A Lesson for Earth Day 2021: Climate Action Requires Diversity, Equity and Inclusion
As world leaders gather for Earth Day this week, governments and corporations will be under the microscope for the steps they’re taking to combat the climate crisis. While this has become an annual tradition, this year presents a new opportunity to tackle two of the most pressing issues of our time together.
The overwhelming majority of Americans are demanding greater action on the climate, surveys find. Across the past decade, more and more people have said they want environmental protection prioritized over economic growth. This shift is playing out in investment strategies as well. A recently released poll from Robeco found that climate change is now “a significant factor in the investment policy of almost three-quarters (73%) of investors surveyed.”
Meanwhile, the past year has also shown us that governments and businesses must address another crucial issue just as rapidly: diversity, equity and inclusion (DEI). The protests for racial justice, following videos of unarmed Black men being killed by police, sparked new calls for real commitment to addressing inequalities. Surveys show Americans want to see much greater action.
Again, the same goes for the investing community. In a survey by Ernst & Young, investors named environmental concerns and diversity as two of the top three drivers of success over the next several years (right after “quality of strategy and ability to execute”).
Here’s the good news: these two issues go hand-in-hand.
How environment and diversity are linked
To transform their operations in ways that will decarbonize and address the perils of climate change, businesses need to innovate. That requires bringing together employees of different ideas, perspectives, backgrounds and experiences -- and empowering them to be heard. As Nasdaq has pointed out, “Research shows that taking steps on diversity translates to meaningful change and innovation across the organization.”
This is true in any arena, but it has particularly strong resonance when it comes to the environment. While all of humanity faces perils of climate change (something my own family has grappled with), some individual communities are particularly vulnerable. For example, as Princeton University has noted, more than half those who live near hazardous waste are people of color, and Native American tribes are among the worst affected by ocean acidification.
Diversity and inclusion help make sure all of these different concerns remain front of mind. As a study from Griffith University in Queensland, Australia, explains, most corporations “tend to be reflective of white, masculine values,” so they “construct the notions of, and responses to, climate change and sustainability from the purview of the privileged, and overlook the competing interests and epistemic diversity that surrounds these social issues. Responsible leadership requires diversity of perspective and of knowledge, especially on climate change, the effects of which are impacting social groups in highly variegated ways according to gender, class and race.”
I’ve seen this play out. After a career as a change leader and safety and operational risk director in oil and gas, I left to launch an organization aimed at bringing more women and minorities into the energy sector. With each step, I saw that the more women and people of color entered the field and rose to higher positions, the more their companies accelerated efforts to transition to renewables. The links among equity, the environment, and the emerging enemy economy are clear.
Promises, setbacks and triumphs
This Earth Day and all year round, leaders in government and business should address equity and the environment together. In highlighting their work on the climate, they should include discussions of what they’re doing to make diversity promises a reality as well.
This includes a frank discussion of setbacks and failures, not just proclamations of triumph. Americans, including investors, are understandably wary. After years of lip service, they want to know that substantive change is really happening. And they want to know that leaders are learning from mistakes. After all, studies show that many investors prize honesty in assessing companies and their executives.
Fortunately, none of this means giving up on profits. Businesses that make diversity and inclusion a reality also see greater returns.
In 2019, the Business Roundtable made waves by updating its statement on the purpose of a corporation. Rather than existing principally to serve shareholders, the CEOs of the Roundtable said their businesses would now also be about serving customers, employees, suppliers, and communities -- which includes protecting the environment through sustainable practices. A year later, one analysis said businesses were failing to pull through on their vow.
Now, as corporations look to the future, they can see this as a time filled with opportunity. By focusing on equity and the environment together, executives can galvanize new efforts. They can build workforces filled with people committed to making big, substantive changes. They can turn the promises they make on Earth Day -- and all year round -- into reality.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.