Business partners and consumers are increasingly paying attention to what companies are doing in terms of DEI and ESG – especially if they feel companies are not walking the walk. But just as important is the value created through the enactment of DEI and ESG initiatives.

How does DEI provide value?

• Inclusive workplaces have higher employee happiness rates and talent retention;
• Ethnic and cultural diversity, especially among executive teams, leads to greater profitability;
• Diverse and inclusive teams are often more creative and innovative than homogenous groups; they bring different experiences, perspectives, and approaches to solve problems.

A 2019 McKinsey Group report highlights 5 ways that ESG provides added value:

• Top-line growth – Companies have better access to markets and resources through stronger relationships with community and regulators, and attract more customers thanks to sustainable products and practice;
• Cost reductions – Reducing operating expenses by cutting down resources use such as water, fuel, paper, or energy, can be achieved by reformulating products, implementing more efficient manufacturing processes, and preventative maintenance;
• Reduced legal and regulatory interventions – Progressive ESG initiatives can protect corporate profits from government interventions which can be significant based on industry areas;
• Employee productivity uplift – ESG contributes to greater quality employee attraction and retention; it also can contribute to greater job satisfaction and productivity;
• Investment and asset optimization – Forward-looking ESG initiatives can tap into promising and sustainable emerging markets and get ahead of future regulations that may be more costly to comply with retroactively