the jobs and functions that they occupy.

Once this is complete, we can consider equity related indicators around, for example, equal pay for equivalent work. But we also need to consider the effectiveness of policies and practices with the aim of constructing an organizational infrastructure which creates equitable career flows.

From here we are able to examine the all-important indicators that are linked to inclusion. By this we mean diversity-related indicators and representation, equity-related indicators and equity of pay, and equitable career flows supported by the organizational framework. Once these are in place, it is possible to then scrutinise inclusion-related indicators such as how employees feel about career development opportunities.

This robust framework of measurement – which is holistic and looks at both quantitative and qualitative indicators as well as processes and outcome – forms the backbone of a process that will sustainably support attention, focus, and energy on those actions which are, by definition, both intentional and prioritised.

Avoiding mediocrity

EDGE has established a global standard which drives organizations to not be introspective. While it’s a natural tendency for organizations to compare themselves with their peers within their own business sector or country, this might not be the right standard to use as a gauge, especially if it’s referring to the median of a very average performing group. It’s for this reason that global standards and independent third-party verification are valuable and powerful instruments of change.

Ultimately, no organization should adopt mediocre business practices just to fall in line with mediocrity in their industry. On the contrary, when it comes to the lifeblood of an organization it should want to be the best.

And this is exactly what EDGE seeks to do in diversity equity and inclusion. With a standard that highlights what are good employee representation, pay equity, effective DE&I policies and practices the appearance of what an inclusive culture looks like will become apparent.

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EDGE Strategy, a global leader in Diversity, Equity & Inclusion (DE&I) measurement, management and certification, has announced a new four-year partnership with the St Gallen Symposium to promote the benefits of cross-generational dialogue and support generational fairness in the workplace of the future.

The St Gallen Symposium was created more than 50 years ago with a vision to lead with the next generation in mind, and a mission that by creating cross-generational dialogue organizations benefit from enhanced decision making. EDGE Strategy similarly has a vision and a mission that a more inclusive, equitable, and prosperous society can be achieved by gender and intersectional equity in the workplace.

In becoming a St Gallen Symposium partner, EDGE Strategy will contribute at a senior level to promoting why diversity matters within an organization and what actions organizations can take to leverage the unique potential of cross-generational teams, and how best to measure the outcomes.

EDGE Strategy will have a voice in promoting gender and intersectional equity to the global CEOs and world leaders who attend a series of events, not only through the symposium but also through the Global Leadership Challenge (GLC). The GLC is a joint initiative between the St Gallen Symposium and the University of Oxford to empower the next generation of leaders through a responsible leadership framework.

As a Challenge partner, EDGE Strategy will work specifically with the University and others on its thematic focus on Sustainability Development Goal (SDG) 5 – Gender Equity, and other dimensions of intersectionality harnessing the vast experience of its senior team to help mentor and support emerging young leaders from around the world – people under 30 motivated to use their careers for greater gender equity and inclusion.

We know from the organizations we work with that there is an unprecedented span of generations working in today’s workforce. People are living and working for longer which means that organizations can have up to five generations with completely different life experiences, beliefs and traits co-existing in the workplace. A huge opportunity, if managed wisely and proactively.

Simona Scarpaleggia, a Board Member of EDGE Strategy, says the new partnership will help advance the real-world benefits of gender equity, but more specifically intersectional equity when it comes to cross-generational leadership:“We know from the organizations we work with that there is an unprecedented span of generations working in today’s workforce. People are living and working for longer which means that organizations can have up to five generations with completely different life experiences, beliefs and traits co-existing in the workplace. A huge opportunity, if managed wisely and proactively.” she says.

By championing diversity with a cross-generational mindset, we can enrich the experience not only for the organization but also for the individual concerned.

“By championing diversity with a cross-generational mindset, we can enrich the experience not only for the organization but also for the individual concerned.”

The new four-year partnership was formally announced at the 51^st St Gallen Symposium on 6 May 2022.

About – the St Gallen Symposium

The St. Gallen Symposium is the world’s leading initiatives for cross-generational dialogue on economic, political and social themes and developments. For 50 years, established leaders and visionaries have been brought together with extraordinary young talents in St. Gallen and at global locations, as well as in digital formats. Together, they address the chances and challenges of our time and work on finding solutions. The St. Gallen Symposium is a student initiative. Under the strategic guidance of the St. Gallen Foundation for International Studies, the International ‘Students’ Committee – a team comprised of about 30 students from the University of St.Gallen (HSG) – organises internationally important events to promote dialogue between the generations. During the symposium, 500 HSG students are supporting. Past formats of the St. Gallen Symposium have been enriched by the participation of figures like Christine Lagarde (European Central Bank), Christian Mumenthaler (Swiss Re), Jack Ma (Alibaba Group), Prof. Niall Ferguson (Stanford University), Kersti Kaljulaid (President of Estonia), Sigmar Gabriel (former German Vice-Chancellor) or Anders Fogh Rasmussen (NATO), as well as at least one Federal Councillor every year.

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The financial services industry still has a long way to go to reach gender parity, and OMFIF’s Gender Balance Index 2022 revealed a consensus that the industry is heading in the right direction, but needs to move faster.

• 15% of Central Banks have no women in senior management or Board positions
• 11% of Central Banks are run by women
• 27% of Central Bank deputy governors are women
• Proportion of women on executive committees with P&L/revenue-generating roles is newly tracked this year
  • within Central Banks, 66% of women on Executive Committees have P&L responsibility compared to 84% of men
  • The numbers are even lower for Sovereign funds and pension funds

The Official Monetary and Financial Institutions Forum’s (OMFIF) ninth edition of the Gender Balance Index (GBI), the think tank and EDGE brought together a panel of prominent guests from across the financial services industry to discuss the current gender balance, and the presence of men and women in senior positions at Central Banks, Commercial Banks, Sovereign Funds and Public Pension Funds.

EDGE Certified Foundation Founder, Aniela Unguresan, took part in the virtual event on 28 April 2022 alongside representatives from a number of institutions which participated in the GBI IMF, World Bank, and IFC, Banco de Mexico, and the European Central Bank. Representatives were able to share their views on how measurement, transparency and accountability, through an independent certification, is supporting their commitments to reaching gender parity.

In overview, the GBI report evaluates institutions based on gender balance among senior staff in the most decision-making bodies within the institution, assigning men and women in these positions a weighted score based on their level of seniority (the highest possible score is 100, which represents gender balance). GBI tracks 6,000 people across 335 institutions, including 185 Central Banks, 50 Sovereign Funds, 50 Pension Funds, and 50 Commercial Banks.

According to the index, there has been an increase in the number of women at the top level of financial institutions over the last five years, with pension funds being the highest scoring institution category and sovereign funds being the lowest. The numbers from 2022’s report suggest a steady but slow growth, with only 13% receiving a score of 70 or higher; 20% with a score of less than 10; and 10% (or 34 institutions) with a score of 0 as they have no women at all on their executive teams or boards!

Only 14 percent of financial institutions are led by women – this includes 21 Central Banks, 13 Public Pension Funds, 5 Sovereign Funds, and 7 Commercial Banks, with Commercial Banks being the most improved category since the previous year. Aside from that, women make up 23% of Deputy Governor and C-level positions, and 29% of the Executive Committee and Board.

We are heading in the right direction, but we are not moving fast enough.

Aniela Unguresan Founder of the EDGE Certified Foundation believes that while the numbers are not the best we could have hoped for, a shift has begun which now needs acceleration towards further progress: “We are heading in the right direction, but we are not moving fast enough,” she said.

Moreover, this movement in the right direction might give us the false sense that things will naturally evolve in and of themselves and in some decades from now we will have substantially improved scores. We simply cannot wait that long.

“Moreover, this movement in the right direction might give us the false sense that things will naturally evolve in and of themselves and in some decades from now we will have substantially improved scores. We simply cannot wait that long.”

We do see increased transparency when it comes to the number. So we have more data, and better data on those indicators that matter.

At the same time, Aniela is encouraged by the increasing transparency given in order to rank organizations: “We do see increased transparency when it comes to the number. So we have more data, and better data on those indicators that matter.”

I’m coming as a first American to the European Central Bank and I’m observing a very intentional approach to gathering information, putting policies in place, establishing targets for gender balance.

The importance of having and analysing data was further stressed by Elizabeth McCaul, Member of European Central Bank’s Supervisory Board (which is certified at EDGE Move level), who said: “I’m coming as a first American to the European Central Bank and I’m observing a very intentional approach to gathering information, putting policies in place, establishing targets for gender balance.”

The European Central Bank was ranked 25 (out of 159 central banks) in the GBI 2022 (an improvement of 66 places) and scored 71 points (compared to 41 in 2021).

It is a wonderful milestone to have reached the second level of Certification. We are also very focused right now on ensuring equity for all our colleagues, which is an important part of the internal dialogue.

Sharmila Hardi, Global Head of Banking for IFC (a member of the World Bank Group), shared that IFC has made significant strides toward gender equity this year and became EDGE Move certified: “It is a wonderful milestone to have reached the second level of Certification. We are also very focused right now on ensuring equity for all our colleagues, which is an important part of the internal dialogue.”

We are certified with EDGE Move, which has been very close to us in the work we are doing. I believe that such commitments necessitate ongoing effort and force us to establish concrete goals and objectives. I think we are on the right track.

Similarly, Irene Espinosa, Deputy Governor Banco de México and the first female on the Board of Governors shared: “We are certified with EDGE Move, which has been very close to us in the work we are doing. I believe that such commitments necessitate ongoing effort and force us to establish concrete goals and objectives. I think we are on the right track.”

And the GBI 2022 results show that Banco de Mexico is indeed on the fast track as it jumped 84 places to rank 32 in the central bank ranking.

What would it take for all the institutions included in the GBI to set targets for general composition throughout the pipeline in order to achieve balance over the next three years? What would it take to commit to close the gender pay gap over the same time horizon? The answer is rather straightforward: objective measurement, transparency on current status and accountability for results.

Looking forward, we need to be more ambitious in what is expected from ourselves and from our organizations if these numbers are to increase over time. “What would it take for all the institutions included in the GBI to set targets for general composition throughout the pipeline in order to achieve balance over the next three years? What would it take to commit to close the gender pay gap over the same time horizon? The answer is rather straightforward: objective measurement, transparency on current status and accountability for results.”, says Aniela.

The takeout from this year’s Gender Balance Index is that speed, focus on bold actions and significant outcomes in terms of workplace diversity, equity and inclusion should be high on the agenda of every leader in the financial services industry. The sustainability of industry’s business success will depend on it.