Aligning DEI and Corporate Responsibility:?Advantages and Pitfalls

As organizations worldwide struggle with tightening margins, they are looking for ways to align diversity, equity and inclusion (DEI) efforts with other business priorities. Some companies are merging DEI with corporate responsibility (CR). There are natural synergies between DEI and CR, but there are also some pitfalls that, if not avoided, can dilute impact and strategy.

Areas of synergy

Both DEI and CR are fundamentally about reaching out to disenfranchised communities, bringing new market insights to the table and driving collaborative solutions to business challenges. DEI has traditionally been more inward focused, on workplace and corporate culture, while CR looks outward at the organization’s role and influence in society, with an emphasis on the social and environmental impact of business operations.

As social movements such as PRIDE, Black Lives Matter and #MeToo have built momentum, organizational DEI is increasingly as concerned now with external partnerships, public positioning, and the alignment of internal policies with external impact. Likewise, CR departments are increasingly aware of the need to diversify their staff, to empower employees to live responsibly on an individual level, and to analyze power and privilege vis-a-vis the environmental, social and economic issues they seek to address.

Talent recruitment, retention and engagement is perhaps the clearest area of synergy for DEI and CR. It is well documented that prospective employees are increasingly looking at company track records in terms of environmental impact, responsible business practices, inclusion and diversity. In these times of sharp talent shortages, both DEI and CR have a role to play in attracting the best talent, and creating a workplace that employees are proud to belong to and where they want to stay.

DEI and CR both can help to drive innovation. It is well documented that more diverse teams that reflect a diverse consumer base lead to an increase in innovation revenue. Likewise, CR helps businesses better understand the context in which they work and connects them with the social and environmental issues that need attention, thus sparking innovative product and service solutions.

Both DEI and CR represent powerful components of the brand personality and can be drivers of increased brand recognition, trust and consumer choice in the marketplace. The issues consumers care about cross the lines between people and planet—bridging diversity and inclusion as well as sustainability and broader corporate responsibility. They include being a good employer, managing environmental impacts, issues of equality, etc. These are all part of a company’s brand promise and therefore a unifying purpose between companies and their customers.

Ultimately, the results of effective DEI and CR efforts are felt in the community. Separately and together, these functions work to support underrepresented communities through job growth, recruiting, supply management, philanthropy, volunteerism, supply chains and overall environmental impact. There are many overlaps here, with DEI often emphasizing jobs and community relations and CR emphasizing localized philanthropy, volunteerism and environmental impact. Many CR issues continue to disproportionately impact communities of color: environmental degradation, poor waste management and climate change have led to famine, unsafe drinking water, malnutrition, asthma, and more across the globe. When CR teams work with DEI to understanding how racism, inequity, power and privilege compound and exacerbate the problems, their interventions are more likely to be relevant and sustainable.

With effective stakeholder engagement the functions can also help businesses better understand new markets, especially in different parts of the world. DEI and CR can help the broader business understand cultural nuances, comply with local laws and regulations and build trust in the local market. Additionally, they can help businesses foster relationships to establish social license to operate, cultivating the acceptance of the local community and other stakeholders to enable the enterprise to enter and sustain business in a new market.

How organizations have aligned DEI and CR

Organizations have used a variety of approaches to enable DEI and CR to align and magnify each other’s impact.

Traditionally, DEI and CR have operated in very different spaces, particularly in the US. Increasingly, some organizations are experimenting with having both functions report to the same person. Other organizations have created governance councils with representatives from both DEI and CR. When both internal and external communication and reporting is synergized, organizations have found that often there is a more holistic and consistent understanding of the issues and messaging about them. Mandatory Environmental, Social and Governance (ESG) reporting requirements, now make it even more necessary for CR and DEI to collaborate, as DEI relates directly to the social stream of data collection and analysis. Information sharing through regular cross team meetings can lead to shared initiatives and the identification of collaborative opportunities.

Pitfalls to Avoid

While there is enormous potential in further synchronising DEI and CR efforts, there are some pitfalls to avoid.

First, there is a danger that DEI gets subsumed by CR – incorporated into teams that may not be as diverse or do not have the expert knowledge of power, privilege, and cross-cultural dynamics. If “people issues” are not viewed as important as climate change, for example, DEI may not get the focus it deserves.

Metrics are key to both functions, but it can sometimes be easier to show the bottom-line impact of CR initiatives. For example, it is easier to demonstrate the money saved through sustainable waste management, than it is to show the direct impact of DEI initiatives on retention and employee engagement. While the two functions can and should collaborate in measuring and tracking their impact, it is dangerous to always use the same yardstick.

Traditionally the social impact of CR has been viewed as philanthropy. In this approach, the danger is if DEI falls under a CR umbrella that it will then be positioned as charity rather than as critical to business success. In aligning the two, it is crucial that both be seen as central to the business and the brand. Without this focus, there is a risk that the perception of DEI’s contribution to the mission of the organization becomes diluted.

Conclusion

When CR and DEI are aligned, they have the potential to become more than the sum of their parts – becoming a coherent force for positive change and, more than that, helping organizations become the change they want to see in the world.

In a time of increased skepticism and performative allyship, prospective employees and consumers look for authenticity – do companies walk the walk, talk the talk? Do their internal commitments mirror their public stances?

Effective alignment between CR and DEI, where both are equally valued, both inform the other and enrich and magnify the work will ultimately lead to organizations whose internal culture is a model for the world, and whose public stances engage, motivate and inspire its diverse workforce.

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References:

Sodexo’s paper “Common Purpose”: https://us.sodexo.com/files/live/sites/com-us/files/our-impact/CommonPurposePaperFINAL.pdf