March 12, 2025 • 33 mins
President Donald Trump’s executive order to end “illegal” diversity, equity and inclusion programs in the federal government has accelerated the trend of companies rolling back their initiatives to foster more equitable workplaces. On this episode of ESG Currents, David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion and Belonging at NYU, joins senior ESG analysts Gail Glazerman and Rob Du Boff to discuss the mounting pressure on corporate diversity, equity and inclusion efforts and ways companies can cultivate more inclusive workplaces while avoiding legal pitfalls and challenges.
This episode was recorded on Feb. 21.
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Speaker 1 (00:09):
DSG has become an established as a key business theme
as companies investors seek to navigate the climate crisis, energy transitions,
social mega trends, mounting regulatory attention and pressure from other stakeholders.
The rapidly evolving landscape has become inundated with acronyms, buzzwords
and lingo, and we aim to break these down with
(00:29):
industry experts. Welcome to ESG Currens, your guide to navigating
the evolving ESG space, one topic at a time. Brought
to you by Bloomberg Intelligence, part of Bloomberg's research department,
with five hundred analysts and strategists working across all major
world markets. Our coverage includes over two thousand equities and credits,
as well as outlooks on more than ninety industries and
(00:50):
one hundred market indices, currencies and commodities. I am Gail Glazerman,
Senior ESG Integration Analyst, and I'm.
Speaker 2 (00:59):
Rob Duboff ESG Analysts, and we're your hosts for today's episode.
Speaker 3 (01:03):
Now.
Speaker 2 (01:03):
Over the past few years, diversity equity inclusion, more commonly
known as DEI, has become a big topic of conversation
in both the public and private sector. The issue really
gained momentum in twenty twenty following the murder of George Floyd,
and more recently became a target from anti DEI activists
pushing companies to roll back on these efforts. It really
(01:24):
came front and center in the US under the new administration,
which signed an executive order banning so called illegal DEI.
To better understand the current mood, we're talking with David Glasgow,
executive director of the Meltzer Center for Diversity, Inclusion and Belonging.
We'll discuss the shifting landscape and how companies can best
navigate competing interests.
Speaker 3 (01:44):
Thanks for joining us, David, it's a pleasure to be
here now.
Speaker 2 (01:48):
President Trump's executive order specifically called out illegal DEI. What
exactly do you think illegal DEI means?
Speaker 3 (01:56):
Well, that's the million dollar question.
Speaker 4 (01:57):
It's a term that everyone that I speak to in
organizations are scrambling to figure out right now. I think
what's important to emphasize is that the executive order itself
cannot create a new cause of action for forms of
DEI that were formally legal and turn them into things
that are now illegal. What is illegal or legal will
(02:20):
be set by statute, so laws like Title seven of
the Civil Rights Act of nineteen sixty four or another
federal law called Section nineteen eighty one, which prohibits race
discrimination in contracting, and those laws are interpreted by the
Supreme Court. That's where the actual definition of what is
illegal or legal will come from, not from an executive order.
(02:43):
But if I had to guess at sort of what
the order means by the term, it often pairs that
concept of illegal DEI with the concept of preferences. So
you see that paired over and over in the language
of the Executive order, a legal discrimination and preferences unlawful preferences.
So I think what it's really getting at forms of
DEI that confer some preference on members of a legally
(03:08):
protected group, so a preference based on race, sex, or
otherwise in employment. And so that's where I think that
what the Executive Order is getting at.
Speaker 2 (03:19):
Yeah, I mean my sense is that there's been this conflation,
particularly after the Supreme Court firmative action case, that you know,
Supreme or sorry, that affirmative action and DEI are synonymous,
which they're very much not. But how do you think
we got here? What do you think companies have done right?
Speaker 1 (03:36):
And wrong.
Speaker 4 (03:37):
Yeah, So I think a lot of that conflation, frankly,
has been quite deliberate on the part of anti DEI activists.
They want people to believe that DEI is just affirmative
action and preferences, and so they've been quite successful, I
think in driving that narrative. But I think in terms
of what DEI advocates or organizations have not done well,
(03:59):
part of it is just actually explaining what DEI really means.
There's been a heavy reliance on the use of the
acronym DEI or an assumption. I think that the values
of diversity, equity and inclusion sound good and sound like
something that everyone should support, and therefore there isn't really
that much need to justify why we're doing it, how
(04:20):
we're doing it, and how they connect with our business
and our values. And so if I were to kind
of offer advice to organizational leaders about how to get
on the front foot a little bit right now, it
would be to slow down and kind of explain to
your employees and customers and others why you care about
these values of diversity, equity and inclusion, connect them to
your business, and hopefully with that greater understanding, people will
(04:43):
be able to disentangle it from affirmative action.
Speaker 2 (04:47):
Yeah, I mean I alluded to this in my intro,
just that you know, I think it's really come front
and center since twenty twenty, and to be honest, and
it sounds like you would agree that a lot of
those efforts to rush it out the door have been
quite clumsy. But has anyone actually benefited in the last
few years from this focus on the EA?
Speaker 3 (05:05):
Oh? I think so.
Speaker 4 (05:06):
I mean, it's very hard, as I'm sure you know,
in this area to empirically measure the success of different
DEI programs because they're typically there's many programs all rolled
out at the same time. It's usually not done in
a kind of controlled trial where some part of an
organization gets a DEI intervention and some other part does not,
(05:28):
and then you measure over time which one improves the
culture and the climate in one area versus another. So
social scientists have tested the efficacy, for instance, of different
forms of diversity training, but there are so many different
kinds of DEI interventions, from mentorship programs through to parental
(05:48):
leave and flexible work options and the like that they
are very hard to improically test. But yeah, I absolutely
think so. I mean, I don't have the statistics at
my fingertips, but there have been, you know, modest but
slight improvements in representation of women and people of color
in say, corporate boards or at the top of professions
(06:09):
like law and other professional service firms, for instance, over
the years. I think a lot of members of marginalized
groups like the LGBTQ community certainly feel more welcomed in
corporate America now than what they did prior to the
rise of kind of DEI programs, And so the kind
of climate of sort of harassment and discrimination that was
(06:30):
sort of rampant decades ago, I think has been improved
somewhat by DEI programs. So yeah, I mean, of course
some of it is performative. There was such a rush
toward DEI after the murder of George Floyd in twenty
twenty that I think some organizations adopting these programs did
so in a, as you say, clumsy or slap dash fashion.
But many organizations, it's worth recalling, have been doing DEI
(06:54):
work for decades, and I think if you really embed
it in the systems within your organization, it can be active.
Speaker 1 (07:01):
And taking a broader look at ESG, at least how
it's talked about has been transformed over the years. It
started out as socially responsible investing, then there was impact
investing in ESG, and now it feels like it's going
through yet another reinvention, at least in terms of terminology.
And I'm wondering, do you see any sort of similar
precedent within specifically the subsegment of DEI initiatives.
Speaker 4 (07:25):
Absolutely so, DEI really grew out of the Civil Rights
Act of nineteen sixty four, but it started out as
affirmative action. Right organizations actually had departments that were called
affirmative action departments within their organizations. And then the backlash
to affirmative action during the eighties under the Reagan administration
(07:47):
caused the organizations engaged in that work to undergo a
bit of a rebrand of what they were doing. And
so that's where the term diversity management came up, and
it started to be justified less by the need to
rectify historical injustice and more by a desire to promote
productivity and innovation and business success. And then that term
(08:11):
diversity management evolved into diversity inclusion. Diversity and inclusion then
evolved into diversity equity and inclusion. And then of course
I've also seen other terms crop up, like belonging. Some
organizations use JEDI with justice, equity, diversity, and inclusion. I mean,
there are all sorts of different formulations of it. So yes,
(08:34):
I think this kind of branding and rebranding has really
been a cycle for many decades now, and it's likely
to undergo another rebrand now.
Speaker 1 (08:43):
And to a large degree, it feels like DEI has
become a scapegoat, blamed for almost everything from bank failures,
fires to plane crashes, even wars, and I'll just acknowledge
without evidence, and I'm just wondering. So you know, certainly
there are cases where it's gone too far. That's probably
the exception than the rule. I assume you would agree,
(09:04):
But how do you disentangle well intentioned DEI from some
of the more controversial elements. And are there any sort
of specific buckets and ways that you would recommend that
companies think about this as they put their maybe reevaluate
their programs.
Speaker 4 (09:19):
Yeah, I mean I think kind of blaming you know,
bridge collapses and plane crashes and wildfires and so on
on DEI to me is just completely and obviously absurd
and often it sort of bleeds into what seems like
pretty blatant racism and sexism to me, frankly, it's you know,
people will look around to try to find a black
(09:41):
leader or a woman leader involved in any way with
these tragedies, and then say that that must be DEI,
as though you can't actually be black or a woman
and have any merit to be appointed to these positions.
So all of that I find quite sort of outrageous. Nonetheless,
you know, I do think that you're right that there
are some for of DEI that have been more helpful
(10:03):
than others. So for example, you know, I would say
some of the approaches that emerged after the murder of
George Floyd where people were very concerned about cancel culture.
It's not really a term you hear very much nowadays,
because I don't think many people are getting canceled, but
at the time that there was a significant concern around
(10:24):
you know, language policing and thought policing, and having people
feel as though if they had any doubts, if they
had any disagreements with certain aspects of DEI, that they
shouldn't voice those because they would get shamed or blamed
for having those sorts of opinions. I think that kind
of an approach is unhelpful, doesn't actually create a more
(10:45):
inclusive culture. It often creates a less inclusive culture by
just pushing people's thoughts underground. So I think, you know,
moving away from those sorts of forms of DEI to
ones that are a bit more embracing of free speech,
disagreement and open dialogue and less blaming and shaming would
be a good maneuver for organizations to adopt.
Speaker 2 (11:09):
I mean, speaking of cancel culture, right, you don't hear
it as much other than you know now you have
investigations of technology companies and engage or banks and engage
in so called canceling or deplatforming. Now, definitely, on the
one hand, there should be consequences for harmful words and actions,
which can be damaging for brand value or corporate culture.
But I also see where it can be heavy handed,
(11:30):
incentivizing both sides to just completely disengage, which is also problematic.
How would you advise companies to navigate this issue?
Speaker 4 (11:39):
Yeah, I mean, I think you know, there's no precise
bright line, but I think to some extent it's a
matter of the egregiousness of the conduct right as to
how serious the repercussion should be. So it's a kind
of proportionality test. It's sort of there are certain mistakes
that everyone in society makes when it comes to DEI.
(12:02):
Maybe it's accidentally using terminology that someone didn't realize was
out of date, for instance, misgendering someone confusing to people
who belong to the same identity group with one another,
you know, and so on, and if the person acknowledges
the mistake and tries not to do it again, I
don't sort of think that those sort of instances in
(12:23):
which people should experience severe repercussions, Whereas you know, the
use of outrageously offensive slurs, for instance, or repeated harassing
or discriminatory behavior, I would sort of put that in
a different bucket.
Speaker 1 (12:38):
Can we dig maybe a little bit deeper into the
types of things that you think companies that want to
have a more inclusive culture can actually do without more
most likely running foul of actual legal challenges.
Speaker 3 (12:54):
Yeah, I mean the good news is it's a lot
of things.
Speaker 4 (12:56):
Because in my opinion and in my center's work, we
think that DEI work is unlawful or legally risky when
it hits what we call the three ps, and those
are a preference for a protected group with respect to
a palpable benefit. So a good example of this would
be if you have say an internship program, scholarship grant,
(13:22):
fellowship program, etc. And you set the eligibility criteria so
that you have to belong to a particular underrepresented group
in order to access say the internship, then that would
hit the three p's because it's a preference for members
of a protected group, and it's with respect to a
palpable benefit, which is just an internship, right. I just
mean they're like a concrete employment benefit. So anything that
(13:45):
doesn't hit even one of those three ps is low
risk from my perspective. So think about something like structured
hiring or a performance evaluation or promotion processes. Many yourizations
have tried to standardize how they do hiring, an evaluation,
and promotion by coming up with job relevant criteria, by
(14:10):
making sure that they ask candidates the same questions, that
they have a scoring rubric that they use to assess candidates,
and all of those are designed to minimize implicit bias
in the process. Because we know that if you just
have an open ended interview or an open ended process
without set criteria. That's where a lot of biased assessments
can creep in. So something like that is completely legally
(14:33):
safe because there's no preference being conferred on anyone, let
alone in relation.
Speaker 3 (14:38):
To a protected group.
Speaker 4 (14:39):
So all of those kinds of processes that involve leveling
the playing field, creating sort of merit based structures that
try to take implicit bias out of a system are
going to remain perfectly legal going forward. Another good example
is disability accommodations. I mean, we don't talk about that
a lot in this debate, and part of the reason
(15:01):
for that is that disability you can engage in even
quite aggressive forms of affirmative action on the basis of
disability under the relevant federal law. It's unlike race and
sex in that regard. So you know, work to create
a more inclusive and equitable environment for people with disabilities
and ensure that you're accommodating them is not only lawful
(15:24):
going forward, but is actually if you don't do it,
it's unlawful. Right, you have to reasonably accommodate disability. So
those are just I mean, there are plenty of examples.
That's really the good news here. Is I think the
universe of DEI work that's unlawful is smaller than the
universe that's lawful.
Speaker 1 (15:41):
You mentioned obviously protected groups and the challenges there are
there other kind of cohorts that companies might be able
to look to to maybe get the same sort of
diversity or equity across their culture that aren't protected exactly.
Speaker 4 (16:01):
So Title seven protects against discrimination on the basis of race, color, sex,
national origin, and religion and sex. There includes sexual orientation
and gender identity. So if you have, say a program
that aims to advance socioeconomic diversity, a program that is
about first gen status people first in their family to
(16:24):
go to college, those programs would be legally safe because
those socioeconomic status and first gen status are not protected characteristics.
So what that means is, you know, you could have
a program, for example, that even gives a bump to
people who have come from a lower socioeconomic background and
you would be legally permitted to do that. Now, there
(16:47):
is a slight asterisk on that, which is that depending
on how you do it, there could be challenges arguing
that you are just using a proxy for race and
trying to sneak race discrimination in through the back door.
Speaker 3 (17:02):
So if you say decided that you.
Speaker 4 (17:04):
Were going to give a preference to people from particular
zip codes, and you chose those zip codes because you know,
based on residential housing segregation, it's likely to have more
racial diversity in those zip codes, then people anti DEI
activists may argue that what you're really doing is race discrimination,
and that the zip code preference is just a pretext
(17:27):
or a proxy for race discrimination. So you have to
be careful about how you go about doing it. But
if you're genuinely desiring to create more opportunity and access
for people for low as SISO economic backgrounds, and I
think that's a really important and helpful thing for organizations
to do.
Speaker 3 (17:43):
Right now, I.
Speaker 2 (17:45):
Did want to ask about quotas. I mean, I see
the appeal in the business world because they're easy to
measure and communicate and therefore easy to manage. But I
also understand that strictly managing to a fixed number is
not always align the best business decisions, and in some cases,
like a formative action, it's now illegal discrimination. From what
(18:07):
you've seen, are quotas helpful well, I.
Speaker 4 (18:10):
Would distinguish between quotas and aspirational goals quotas, which are
a fixed percentage that you're going to set aside for
a member of a particular group. You have to meet
that threshold in hiring or promotion. That is a high
risk strategy. I mean, that's been high risk for a
very long time. It's common in a lot of other
(18:32):
countries to have legally protected quotas, but in the United
States that's a high risk strategy and would hit those
three p's that I was referring to earlier. I would
distinguish that, though, from having an aspirational goal. So something
like we aim to increase our percentage of women leaders
in our business by thirty percent over the next ten
(18:56):
years or whatever, whatever the aspiration might be. What organizations
would want to do, there is just not tie that
to manage a compensation. So don't say to your executives
that they'll get a bigger bonus if they ensure that
they hire more women on their team. That could also
be hit those three p's of giving a preference for
(19:17):
a protected group.
Speaker 3 (19:18):
On hiring or promotion.
Speaker 4 (19:20):
But if you just have it as a kind of
vague aspirational goal, there is case law approving of that
and distinguishing that from quotas and suggesting that that kind
of an act is permissible. Clearly the administration does not
like it. Anti DEI activists don't like it. There was
a letter that went out, you know, a couple of
(19:41):
weeks ago from state attorneys general of Red States to
the major banks accusing them all of having unlawful quotas.
And the evidence of the so called unlawful quotas it
was that they had announced aspirational diversity goals.
Speaker 3 (19:56):
So there's a.
Speaker 4 (19:56):
Clear attempt by the anti DEI activists to inflate those
two and so you'd have to sort of be be
careful about how you went about it. But I certainly
think that they are legally defensible as a practice if
they are aspirational in nature.
Speaker 2 (20:11):
Yeah, it's interesting that you bring up the compensation links.
That's something I do a lot of work on my research.
And I mean, certainly, you know you're looking to incentivize
better behavior, but it's also kind of a slippery slope
of you know, trying to if you're incentivizing, then maybe
that's the only reason, or it's hard to kind of
(20:32):
justify what other reason you might have in certain hiring decisions.
In other words, you know, were they hired, Were they
hired because they're qualified or just because I want to
get my bonus there for I wanted to tweak my
workforce this way. Is there a way to incentivize better behavior?
Speaker 4 (20:50):
Yeah, I mean I think that it's still okay, for example,
to have as part of performance expectations.
Speaker 3 (20:59):
A.
Speaker 4 (21:01):
Criteria that would tell people that they need to engage
in certain inclusive leadership practices. So you could have, for example,
built into a performance evaluation criteria that you apply to
your workers. You know, here are our company values. One
of those values is creating an inclusive work culture and
(21:23):
assess people on how effective they are at leading diverse teams,
of being good allies to others, of understanding barriers and
biases that different people within the organization might be experiencing,
of displaying the characteristics of inclusive leadership, whether those be
you know, curiosity, resilience, ability to navigate conflict, engaging cross
(21:46):
cultural communication.
Speaker 3 (21:47):
And the like.
Speaker 4 (21:48):
So a focus on those kinds of inclusive leadership behaviors
I think is perfectly valid to assess people on and
to expect competency in. It's when that bleeds into more
raw numerical targets like have you hired enough people of color?
Have you hired enough women? That's where the danger arises, because,
as you say, it starts to suggest that they may
(22:12):
actually be making employment decisions based on characteristics like race
or sex. And that's where it starts to become unlawful
under laws like Title seven.
Speaker 1 (22:22):
And I think we touched on this earlier, but it's
just amazing to me, even on like mainstream news news
right now, how often I'm seeing stories about some major
company purportedly backing away or reframing some of their diversity,
equity inclusion initiatives. And you know, the latest trend and
wrinkle on that is people analyzing changes in terminology and
(22:46):
context in ten keys. And I'm just wondering what should
investors be looking for in these announcements and documents. Are
you seeing just in general substantive changes in what companies
are doing, or is this something maybe more analogous to
the green hushing that we've seen on climate goals in
recent years.
Speaker 3 (23:07):
So I think it's both.
Speaker 4 (23:09):
And that's what makes this so hard to disentangle is
that you know, I've done a pretty deep review of
pretty much all of the corporate statements that have come
out retreating or supposedly retreating from certain aspects of DEI,
and they fall into a number of buckets. Really, one
is there are genuine retreats from certain kinds of DEI
(23:31):
that organizations have identified as either legally or socially risky.
So a number of the statements say things like, we
don't use quotas, we're going to open up programs to
participation for everyone, so that we're not doing those hitting
those three p's that I just mentioned. You know, maybe
we're retiring representation goals because we're concerned about you know,
(23:52):
their conflation with quotas and so forth. So that's one
bucket is just we're not going to do certain DEI
practices that we have determ and are risky in some way.
Others are you know, socially risky. So withdrawing from the
Human Rights Campaigns Corporate Equality Index for LGBTQ inclusion, for instance,
I mean, there's no legal reason why you can't participate
(24:14):
in that, but some companies clearly have decided that they
don't want to associate their brand with perhaps an organization
that's perceived to be more of an advocacy group, and
perhaps on issues LGBTQ issues that they find controversial in
some way. But then, as you sort of suggested, Gail,
I think some of this is also a kind of
(24:34):
branding exercise. What's been really notable to me in reading
these statements is that a lot of them, even as
they walk away from certain aspects of DEI, will reaffirm
values that sound almost identical to the DEI practices that
they're disavowing. So statement after statement after statement will say,
(24:59):
all right, well, not doing this bit of DEI. We're
tweaking our DEI programs. However, we continue to believe in
the importance of sourcing talent from a wide range of
backgrounds to ensure that that we have a variety of
perspectives in the room and that we're you know, finding
talent wherever it lies, which to me is just another
way of describing diversity. And then they will say, oh,
(25:21):
and we also want to ensure equal opportunity and fairness
in all of our workplace systems. And I'll say, okay,
well that's just equity. And then they'll say, and we
also want to create a welcoming culture where people from
all backgrounds can thrive and feel that they belong, and
I think, well, that's just inclusion. So I think there's
(25:43):
a lot of strange sort of side stepping going on
of signaling that we're not doing these risky programs over here,
but then also trying to signal that we still care
about creating the kind of culture that DEI represents, whether
that's for our employees, offer our customers. And there's a
kind of needle threading exercise that a lot of organizations
(26:05):
seem to be doing right now of trying to kind
of have it both ways and get the anti DEI
activists and the administration off their back while also telling
their employees, investors, consumers that they're still committed to the
underlying values.
Speaker 1 (26:21):
Do you think they're hitting that mark or would you
anticipate that we start to see a backlash against the backlash.
Speaker 4 (26:28):
I think we will see a backlash against the backlash,
and in fact we're already getting some dimensions of that.
I was. I just saw kind of reporting on Target
and the impact that the kind of backlash against the
backlash has been having on Target because they've been sort
of pilloried by folks who care about DEI for their retreat.
Speaker 3 (26:50):
From those values.
Speaker 4 (26:52):
So you know, I think that we're going to see
that happen more. Another sort of element of the backlash
to the back lash is not consumers, but employees. You know,
I speak to leaders sometimes who will say, look, we
had to announce changes to our DEI strategy and we've
withdrawn from it, and now we're dealing with a whole
bunch of angry employees within our organization who no longer
(27:18):
feel supported or cared for by us, and are wondering
if we are still committed to the values that we
supposedly were committed to over the last several years. And
so there's that kind of element of it as well.
So I think a lot of companies are not, frankly,
doing an excellent job of threading that needle. And you know,
one organization that I would point to who I think
(27:38):
has done a good job so far at least is McKinsey,
where they released a statement saying proudly, we are going
to continue our diversity and inclusion work because we see
it as perfectly consistent with meritocracy. It's been a part
of our values for one hundred years. We don't think
these two things are opposed to each other, diversity in meritocracy.
(28:01):
In fact, we think we find the best people by
making sure that we're sourcing from a wide range of
backgrounds and we're not doing anything unlawful, and so we're
going to continue doing it. I think that kind of
a statement is one I would like to see more of,
because I think over the long run, those kinds of
organizations are going to experience less backlash than the ones
(28:21):
who are perceived as just sort of flip flopping based
on whatever the political circumstances they're now in.
Speaker 2 (28:29):
You know, in ESG world, we talk a lot about materiality.
So for example, climate change is something that is important
for everyone on planet Earth. But maybe if you're an
oil company should be thinking about a little bit more
embedding in your strategy than say, if you're a pharmaceutical company.
You know, just do you have something like that in
the DEI space where maybe there're certain industries where particularly
(28:50):
more consumer focused ones where you know, there should be
greater emphasis on DEI and others where maybe it's not
necessarily core to their business strategy or maybe customer base
or you know, thinking here about butt light or you know,
the whole row over that was the alienated a big
chunk of their core traditional customer base. So is that
(29:11):
something that needs to be thought about when developing a
DAI strategy.
Speaker 3 (29:15):
Yeah, I think it does.
Speaker 4 (29:16):
I mean it's a very good question because I think
it's important to again kind of understand what each of
those three letters of the acronym mean, because diversity is about,
you know, diversifying the actual personnel within the organization. Equity
is about creating fairness in organizational systems, and inclusion is
about the kind of culture that is welcoming, where everyone
(29:36):
feels that they can show up to work and that
they're treated fairly and with respect and so on. So
you know, I think really anyone who runs any sort
of business and employees people should care about making sure
that the climate that they are entering in the workplace
is welcoming and inclusive. I mean, I just can't think
of an example of an organization that could legitimately say
(29:59):
as part of its business strategy, no, we actually sort
of want a kind of toxic workplace where people feel
excluded and so so that I think I would sort
of hold to and same with equity of making sure
that processes are fair.
Speaker 3 (30:14):
I don't think you.
Speaker 4 (30:15):
Want employees feeling like the people who get the best
work or the people who get the promotions are the
people who are buddies with the boss, and that it's actually,
you know, not transparent or fair in you know, who
gets rewarded, how people are paid, and so on and
so forth. I think the one that is maybe a
little bit more vary depending on the context of the
(30:38):
organization is the diversity piece of it. So Scott Paige,
a scholar, has written a book around in what circumstances
diversity is connected with business success. A lot of people
talk about the business case for diversity. Diversity makes businesses
more innovative, more productive, more creative, and so forth, and
(30:58):
Scott Page sort of points out that it depends somewhat
on the nature of the business of how big an
impact diversity has on business success. If you work in
an organization that is very cognitively focused and it's non routine,
people are doing different things each day, that's where diversity
really helps. You get people from a wide range of
(31:20):
perspectives in a room, throw ideas around. You really want
people to be coming in from a variety of different standpoints.
If you're just making widgets, maybe sort of the diversity
of perspectives in the room and is not going to
make as much of a difference to the business outcomes,
And so I could see some nuance there. I could
also see some nuance in the kinds of DEI activities
(31:44):
that you get involved in. You know, as you sort
of suggested, maybe if you are a more progressive business,
if you recruit a more progressive employee base, you might
be willing to be more outspoken on social issues as
part of your organization publicly, Whereas perhaps if you have
a more conservative consumer or employee base, maybe you don't
(32:07):
want to be as outspoken on certain DEI related social issues.
So yes, I think all of that needs to be
sort of taken into account when you're setting DEI strategy.
Speaker 3 (32:15):
But the basic values.
Speaker 4 (32:17):
Of we want to treat people faily, we want to
create an inclusive climate, we want to source talent from
a wide range of backgrounds.
Speaker 3 (32:23):
I really feel like that.
Speaker 4 (32:24):
Should be consistent across all businesses that want to be successful.
Speaker 1 (32:28):
Yeah. I couldn't agree more. Every time I speak to companies,
sometimes they talk about diversity and then you push and
they're really just talking about culture and more of like
conclusion David, Thank you so much for your time today.
You can find more information on managing diversity, equity inclusion
by going to BIESG and clicking through some of our
(32:50):
research on the Bloomberg terminal. If you have an ESG
quandary or burning question you'd like to ask bi's expert analysts,
please send us an email at ESG currents at Bloomberg
dot net. Thank you once again for joining us
DSG has become an established as a key business theme
as companies investors seek to navigate the climate crisis, energy transitions,
social mega trends, mounting regulatory attention and pressure from other stakeholders.
The rapidly evolving landscape has become inundated with acronyms, buzzwords
and lingo, and we aim to break these down with
(00:29):
industry experts. Welcome to ESG Currens, your guide to navigating
the evolving ESG space, one topic at a time. Brought
to you by Bloomberg Intelligence, part of Bloomberg's research department,
with five hundred analysts and strategists working across all major
world markets. Our coverage includes over two thousand equities and credits,
as well as outlooks on more than ninety industries and
(00:50):
one hundred market indices, currencies and commodities. I am Gail Glazerman,
Senior ESG Integration Analyst, and I'm.
Speaker 2 (00:59):
Rob Duboff ESG Analysts, and we're your hosts for today's episode.
Speaker 3 (01:03):
Now.
Speaker 2 (01:03):
Over the past few years, diversity equity inclusion, more commonly
known as DEI, has become a big topic of conversation
in both the public and private sector. The issue really
gained momentum in twenty twenty following the murder of George Floyd,
and more recently became a target from anti DEI activists
pushing companies to roll back on these efforts. It really
(01:24):
came front and center in the US under the new administration,
which signed an executive order banning so called illegal DEI.
To better understand the current mood, we're talking with David Glasgow,
executive director of the Meltzer Center for Diversity, Inclusion and Belonging.
We'll discuss the shifting landscape and how companies can best
navigate competing interests.
Speaker 3 (01:44):
Thanks for joining us, David, it's a pleasure to be
here now.
Speaker 2 (01:48):
President Trump's executive order specifically called out illegal DEI. What
exactly do you think illegal DEI means?
Speaker 3 (01:56):
Well, that's the million dollar question.
Speaker 4 (01:57):
It's a term that everyone that I speak to in
organizations are scrambling to figure out right now. I think
what's important to emphasize is that the executive order itself
cannot create a new cause of action for forms of
DEI that were formally legal and turn them into things
that are now illegal. What is illegal or legal will
(02:20):
be set by statute, so laws like Title seven of
the Civil Rights Act of nineteen sixty four or another
federal law called Section nineteen eighty one, which prohibits race
discrimination in contracting, and those laws are interpreted by the
Supreme Court. That's where the actual definition of what is
illegal or legal will come from, not from an executive order.
(02:43):
But if I had to guess at sort of what
the order means by the term, it often pairs that
concept of illegal DEI with the concept of preferences. So
you see that paired over and over in the language
of the Executive order, a legal discrimination and preferences unlawful preferences.
So I think what it's really getting at forms of
DEI that confer some preference on members of a legally
(03:08):
protected group, so a preference based on race, sex, or
otherwise in employment. And so that's where I think that
what the Executive Order is getting at.
Speaker 2 (03:19):
Yeah, I mean my sense is that there's been this conflation,
particularly after the Supreme Court firmative action case, that you know,
Supreme or sorry, that affirmative action and DEI are synonymous,
which they're very much not. But how do you think
we got here? What do you think companies have done right?
Speaker 1 (03:36):
And wrong.
Speaker 4 (03:37):
Yeah, So I think a lot of that conflation, frankly,
has been quite deliberate on the part of anti DEI activists.
They want people to believe that DEI is just affirmative
action and preferences, and so they've been quite successful, I
think in driving that narrative. But I think in terms
of what DEI advocates or organizations have not done well,
(03:59):
part of it is just actually explaining what DEI really means.
There's been a heavy reliance on the use of the
acronym DEI or an assumption. I think that the values
of diversity, equity and inclusion sound good and sound like
something that everyone should support, and therefore there isn't really
that much need to justify why we're doing it, how
(04:20):
we're doing it, and how they connect with our business
and our values. And so if I were to kind
of offer advice to organizational leaders about how to get
on the front foot a little bit right now, it
would be to slow down and kind of explain to
your employees and customers and others why you care about
these values of diversity, equity and inclusion, connect them to
your business, and hopefully with that greater understanding, people will
(04:43):
be able to disentangle it from affirmative action.
Speaker 2 (04:47):
Yeah, I mean I alluded to this in my intro,
just that you know, I think it's really come front
and center since twenty twenty, and to be honest, and
it sounds like you would agree that a lot of
those efforts to rush it out the door have been
quite clumsy. But has anyone actually benefited in the last
few years from this focus on the EA?
Speaker 3 (05:05):
Oh? I think so.
Speaker 4 (05:06):
I mean, it's very hard, as I'm sure you know,
in this area to empirically measure the success of different
DEI programs because they're typically there's many programs all rolled
out at the same time. It's usually not done in
a kind of controlled trial where some part of an
organization gets a DEI intervention and some other part does not,
(05:28):
and then you measure over time which one improves the
culture and the climate in one area versus another. So
social scientists have tested the efficacy, for instance, of different
forms of diversity training, but there are so many different
kinds of DEI interventions, from mentorship programs through to parental
(05:48):
leave and flexible work options and the like that they
are very hard to improically test. But yeah, I absolutely
think so. I mean, I don't have the statistics at
my fingertips, but there have been, you know, modest but
slight improvements in representation of women and people of color
in say, corporate boards or at the top of professions
(06:09):
like law and other professional service firms, for instance, over
the years. I think a lot of members of marginalized
groups like the LGBTQ community certainly feel more welcomed in
corporate America now than what they did prior to the
rise of kind of DEI programs, And so the kind
of climate of sort of harassment and discrimination that was
(06:30):
sort of rampant decades ago, I think has been improved
somewhat by DEI programs. So yeah, I mean, of course
some of it is performative. There was such a rush
toward DEI after the murder of George Floyd in twenty
twenty that I think some organizations adopting these programs did
so in a, as you say, clumsy or slap dash fashion.
But many organizations, it's worth recalling, have been doing DEI
(06:54):
work for decades, and I think if you really embed
it in the systems within your organization, it can be active.
Speaker 1 (07:01):
And taking a broader look at ESG, at least how
it's talked about has been transformed over the years. It
started out as socially responsible investing, then there was impact
investing in ESG, and now it feels like it's going
through yet another reinvention, at least in terms of terminology.
And I'm wondering, do you see any sort of similar
precedent within specifically the subsegment of DEI initiatives.
Speaker 4 (07:25):
Absolutely so, DEI really grew out of the Civil Rights
Act of nineteen sixty four, but it started out as
affirmative action. Right organizations actually had departments that were called
affirmative action departments within their organizations. And then the backlash
to affirmative action during the eighties under the Reagan administration
(07:47):
caused the organizations engaged in that work to undergo a
bit of a rebrand of what they were doing. And
so that's where the term diversity management came up, and
it started to be justified less by the need to
rectify historical injustice and more by a desire to promote
productivity and innovation and business success. And then that term
(08:11):
diversity management evolved into diversity inclusion. Diversity and inclusion then
evolved into diversity equity and inclusion. And then of course
I've also seen other terms crop up, like belonging. Some
organizations use JEDI with justice, equity, diversity, and inclusion. I mean,
there are all sorts of different formulations of it. So yes,
(08:34):
I think this kind of branding and rebranding has really
been a cycle for many decades now, and it's likely
to undergo another rebrand now.
Speaker 1 (08:43):
And to a large degree, it feels like DEI has
become a scapegoat, blamed for almost everything from bank failures,
fires to plane crashes, even wars, and I'll just acknowledge
without evidence, and I'm just wondering. So you know, certainly
there are cases where it's gone too far. That's probably
the exception than the rule. I assume you would agree,
(09:04):
But how do you disentangle well intentioned DEI from some
of the more controversial elements. And are there any sort
of specific buckets and ways that you would recommend that
companies think about this as they put their maybe reevaluate
their programs.
Speaker 4 (09:19):
Yeah, I mean I think kind of blaming you know,
bridge collapses and plane crashes and wildfires and so on
on DEI to me is just completely and obviously absurd
and often it sort of bleeds into what seems like
pretty blatant racism and sexism to me, frankly, it's you know,
people will look around to try to find a black
(09:41):
leader or a woman leader involved in any way with
these tragedies, and then say that that must be DEI,
as though you can't actually be black or a woman
and have any merit to be appointed to these positions.
So all of that I find quite sort of outrageous. Nonetheless,
you know, I do think that you're right that there
are some for of DEI that have been more helpful
(10:03):
than others. So for example, you know, I would say
some of the approaches that emerged after the murder of
George Floyd where people were very concerned about cancel culture.
It's not really a term you hear very much nowadays,
because I don't think many people are getting canceled, but
at the time that there was a significant concern around
(10:24):
you know, language policing and thought policing, and having people
feel as though if they had any doubts, if they
had any disagreements with certain aspects of DEI, that they
shouldn't voice those because they would get shamed or blamed
for having those sorts of opinions. I think that kind
of an approach is unhelpful, doesn't actually create a more
(10:45):
inclusive culture. It often creates a less inclusive culture by
just pushing people's thoughts underground. So I think, you know,
moving away from those sorts of forms of DEI to
ones that are a bit more embracing of free speech,
disagreement and open dialogue and less blaming and shaming would
be a good maneuver for organizations to adopt.
Speaker 2 (11:09):
I mean, speaking of cancel culture, right, you don't hear
it as much other than you know now you have
investigations of technology companies and engage or banks and engage
in so called canceling or deplatforming. Now, definitely, on the
one hand, there should be consequences for harmful words and actions,
which can be damaging for brand value or corporate culture.
But I also see where it can be heavy handed,
(11:30):
incentivizing both sides to just completely disengage, which is also problematic.
How would you advise companies to navigate this issue?
Speaker 4 (11:39):
Yeah, I mean, I think you know, there's no precise
bright line, but I think to some extent it's a
matter of the egregiousness of the conduct right as to
how serious the repercussion should be. So it's a kind
of proportionality test. It's sort of there are certain mistakes
that everyone in society makes when it comes to DEI.
(12:02):
Maybe it's accidentally using terminology that someone didn't realize was
out of date, for instance, misgendering someone confusing to people
who belong to the same identity group with one another,
you know, and so on, and if the person acknowledges
the mistake and tries not to do it again, I
don't sort of think that those sort of instances in
(12:23):
which people should experience severe repercussions, Whereas you know, the
use of outrageously offensive slurs, for instance, or repeated harassing
or discriminatory behavior, I would sort of put that in
a different bucket.
Speaker 1 (12:38):
Can we dig maybe a little bit deeper into the
types of things that you think companies that want to
have a more inclusive culture can actually do without more
most likely running foul of actual legal challenges.
Speaker 3 (12:54):
Yeah, I mean the good news is it's a lot
of things.
Speaker 4 (12:56):
Because in my opinion and in my center's work, we
think that DEI work is unlawful or legally risky when
it hits what we call the three ps, and those
are a preference for a protected group with respect to
a palpable benefit. So a good example of this would
be if you have say an internship program, scholarship grant,
(13:22):
fellowship program, etc. And you set the eligibility criteria so
that you have to belong to a particular underrepresented group
in order to access say the internship, then that would
hit the three p's because it's a preference for members
of a protected group, and it's with respect to a
palpable benefit, which is just an internship, right. I just
mean they're like a concrete employment benefit. So anything that
(13:45):
doesn't hit even one of those three ps is low
risk from my perspective. So think about something like structured
hiring or a performance evaluation or promotion processes. Many yourizations
have tried to standardize how they do hiring, an evaluation,
and promotion by coming up with job relevant criteria, by
(14:10):
making sure that they ask candidates the same questions, that
they have a scoring rubric that they use to assess candidates,
and all of those are designed to minimize implicit bias
in the process. Because we know that if you just
have an open ended interview or an open ended process
without set criteria. That's where a lot of biased assessments
can creep in. So something like that is completely legally
(14:33):
safe because there's no preference being conferred on anyone, let
alone in relation.
Speaker 3 (14:38):
To a protected group.
Speaker 4 (14:39):
So all of those kinds of processes that involve leveling
the playing field, creating sort of merit based structures that
try to take implicit bias out of a system are
going to remain perfectly legal going forward. Another good example
is disability accommodations. I mean, we don't talk about that
a lot in this debate, and part of the reason
(15:01):
for that is that disability you can engage in even
quite aggressive forms of affirmative action on the basis of
disability under the relevant federal law. It's unlike race and
sex in that regard. So you know, work to create
a more inclusive and equitable environment for people with disabilities
and ensure that you're accommodating them is not only lawful
(15:24):
going forward, but is actually if you don't do it,
it's unlawful. Right, you have to reasonably accommodate disability. So
those are just I mean, there are plenty of examples.
That's really the good news here. Is I think the
universe of DEI work that's unlawful is smaller than the
universe that's lawful.
Speaker 1 (15:41):
You mentioned obviously protected groups and the challenges there are
there other kind of cohorts that companies might be able
to look to to maybe get the same sort of
diversity or equity across their culture that aren't protected exactly.
Speaker 4 (16:01):
So Title seven protects against discrimination on the basis of race, color, sex,
national origin, and religion and sex. There includes sexual orientation
and gender identity. So if you have, say a program
that aims to advance socioeconomic diversity, a program that is
about first gen status people first in their family to
(16:24):
go to college, those programs would be legally safe because
those socioeconomic status and first gen status are not protected characteristics.
So what that means is, you know, you could have
a program, for example, that even gives a bump to
people who have come from a lower socioeconomic background and
you would be legally permitted to do that. Now, there
(16:47):
is a slight asterisk on that, which is that depending
on how you do it, there could be challenges arguing
that you are just using a proxy for race and
trying to sneak race discrimination in through the back door.
Speaker 3 (17:02):
So if you say decided that you.
Speaker 4 (17:04):
Were going to give a preference to people from particular
zip codes, and you chose those zip codes because you know,
based on residential housing segregation, it's likely to have more
racial diversity in those zip codes, then people anti DEI
activists may argue that what you're really doing is race discrimination,
and that the zip code preference is just a pretext
(17:27):
or a proxy for race discrimination. So you have to
be careful about how you go about doing it. But
if you're genuinely desiring to create more opportunity and access
for people for low as SISO economic backgrounds, and I
think that's a really important and helpful thing for organizations
to do.
Speaker 3 (17:43):
Right now, I.
Speaker 2 (17:45):
Did want to ask about quotas. I mean, I see
the appeal in the business world because they're easy to
measure and communicate and therefore easy to manage. But I
also understand that strictly managing to a fixed number is
not always align the best business decisions, and in some cases,
like a formative action, it's now illegal discrimination. From what
(18:07):
you've seen, are quotas helpful well, I.
Speaker 4 (18:10):
Would distinguish between quotas and aspirational goals quotas, which are
a fixed percentage that you're going to set aside for
a member of a particular group. You have to meet
that threshold in hiring or promotion. That is a high
risk strategy. I mean, that's been high risk for a
very long time. It's common in a lot of other
(18:32):
countries to have legally protected quotas, but in the United
States that's a high risk strategy and would hit those
three p's that I was referring to earlier. I would
distinguish that, though, from having an aspirational goal. So something
like we aim to increase our percentage of women leaders
in our business by thirty percent over the next ten
(18:56):
years or whatever, whatever the aspiration might be. What organizations
would want to do, there is just not tie that
to manage a compensation. So don't say to your executives
that they'll get a bigger bonus if they ensure that
they hire more women on their team. That could also
be hit those three p's of giving a preference for
(19:17):
a protected group.
Speaker 3 (19:18):
On hiring or promotion.
Speaker 4 (19:20):
But if you just have it as a kind of
vague aspirational goal, there is case law approving of that
and distinguishing that from quotas and suggesting that that kind
of an act is permissible. Clearly the administration does not
like it. Anti DEI activists don't like it. There was
a letter that went out, you know, a couple of
(19:41):
weeks ago from state attorneys general of Red States to
the major banks accusing them all of having unlawful quotas.
And the evidence of the so called unlawful quotas it
was that they had announced aspirational diversity goals.
Speaker 3 (19:56):
So there's a.
Speaker 4 (19:56):
Clear attempt by the anti DEI activists to inflate those
two and so you'd have to sort of be be
careful about how you went about it. But I certainly
think that they are legally defensible as a practice if
they are aspirational in nature.
Speaker 2 (20:11):
Yeah, it's interesting that you bring up the compensation links.
That's something I do a lot of work on my research.
And I mean, certainly, you know you're looking to incentivize
better behavior, but it's also kind of a slippery slope
of you know, trying to if you're incentivizing, then maybe
that's the only reason, or it's hard to kind of
(20:32):
justify what other reason you might have in certain hiring decisions.
In other words, you know, were they hired, Were they
hired because they're qualified or just because I want to
get my bonus there for I wanted to tweak my
workforce this way. Is there a way to incentivize better behavior?
Speaker 4 (20:50):
Yeah, I mean I think that it's still okay, for example,
to have as part of performance expectations.
Speaker 3 (20:59):
A.
Speaker 4 (21:01):
Criteria that would tell people that they need to engage
in certain inclusive leadership practices. So you could have, for example,
built into a performance evaluation criteria that you apply to
your workers. You know, here are our company values. One
of those values is creating an inclusive work culture and
(21:23):
assess people on how effective they are at leading diverse teams,
of being good allies to others, of understanding barriers and
biases that different people within the organization might be experiencing,
of displaying the characteristics of inclusive leadership, whether those be
you know, curiosity, resilience, ability to navigate conflict, engaging cross
(21:46):
cultural communication.
Speaker 3 (21:47):
And the like.
Speaker 4 (21:48):
So a focus on those kinds of inclusive leadership behaviors
I think is perfectly valid to assess people on and
to expect competency in. It's when that bleeds into more
raw numerical targets like have you hired enough people of color?
Have you hired enough women? That's where the danger arises, because,
as you say, it starts to suggest that they may
(22:12):
actually be making employment decisions based on characteristics like race
or sex. And that's where it starts to become unlawful
under laws like Title seven.
Speaker 1 (22:22):
And I think we touched on this earlier, but it's
just amazing to me, even on like mainstream news news
right now, how often I'm seeing stories about some major
company purportedly backing away or reframing some of their diversity,
equity inclusion initiatives. And you know, the latest trend and
wrinkle on that is people analyzing changes in terminology and
(22:46):
context in ten keys. And I'm just wondering what should
investors be looking for in these announcements and documents. Are
you seeing just in general substantive changes in what companies
are doing, or is this something maybe more analogous to
the green hushing that we've seen on climate goals in
recent years.
Speaker 3 (23:07):
So I think it's both.
Speaker 4 (23:09):
And that's what makes this so hard to disentangle is
that you know, I've done a pretty deep review of
pretty much all of the corporate statements that have come
out retreating or supposedly retreating from certain aspects of DEI,
and they fall into a number of buckets. Really, one
is there are genuine retreats from certain kinds of DEI
(23:31):
that organizations have identified as either legally or socially risky.
So a number of the statements say things like, we
don't use quotas, we're going to open up programs to
participation for everyone, so that we're not doing those hitting
those three p's that I just mentioned. You know, maybe
we're retiring representation goals because we're concerned about you know,
(23:52):
their conflation with quotas and so forth. So that's one
bucket is just we're not going to do certain DEI
practices that we have determ and are risky in some way.
Others are you know, socially risky. So withdrawing from the
Human Rights Campaigns Corporate Equality Index for LGBTQ inclusion, for instance,
I mean, there's no legal reason why you can't participate
(24:14):
in that, but some companies clearly have decided that they
don't want to associate their brand with perhaps an organization
that's perceived to be more of an advocacy group, and
perhaps on issues LGBTQ issues that they find controversial in
some way. But then, as you sort of suggested, Gail,
I think some of this is also a kind of
(24:34):
branding exercise. What's been really notable to me in reading
these statements is that a lot of them, even as
they walk away from certain aspects of DEI, will reaffirm
values that sound almost identical to the DEI practices that
they're disavowing. So statement after statement after statement will say,
(24:59):
all right, well, not doing this bit of DEI. We're
tweaking our DEI programs. However, we continue to believe in
the importance of sourcing talent from a wide range of
backgrounds to ensure that that we have a variety of
perspectives in the room and that we're you know, finding
talent wherever it lies, which to me is just another
way of describing diversity. And then they will say, oh,
(25:21):
and we also want to ensure equal opportunity and fairness
in all of our workplace systems. And I'll say, okay,
well that's just equity. And then they'll say, and we
also want to create a welcoming culture where people from
all backgrounds can thrive and feel that they belong, and
I think, well, that's just inclusion. So I think there's
(25:43):
a lot of strange sort of side stepping going on
of signaling that we're not doing these risky programs over here,
but then also trying to signal that we still care
about creating the kind of culture that DEI represents, whether
that's for our employees, offer our customers. And there's a
kind of needle threading exercise that a lot of organizations
(26:05):
seem to be doing right now of trying to kind
of have it both ways and get the anti DEI
activists and the administration off their back while also telling
their employees, investors, consumers that they're still committed to the
underlying values.
Speaker 1 (26:21):
Do you think they're hitting that mark or would you
anticipate that we start to see a backlash against the backlash.
Speaker 4 (26:28):
I think we will see a backlash against the backlash,
and in fact we're already getting some dimensions of that.
I was. I just saw kind of reporting on Target
and the impact that the kind of backlash against the
backlash has been having on Target because they've been sort
of pilloried by folks who care about DEI for their retreat.
Speaker 3 (26:50):
From those values.
Speaker 4 (26:52):
So you know, I think that we're going to see
that happen more. Another sort of element of the backlash
to the back lash is not consumers, but employees. You know,
I speak to leaders sometimes who will say, look, we
had to announce changes to our DEI strategy and we've
withdrawn from it, and now we're dealing with a whole
bunch of angry employees within our organization who no longer
(27:18):
feel supported or cared for by us, and are wondering
if we are still committed to the values that we
supposedly were committed to over the last several years. And
so there's that kind of element of it as well.
So I think a lot of companies are not, frankly,
doing an excellent job of threading that needle. And you know,
one organization that I would point to who I think
(27:38):
has done a good job so far at least is McKinsey,
where they released a statement saying proudly, we are going
to continue our diversity and inclusion work because we see
it as perfectly consistent with meritocracy. It's been a part
of our values for one hundred years. We don't think
these two things are opposed to each other, diversity in meritocracy.
(28:01):
In fact, we think we find the best people by
making sure that we're sourcing from a wide range of
backgrounds and we're not doing anything unlawful, and so we're
going to continue doing it. I think that kind of
a statement is one I would like to see more of,
because I think over the long run, those kinds of
organizations are going to experience less backlash than the ones
(28:21):
who are perceived as just sort of flip flopping based
on whatever the political circumstances they're now in.
Speaker 2 (28:29):
You know, in ESG world, we talk a lot about materiality.
So for example, climate change is something that is important
for everyone on planet Earth. But maybe if you're an
oil company should be thinking about a little bit more
embedding in your strategy than say, if you're a pharmaceutical company.
You know, just do you have something like that in
the DEI space where maybe there're certain industries where particularly
(28:50):
more consumer focused ones where you know, there should be
greater emphasis on DEI and others where maybe it's not
necessarily core to their business strategy or maybe customer base
or you know, thinking here about butt light or you know,
the whole row over that was the alienated a big
chunk of their core traditional customer base. So is that
(29:11):
something that needs to be thought about when developing a
DAI strategy.
Speaker 3 (29:15):
Yeah, I think it does.
Speaker 4 (29:16):
I mean it's a very good question because I think
it's important to again kind of understand what each of
those three letters of the acronym mean, because diversity is about,
you know, diversifying the actual personnel within the organization. Equity
is about creating fairness in organizational systems, and inclusion is
about the kind of culture that is welcoming, where everyone
(29:36):
feels that they can show up to work and that
they're treated fairly and with respect and so on. So
you know, I think really anyone who runs any sort
of business and employees people should care about making sure
that the climate that they are entering in the workplace
is welcoming and inclusive. I mean, I just can't think
of an example of an organization that could legitimately say
(29:59):
as part of its business strategy, no, we actually sort
of want a kind of toxic workplace where people feel
excluded and so so that I think I would sort
of hold to and same with equity of making sure
that processes are fair.
Speaker 3 (30:14):
I don't think you.
Speaker 4 (30:15):
Want employees feeling like the people who get the best
work or the people who get the promotions are the
people who are buddies with the boss, and that it's actually,
you know, not transparent or fair in you know, who
gets rewarded, how people are paid, and so on and
so forth. I think the one that is maybe a
little bit more vary depending on the context of the
(30:38):
organization is the diversity piece of it. So Scott Paige,
a scholar, has written a book around in what circumstances
diversity is connected with business success. A lot of people
talk about the business case for diversity. Diversity makes businesses
more innovative, more productive, more creative, and so forth, and
(30:58):
Scott Page sort of points out that it depends somewhat
on the nature of the business of how big an
impact diversity has on business success. If you work in
an organization that is very cognitively focused and it's non routine,
people are doing different things each day, that's where diversity
really helps. You get people from a wide range of
(31:20):
perspectives in a room, throw ideas around. You really want
people to be coming in from a variety of different standpoints.
If you're just making widgets, maybe sort of the diversity
of perspectives in the room and is not going to
make as much of a difference to the business outcomes,
And so I could see some nuance there. I could
also see some nuance in the kinds of DEI activities
(31:44):
that you get involved in. You know, as you sort
of suggested, maybe if you are a more progressive business,
if you recruit a more progressive employee base, you might
be willing to be more outspoken on social issues as
part of your organization publicly, Whereas perhaps if you have
a more conservative consumer or employee base, maybe you don't
(32:07):
want to be as outspoken on certain DEI related social issues.
So yes, I think all of that needs to be
sort of taken into account when you're setting DEI strategy.
Speaker 3 (32:15):
But the basic values.
Speaker 4 (32:17):
Of we want to treat people faily, we want to
create an inclusive climate, we want to source talent from
a wide range of backgrounds.
Speaker 3 (32:23):
I really feel like that.
Speaker 4 (32:24):
Should be consistent across all businesses that want to be successful.
Speaker 1 (32:28):
Yeah. I couldn't agree more. Every time I speak to companies,
sometimes they talk about diversity and then you push and
they're really just talking about culture and more of like
conclusion David, Thank you so much for your time today.
You can find more information on managing diversity, equity inclusion
by going to BIESG and clicking through some of our
(32:50):
research on the Bloomberg terminal. If you have an ESG
quandary or burning question you'd like to ask bi's expert analysts,
please send us an email at ESG currents at Bloomberg
dot net. Thank you once again for joining us
Host
Eric Kane
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