Diversity will protect the planet as well as your bottom line

A more diverse workforce confers advantages for businesses, as demonstrated by the link between diversity and financial performance. Reports published by Harvard Business Review and McKinsey suggest that organisations with a strong stance on equality, diversity and inclusivity (EDI) are more profitable than their peers – by up to 33 per cent.

One of the best arguments for this positive influence is the creation of a culture where debate builds consensus through diverse ideas, as opposed to reinforcing established thinking. In turn, this leads to innovation and more effective decisions. There is also evidence that more diverse boards are less likely to take uncalculated financial risks.

Trillions in a greener economy

Arguably, the business case for action on climate change is equally solid. If the rhetoric of Extinction Rebellion doesn’t appeal, then there’s the suggestion of $26tr being unlocked from a greener economy, or the 2018 IPCC report about the impact of severe weather events, with risks counted in billions of pounds. Businesses should not underestimate the need for, or benefits to be had from, decisive action.

As you may already see, there are connections between the EDI agenda and action on climate change.

In particular, a 2017 study found a positive link between gender-diverse boardrooms, increased carbon disclosure reporting and better carbon reduction performance.

Within the built environment, if decisions don’t reflect the needs of all stakeholders, they are unlikely to deliver on climate resilience. This is not just a missed financial opportunity, it threatens the stability of the sector if funds are ploughed into assets at risk of becoming stranded in the future.

“This is not just a missed financial opportunity, it threatens the stability of the sector”

Market leaders already taking action include BlackRock (the world’s largest asset manager) and L&G (a trillion-pound investor). Both oppose boards with low female representation and assess EDI in their investment decisions. Both recognise the value of EDI in decision making, with L&G explicitly connecting diversity and climate action.

There is still some way for the built environment sector to go on delivering EDI and therefore of having an increased chance of effective action on climate change.

The gender gap remains wide

A 2018 survey from Sheryl Sandberg’s Lean In movement and McKinsey found that only 19 per cent of board members within the US property management and investment sector are female, three percentage points worse than other sectors on average. The same pattern is evident beyond the US, where recent figures show women accounting for 28 per cent of the boards of Europe’s listed real estate companies, 17.5 per cent of senior roles within transport in the EU, and 20-25 per cent of senior roles in the energy sector globally.

Age-old arguments that connect the lack of women in senior roles to parenting choices or career preferences no longer stand. Instead, studies suggest a variety of innate and unconscious biases are at work, making women less likely to be promoted than men of equivalent merit.

So, what can we do to embed EDI throughout our sector?

Diversity breeds diversity

There isn’t an exact recipe and it’s not a numbers game, but diverse organisations tend to have diversity among their leadership and decision-making forums. If women and other cultural or ethnic groups are not treated as equal, and don’t feel safe to articulate their ideas, then organisations will fail to unlock EDI’s true potential. EDI must be delivered through a comprehensive business strategy that speaks to the individual, permeates throughout organisational divisions and influences third-party decision making.

Guidance is available from the UK Government Equalities Office as well as the McKinsey report referenced earlier. It is typically helpful to initially focus on a few measures that have the strongest potential impact. The action plan we’re following at the Building Research Establishment (BRE) involves the following.

At the individual scale:

  • Raising self-awareness through coaching and awareness programmes, to help individuals understand biases and ensure that different voices inform decision making.
  • Identifying individual and collective strengths to improve dialogue, relationships and confidence, building towards teams based on aptitude rather than nepotism.
  • Supporting role models – a board level sponsor can drive the cultural changes needed from the top and support individuals acting as role models.

At the organisation scale:

  • Championing flexible working – flexibility is recognised as critical to EDI success as well as the healthy work/life balance needed to get the best from employees.
  • Reforming recruitment practices through gender neutral job descriptions, diverse interview panels and balanced shortlists.
  • Increasing EDI visibility by supporting staff networks, events and programmes, and ensuring that all organisational communications reflect the direction of travel.

As market influencers:

  • Supporting the wider talent pool by actively supporting industry EDI initiatives such as awards, training, networking and mentoring.
  • Necessitating EDI through supply chains through positive procurement policies.
  • Championing EDI through sustainability certification schemes – BREEAM for Communities and CEEQUAL include criteria relating to stakeholder engagement, inclusive design, responsible sourcing and, more recently, modern slavery.

Diversity leads to more robust outcomes by lowering risk and encouraging new thinking, benefits that are sorely needed in the face of climate change. The agendas of EDI and climate change are thus interlinked – success in tackling climate change is dependent on EDI.

There are immediate measures that business leaders can take to drive EDI both within their organisations and across the sector. Built environment leaders cannot afford to ignore or be timid towards EDI, if the sector is to respond successfully to the climate challenge.

Charlene Clear is head of products and services, BREEAM, at BRE

The post Diversity will protect the planet as well as your bottom line appeared first on Construction News.