Corporate leadership on diversity, equity, inclusion and belonging (DEIB) is vital to nurturing a more inclusive, prosperous society. Organisations large and small are uniquely placed to enact positive change, regardless of the shifting landscape around them.
There is also strong commercial reasoning behind why organisations might pursue DEIB strategies, beyond social impact. Diverse thoughts, opinions and perspectives help businesses connect with a larger customer base, increase profitability and help boost resilience – to name just a handful of benefits.
DEIB is good for business
Effective DEIB programmes drive innovation, expand market reach, enhance talent retention and boost profits.
Better connecting with consumers
In the US, 120 million people do not see themselves represented in ads, adversely impacting brand value and purchasing decisions.1 Additionally, for 88% of consumers, authenticity is a key factor when choosing a brand, so companies need to make sure their efforts come from a genuine place.2 When we connect with people on a human level, we leave a lasting and positive effect.
Boosting performance
When companies have diverse teams, they do better financially – reaching new markets and coming up with new ideas.3 And teams with diverse management result in a 19% revenue increase – not to mention profit margins that are nearly 10% higher4 – compared to those with below-average diversity.
DEIB-driven investment strategies are on the rise too, with prominent financial institutions leading the charge.5 Influential organisations such as the Principles for Responsible Investment (PRI) are encouraging more investors to integrate DEIB into investment and ownership decisions.
Improving resiliency to new regulations
Policymakers and regulators are also calling for companies to prioritise inclusivity. While globally, there is no consensus for good DEIB disclosure, local trends and regulations are emerging that could impact companies. For example, in the US, Supreme Court rulings could soon impact how companies report on their DEIB efforts while across the US and UK, current regulations already call for certain companies to transparently disclose relevant DEIB information.
Four steps for building diversity, equity, inclusion and belonging
Increasingly, companies are being held to account for the social impact they have. Flag has outlined four steps organisations can follow to navigate this changing commercial, social and reporting landscape.
- Step 1: Listen and take stock of current stakeholder sentiment.
- Step 2: Prioritise and define your strategy for strengthening DEIB.
- Step 3: Take action to embed DEIB throughout your value chain.
- Step 4: Report and communicate your progress and areas for improvement.
Every journey begins with the first step – make sure you’re going in the right direction. To better understand how DEIB will affect your organisation and how to implement or enhance your strategy, explore our focused guide, or reach out at info@flag.co.uk.
1 Adobe: Despite 25 Years of Ad Growth, Diversity Remains a Challenge.
2 Stackla: Post-Pandemic Shifts in Consumer Shopping Habits.
3 Forbes: Diversity Confirmed to Boost Innovation and Financial Results.
4 Boston Consulting Group: How Diverse Leadership Teams Boost Innovation.
5 Forbes: Investors Are Waking Up to Market Potential of Diversity, Equity and Inclusion.
