Accountability mechanisms for inclusion and wellbeing

Peer accountability is a powerful force for change – industries move farther when they move together. By collecting data, setting and tracking progress toward goals, and disclosing diversity representation data, companies not only send a clear signal about their own commitment to diversity, equity, inclusion (DEI) and worker wellbeing, they also raise the bar for other companies. Data disclosure also helps other stakeholders, from investors and regulators to customers and employees, factor a company’s DEI and worker wellbeing performance into their decision-making.

But 68% of Russell 1000 companies in the U.S. do not disclose any data on the diversity of their workforce. Similarly, in Europe, according to a PwC report, only half of companies are capturing basic demographic data about their employees.

While the collection and disclosure of diversity representation data is a fundamental step in driving up standards, it needs to be as simple as possible so that capacity does not become a barrier to participation. Currently, most publicly listed companies fail to report any diversity data at all. Consolidating standards, de-duplicating reporting and creating common data platforms will accelerate progress.

New initiatives are expanding reporting on worker wellbeing and DEI. Nonetheless, regulation on DEI lacks the detailed reporting expectations that are emerging on, for example, climate risk. The EU Non-Financial Reporting Directive and SEC’s human capital disclosure requirements are largely principles- and policy-focused, and do not offer guidance on metrics comparable to that available for carbon disclosure.

Efforts to move towards a consolidated set of reporting standards are underway in the wider ESG space. The International Financial Reporting Standards (IFRS) Foundation plans to create a single global reporting standard on ESG. Global Reporting Initiative, CDP, the Climate Disclosure Standards Board (CDSB), the International Integrated Reporting Council (IIRC) and SASB have pledged to work together to streamline reporting standards. Similar standardization in the DEI and worker wellbeing spaces would make it easier for more companies to make representation data available, and for stakeholders to utilize it.

Within your own organization:

• Track and break down human resources data on hiring, job seniority, pay, promotion, parental leave, sick leave and turnover as well as qualitative engagement indicators on wellbeing by a set of diversity parameters relevant to your location.
• Set and publicly communicate clear policies, adopted standards and initiatives for worker diversity, equity and inclusion as well as worker wellbeing.
• Disclose diversity representation data publicly on a regular basis.
• Build trust with employees to improve data collection.

With others:

• Work with standards bodies and reporting frameworks such as the Global Reporting Initiative and the Workforce Disclosure Initiative to promote interoperable data and reporting platforms.
• Work across industry and through industry associations to support adoption of standards on worker wellbeing and diversity, equity and inclusion.
• Support campaigns to provide a regulatory requirement for data disclosure on diversity, equity and inclusion and worker wellbeing.
• Support consolidation of standards offered by organizations promoting more inclusive and equitable workforces.
• Promote the development of a publicly available data pool on worker wellbeing and diversity equity and inclusion standards.