COVID-19 and social turbulence have dominated the past few years, and likely the world will never be the same. Adaptive working and the implications for women and other underrepresented groups haven’t been positive before or during the pandemic. There is much work to be done by company leaders to ensure Diversity, Equity, and Inclusion (DEI) commitments are overhauled, enforced, and remain long after COVID-19 is gone. Significant change is upon us, and ESG funds are poised to overhaul an industry that has remained complacent for far too long when it comes to DEI.
Women and people of color have been impacted more than others because of their representation in the workforce. As some companies shifted to survival mode mentality, forgetting about their ‘people problems’ and their commitment to DEI, others have used this time as an opportunity to rebrand and overhaul their company’s culture and recommit to DEI:
- Nine out of ten CEOs prioritized DEI during the pandemic
- Two out of five companies globally are expanding their investments in DEI programs even as they cut budgets elsewhere.
- Nine out of ten CEOs state that DEI remains a moderate, very important top priority for them.
ESG funds have due diligence requirements beyond just adhering to what can be statistically measured or screened. As fiduciaries, they must always act in the best interest of their beneficiaries and implement and enforce DEI social standards within their own company:
SOCIAL- Consideration of people and relationships
- Customer satisfaction
- Data protection and privacy
- Gender and diversity
- Employee engagement
- Community relations
- Human rights
- Labor standards
“Still, nine out of ten executives we surveyed report challenges in executing their DEI strategies. Although companies have responded rapidly, employees—and in particular diverse employees and working parents—are still struggling with the multitude of challenges posed by the pandemic. The result: only one in six diverse employees feels more supported now.”- Diverse employees are struggling the most during COVID-19-here’s how companies can respond, McKinsey.
Often, ESG funds cannot tackle DEI issues at beneficiary organizations or within their organization. When problems arise, working with an industry-specific PEO, such as Aspen HR, helps ensure that DEI and social and governance factors are met. Aspen HR and the fund company create a DEI action plan and periodically monitor the progress to ensure that all stakeholders are involved and diverse employees feel supported. The fund company differentiates itself as a DEI leader in the asset management industry.