Strategic Plans Are Scrutinized for DE&I and ESG Policies. Would Yours Stand Up?
Investors, consumers and employees want to see diversity & inclusion and efforts to stop climate change. A well-designed plan is crucial.
Developing strategic plans in this time of economic, political, societal, environmental and technological turmoil may seem like a counterintuitive exercise for companies. Many focus on short-term survival and immediate profits.
However, strategic plans that account for DE&I (diversity, equity and inclusion) and ESG (environment, social and governance) are crucial to maintaining momentum, galvanizing growth and ensuring longevity. Key business stakeholders – employees, investors, customers, regulators, business partners and more – have greatly increased their expectations of businesses to help stop climate change and create a more just and inclusive society.
For instance, “The Great Resignation” is partly driven by employers alienating workers by not committing to corporate responsibility and a culture of inclusion. And many other people consider companies’ ESG and DE&I performance before becoming investors, employees or buyers of products and services.
Edelman, an international public relations firm, publishes its Edelman Trust Barometer based on more than 30,000 interviews globally each year. The 2022 report says 58% of consumers, 60% of potential employees and 64% of investors say they weigh these factors. Businesses whose policies lack cohesion or whose corporate values aren’t reflected in their products and services will become less competitive.
Many local business leaders mistakenly think that because Hawai‘i has ethnic diversity, they can check the diversity box and not give it more attention. But that’s the wrong approach: There’s dissatisfaction among residents over housing, cost of living and other social issues, plus growing support for LGBT, neuro-diverse, disabled and formerly incarcerated people who have long been marginalized in the workplace.
Strategic planning requires a thoughtful process and comprehensive vision to produce substantive DE&I and ESG programs. Here is what’s needed to develop, implement and reap the benefits of such plans:
- Clarity around a company’s mission and values.
- Alignment with long-term business strategy.
- Benchmarking comparable companies, so expectations, investment costs and desired outcomes can be reasonably set.
- Developing ambitious but achievable plans that are measurable and authentic and add to business success.
- An internal rollout campaign and training for all levels of management.
- External communications that will inform potential employees, investors and customers about the programs, thus strengthening the company’s reputation.
- Actions that bring the plans to life, reassuring stakeholders of progress and adherence.
Legitimate DE&I and ESG programs are key to a new model of business that is far different from simply focusing on profit for stockholders. Today, stakeholders insist companies operate in ways that also accomplish some social good and protect the environment. To that end, a commitment to strategic planning is worth the effort.