Sustainable business goes nowhere without diversity, equity and inclusion.
While the scope of sustainability in business has broadened beyond environmental footprint—to include social responsibility and human rights, for example—the scope of diversity, equity, and inclusion (DEI) has also broadened. And these scopes have begun to overlap in certain areas.
As part of corporate responsibility, companies are looking outward at how they affect the communities they serve and what they contribute to society. They are also looking inward at their values and purpose, and how they engage and treat their employees. Robust DEI work shares these concerns. It’s no longer limited to hiring diverse talent.
Companies benefit when they embed sustainability and DEI principles into their business.
In the coming years, companies will increasingly be judged based on environmental, social, and governance (ESG) criteria, which are tied to diversity, equity, and inclusion, says Darlene King, executive director of the Michigan Diversity Council. Companies will be judged on their environmental performance, what they are doing from a social and racial justice perspective, and how they are addressing equitable opportunities for people who are underrepresented in our society, for example, she says. All these things are connected.
Like sustainability, diversity is good for business. Research has shown repeatedly that a more diverse workplace fosters greater innovation and productivity. A 2020 McKinsey report found that companies with more gender and ethnic diversity on their executive teams were more profitable than those with less diverse teams. A 2018 BCG study found a strong correlation between the diversity of management teams and overall innovation.
It makes sense: People who come at a problem from different backgrounds and experiences are more likely to come up with various ways to solve it. A homogenous group might be drawing from a narrower set of experience and skills.
And diversity is not just race and gender. “It’s not just what you can see,” says Jocelyn Giangrande, a Bloomfield-based diversity and inclusion consultant. Along with race, gender, and sexual orientation, diversity also includes people’s family situation, culture, level of ability, religion, veteran status, learning style, and communication style, for example.
There’s been a shift away from the idea that when you show up at work, you leave your personal life behind. “More people are bringing their full self to work,” Giangrande says. “Smaller organizations should make sure they’re leveraging the diversity they have.”
One way to do that is to create ways for people to get to know each other below the surface, Giangrade says. Often, “what we know about someone is the tip of the iceberg.” You can use ice-breaking activities that pair up people who don’t know each other well and ask them to talk about their favorite food, for example, she says. It seems simple, but it can shed light on who the person is.
Once companies recognize and embrace diversity, they can move toward inclusion—building an inclusive environment that makes people feel seen and heard. This means making sure people “have a sense of belonging, and they are valued, and their voices are heard, and their contributions are received,” King says.
“Inclusion is where the magic happens, inclusion is where the growth happens, and inclusion is where the expansion happens,” King says. But you have to understand the dimensions of diversity—such as race and gender—before you get there, she says.
Like meaningful sustainability work, meaningful DEI work isn’t just checking boxes and moving on. It often requires deeper reflection and more holistic approaches. This might happen as companies redefine or reaffirm their values and purpose. What does the business stand for, and how does it affect communities?
Baby Boomers, who are retiring now, and Gen Xers, who will be retiring in the next 10 to 15 years, have different values from Millennials and Gen Z, King points out. For the younger generations, “money is not the number-one factor for them,” they expect a good work/life balance, and they may be more engaged in social issues, she says. So organizations that want to be sustainable will need to appeal to these younger generations’ values.
Consumers Energy’s triple-bottom-line approach—focusing on people, planet, and prosperity—has included stepping up its commitments toward clean energy, as well as “being able to recognize justice throughout our commitment to people and planet,” says Trevor Thomas, Consumers Energy’s executive director of diversity, equity, and inclusion.
Although Consumers Energy is a large utility, its experience as its DEI work has matured can be instructive. “I encourage, no matter the size of your business, that you connect DEI to your business strategy. We see that as a commitment to embedding DEI in all we do,” Thomas says.
And along the way, the process can get uncomfortable, but that’s OK. “That is the spirit of understanding someone else’s experience and lens, where they come from, and the different intersections,” Thomas says. “It’s important to start with listening.”
Even simply asking employees questions can help you understand how inclusive your company’s culture is. For example, Giangrande suggests, you can ask employees: What does it feel like to work here? When are we not listening? Do you have any ideas?
“My recommendation for small businesses is to be comfortable in being vulnerable and to be comfortable in being transparent, because that is what truly generates growth,” King says.
In the realm of race and racism, expectations have changed. “People are looking at this from a different lens since the George Floyd incident. Organizations are recommitting to DEI, and instances of racial injustice have made people much more aware of and sensitive to equity,” Giangrande says.
“Most companies are feeling that the bar has risen, and communities are willing to hold them accountable for putting action behind their words and commitment statements,” Giangrande says.
Statements of solidarity only go so far if the company isn’t taking any action to back them up, or, worse, if its actions conflict with its words.
The mission of the Michigan Roundtable for Diversity & Inclusion is to “empower individuals to transform communities and the workplace to overcome racism, discrimination, systemic inequities, and institutional and inherent bias.” This involves helping organizations understand the depth of racism that is embedded in their organization, the communities where they work, and society in general, says Steve Spreitzer, president and CEO of the roundtable.
This work can include difficult conversations about racism and white privilege, and how they show up in your company. But, Spreitzer says, “by connecting with the people in your organization and in the community where you work who are most marginalized and harmed by racism, it will force you to check your own power and privilege that would otherwise keep you from hearing them.” And then once you hear them, you can center their voices—and include them in your strategic planning and goal setting, “to truly engage in work to improve the community,” he says.
Consumers Energy has committed to providing unconscious bias training for every leader in the company. And in DEI efforts, leadership accountability is important, Thomas says. “If your direct reports, and their direct reports, and so forth, don’t see your commitment to DEI and a connect to the business strategy and values, then everything falls apart.”
Along with formal DEI training, small businesses can use nontraditional approaches that don’t cost much, like creating space for dialog, bringing in speakers, and hosting book clubs, Giangrande says.
Supplier diversity is another opportunity that directly affects communities. Consumers Energy increased the suppliers it uses that are minority, women, veteran, service-disabled veteran, and LGBT-owned. Local chambers of commerce and local nonprofit organizations have lists of diverse suppliers, “so it’s easier than you think,” Thomas says.
One example of a practice that honors a marginalized group and is becoming more common at meetings and events is the land acknowledgment. It involves recognizing the Indigenous people who were the original stewards of the land where the meeting or event takes place.
October 11 was Indigenous Peoples Day, and it was also the day of the 2021 Boston Marathon. For the first time in 125 marathons, a land acknowledgment was read before the race kicked off. The Michigan Education Association and Michigan Association for Higher Education are also among the growing number of organizations that incorporate land acknowledgments into their meetings.
Like sustainability work, DEI work can seem overwhelming. But, Thomas says, it’s important just to get started. “Nothing has to be perfect,” he says. “It is a journey for individuals, but also for organizations, and everyone is at a different point.”
Customers, communities, and employees are demanding more from companies in both sustainability and DEI. And sustainability-minded companies are already on the right track, Thomas says.