Progress Check: Are Companies Fulfilling Their DEI Promises?
Welcome to my weekly Q&A roundup. (Scroll down to find the Q&A.)
If this is your first time here, welcome. I spend a fair amount of time speaking at events and conferences. At the end of my presentations, I leave space for audience members to ask questions — tough questions, brave questions, you name it. The level of candor and curiosity always inspires me, and I want to share that sentiment with you. So each week, I pick one question that I believe others would find most instructive and publish my response to it here.
The purpose of this weekly tradition is transparency and inclusivity.
- Transparency: a behind-the-scenes look at my day-to-day.
- Inclusivity: bringing others along in the journey.
The DEI Pledge-to-Progress Gap
What’s the status of companies that recently pledged support for diversity, equality, and inclusion? Are they making progress?
Yes, albeit slowly, companies are making progress toward their pledges. Before we dissect how progress toward DEI has materialized over the past year, I want you to keep in mind the voluntary structure of most diversity disclosures. In the US, no federalized system exists to hold companies accountable for their intersectional human capital equity data. Not yet, at least.
Because they are voluntary, the diversity disclosures we currently have access to do not represent the entire corporate landscape.
We can infer, however, that non-disclosure might represent an unwillingness to collect and release human capital data, especially since a growing chorus of stakeholders are calling on companies to increase DEI transparency.
DEI Pledge + Disclosure Data From ‘Just Capital’
Let’s start by looking at data from Just Capital, which last year created a COVID-19 Corporate Response Tracker to collect metrics on how 301 of the US’s largest companies were responding to the pandemic.
- Of the 301 companies tracked, 199 made a public statement in support of Black Lives Matter.
- Of those 199 companies who say they stand with Black Lives Matter, 47% have yet to disclose any data on the racial/ethnic makeup of their workforce.
- Only 9% have released detailed information on their workforce by gender, race/ethnicity, and occupational category.
DEI Pledge + Disclosure Data From the ‘Workforce Disclosure Initiative’
Another report, this one published by the Workforce Disclosure Initiative (WDI), found a similar tepid disclosure atmosphere among the world’s largest companies.
The WDI, which represents 53 investors with $7 trillion in assets under management, gathered data on the world’s largest companies across 19 countries and from all 11 economic sectors. Collectively, these companies employ over 12 million people in their core daily operations.
Here’s what the 2020 WDI report found:
- The number of companies submitting data increased by 20% year over year: 141 companies in 2020 versus 118 companies in 2019.
- The amount of data submitted by companies also increased year over year. In 2020, companies submitted 61% of requested data, whereas in 2019 they submitted only 40%.
- Nearly all companies (98%) pledged to improve their workforce diversity, but only 75% disclosed the gender breakdown of their employee base and only 36% disclosed the racial/ethnic breakdown of their employee base.
- 57% of companies provided gender pay equity data and only 4% provided racial/ethnic pay equity data.
- Nearly all companies (96%) stated their policies on discrimination and harassment, but only 41% disclosed the number of discrimination and harassment cases reported in their workplaces.
What We Can Learn From These Reports
In regards to your question, these reports* tell us two things:
- The number of companies disclosing their diversity data is increasing. (Good)
- The gap between signing a DEI pledge and disclosing DEI data still exists. (Room for improvement)
Going forward, we need more companies to disclose their intersectional human capital data. Why? Because data transparency and accountability are key to closing the intersectional gender equity gap.
Until we have this data, DEI will continue to be an elusive (yet aspirational) shot in the dark.
* We would still need to dig deeper into individual diversity reports to get a better sense of, say, how Company X’s leadership team is becoming more equitable. Or how Company Y’s pay gaps are shrinking. That’s a task for another day.