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How did the business case for gender balance DE&I evolved over the last 18 months?

Ria : The EDGE certification and our efforts towards gender balance in the organization have a significant impact on our institutional performance. The IDB Group finances its operations by issuing bonds in the international capital markets and the financial rating agencies are those that assign us our credit ratings, which have been triple A since 1962. Increasingly, these rating agencies are looking at social elements such as diversity as a component for our qualifications. Positive scores in this regard correlate with a reduced cost of capital that could translate into higher investor interest in IDB Group bonds and consequently could help lower borrowing costs for our clients. This is important because, in the last 18 months, Latin America and the Caribbean have been facing one of the worst crises in their history, the full magnitude of which is hard to quantify. Over the next several years, the countries we serve will have to allocate the limited financial resources they have to policies for overcoming the health crisis, containing its social and economic costs. Therefore, the low borrowing costs will ensure that our countries can focus on economic recovery and the transversal issue of gender inclusion.

The IDB Group has also developed an agenda called Vision 2025 where our institutional priorities focus on the recovery of Latin America and the Caribbean, considering diversity and gender as cross-cutting issues. Through this agenda, the organization is broadening its approach to gender balance with a focus on intersectionality. The pandemic has highlighted that all experiences and responses are not equal, and some groups may be experiencing forms of bias or discrimination. Intersectional gender equality offers a new lens through which we, as an institution, can address individual concerns and challenges based on themes such as race/ethnicity and sexual orientation within our organization and our projects in the region.

As employers, we want to be a workplace that celebrates and values the individualities and experiences of our employees. We believe that having a diverse workforce, past the monochromatic lens of gender only, positively connects with a unique skillset for problem-solving and the means to address the most urgent development challenges in Latin America and the Caribbean. This is why, in December 2020, we changed our strategy framework from “diversity and inclusion” to “diversity, equity and inclusion”. For us, fairness is a way of looking at how our employees are treated based on their respective needs. This may include equal treatment or different treatment, but is considered equivalent in terms of rights, benefits, obligations, and opportunities. The EDGE certification has played a critical role in supporting our efforts to ensure that equity is at the core of everything we do, including our talent management, and that we can be a role model for the region.

EDGE Certification brings visibility and credibility to the change happening inside the organization. At the same time, it creates the premises for diverse talent to thrive at work. Tell us some stories about how your employees benefit from the EDGE Certification journey of your organization.

Ria : One of the most tangible benefits of the EDGE Certification has been the process of developing an action plan to close the gaps which are identified during the recertification process. For example, one of the areas identified for development during the first EDGE certification process was the inequity in our parental leave policies. At that time, the IDB Group had separate policies for men and women (maternity and paternity leave). We recognized, then, that our policy was not gender-inclusive and that we needed to focus on both men and women equally. Moreover, we saw an opportunity to create greater work-life integration for all employees with caregiving responsibilities regardless of gender. The decision to revise our parental leave policy was and continues to be a visible transformative action inside the IDB Group in support of all genders.

Another initiative we started after the first EDGE certification was the Diversity, Equity, and Inclusion Awards Program to recognize employees whose commitment to equity and inclusion is unwavering. Recognizing the work of our employees was key to ensuring there are diverse opinions, ways of working, and a sense of belonging in the workplace. This program was an opportunity to celebrate the good work of our employees. The revelation of positive behaviors and support of equity provided strong examples for others to follow. The creation of this recognition program was one of the recommendations emanating from the first EDGE certification and was directly responsible for us promoting visibility and credibility to our diversity, equity, and inclusion agenda.

Our EDGE certification has also helped us strengthen our platforms and resources for women employees to succeed. We are proud of our Emerging Women Leaders (EWL) program, which currently has more than 280 graduates – women leaders – across the region, and our Employee Resource Group called Women NET, dedicated to raising awareness and support activities that foster the empowerment of women and gender equality. The women who have taken advantage of these platforms understand that it is time to change the diversity among our leadership teams and have demonstrated a dedication towards fostering new forms of leadership and empowerment within the organization.

Obtaining this certification for the third time in a row is significant, as it publicly demonstrates that we are intentional in our actions to close gender gaps and promote an equitable workplace. As the first development bank in the Americas and the second worldwide to obtain the second level of this distinction: EDGE Move, we want to serve as an example for the region and demonstrate how equity is at the center of all our priority areas, both internally and in projects in the region.

What do you think workplace gender balance, diversity and inclusion means to the next generation (e.g., of leaders / customers / investors)?

Ria : Gender balance is a persistent discussion in many spectrums of society, development, politics, culture, and more. Efforts by individual activists, private enterprises, and organizations like the IDB Group are instrumental in changing attitudes towards, equal pay for equivalent work, sexual abuse and harassment, and equal opportunities for men and women in healthcare, economic activity, and education.

Moreover, the discourse is also shifting past a unilateral focus on gender to diversity and inclusion more generally. When we think about women and girls now, we are also thinking about the unique experience of women with intersecting identities.

Realistically we know that the impact of the pandemic will affect present and future generations, so we must actively engage in policy dialogue and partnerships to ensure that gender equality and empowerment remains a key issue in national policies and in the programming of our borrowing member countries. Our clients are looking to us as a trusted advisor and development partner for technical and financial support in pursuit of gender equality because we can all agree that when women can thrive alongside their male counterparts, economies grow, and countries thrive.

Internally, our employees are also following everything we do; not just to promote a gender-equitable working environment but to create inclusive conditions for diverse talent. Today’s employee is searching for a workplace where there are equal opportunities for men and women to earn a living and succeed, while also having the flexibility to be caregivers and pursue their personal goals. We have actively been complying with the demands of new employee aspirations. For example, we are providing a financial support facility for those who are turning to alternative family planning options. Moreover, and for several years now, we have implemented an alternative working schedule policy to help employees achieve better work-life integration. The pandemic, which has meant that everyone is working remotely, caused us to double our efforts to foster a climate of trust, flexibility, and autonomy with even more options which means all employees have the flexibility to manage their time with more adaptability.

At the IDB Group, our mission is to improve lives. We promote this by visibly demonstrating the value of inclusion and working towards securing a world of equal opportunities and outcomes for all, including our next generations.

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EDGE Certified Foundation

IDB Invest was among the pioneers to use a gender lens and engage in environmental, social, and corporate governance (ESG) investing. Why do you consider gender equality, diversity and inclusion (GDI) in the workplace as material criteria in your investment and financing activities? How has this changed in post-pandemic recovery?

Alexandre Da Rosa: Since its beginning in 2016, IDB Invest has considered gender equality and, more recently, diversity and inclusion, as universal priorities in its operations. The rationale behind this lies in IDB Group’s mission of supporting inclusive economic growth in Latin America and the Caribbean. This means that we support these countries and the private sector in their growth and development journey. Strengthening diversity and inclusion is one way of doing that. Research has shown that businesses that are led by diverse teams – in terms of gender and ethnicity – yield better results. Moreover, the companies with higher performance tend to have more women in line roles than staff roles. (McKinsey, Delivering through Diversity, 2018).

The belief that diversity is one of the keys to business success has internal and external implications for IDB Invest. Internally, IDB Invest is EDGE Certified. This is a key instrument for us to have a standardized way of measuring our progress toward a more gender-balanced workforce. We are very proud to have been EDGE Move Certified this July. Externally, having GDI as priorities means that we strive to have an impact on women, men, Afrodescendant and indigenous and traditional people, LGBTQ+ and people with disabilities – in every investment we make.

Having a workplace that promotes equal access to opportunities plays a key role in priority sectors like tourism, where women represent 60% to 70% of the workforce [1], and agribusiness. These industries are labor intensive, and women play an important role in them. For example, employee attrition can increase credit risk; hence, GDI are material in many of the priority sectors in which we operate.

The importance of increasing inclusion has taken center stage in a post-COVID recovery environment. The service sectors, which require physical contact and have been the most affected by the pandemic, account for 30% of female workers in Latin America and the Caribbean. Since the pandemic began, we have experienced a 17.7% decrease in employment of women compared to 13.1% for men. This is happening in a context where women dedicate between 22 and 42 hours per week to housework and dependent care, while men dedicate 15 hours. Furthermore, we know that men’s employment is increasing at a higher rate than women’s. [2] Diversity and inclusion were an “angle” that we looked at in our investment strategies, but they are now essential to ensure that our financing is meeting the needs of a post-COVID reality: We must promote women’s employment and flexibility in the workplace. This is a key part of IDB Group’s 2025 vision: the reactivation of the productive sectors supported by gender equality and diversity.

What are the most important factors that can contribute to the large-scale adoption of gender balance, diversity and inclusion in the workplace and on boards of directors as key ESG scoring and reporting indicators?

Alexandre Da Rosa: Any type of instrument that can help scale the adoption of diversity and inclusion actions needs to provide evidence that there is a clear commitment from top management and/or boards for having a more equitable and inclusive workplace, and that the commitment is followed up with action. Three features that can help to ensure this and inform an ESG scoring are financial materiality, standardization and verifiability of the instrument.

As for financial materiality, we know there is a link between diversity in leadership and financial performance. Multiple studies by financial institutions, consulting firms and academia have proven the correlation.

When it comes to standardization of metrics associated with scoring, it is important to ensure comparability across companies, industries and geographies. Our Women’s Empowerment Principles tool, a self-diagnosis tool on gender equality, allows companies from all industries, geographies and sizes to understand where they stand in their journey. It provides them with best practices so they can start implementing them. Initiatives like the 2X Challenge [3] and particularly HIPSO [4] are also great examples of the effort to standardize the way the private sector understands the impact of female empowerment and measures it.

Finally, results should be verifiable, which is where third-party certification becomes relevant. It is a way of providing assurance to an investor that whatever metrics are being used are supported by accurate data and concerted efforts to conduct business inclusively. This last point is key in a post-pandemic context. EDGE Certification is an effective tool, as it manages to reunite these three attributes, particularly the last one.

How is EDGE Certification contributing to advancing your ESG agenda with your portfolio companies?

Alexandre Da Rosa: As investors we promote GDI in our investments in different ways, depending on what is most material (workforce, value chains or markets) to our client. Regardless of the focus area, our recommendations are always actionable and have indicators that allow us to measure progress. Consequently, our end-to-end Impact Management Framework [5] allows us to assess the potential impact of each investment in terms of GDI, and track and evaluate the impact over time. In this context, EDGE Certification, as well as other certification programs that we support that target equality in the workplace, such as the Gender Equality Seal from the UNDP, have four characteristics that we value as investors:

The first one is benchmark. Certifications such as EDGE provide an assessment of where the company stands vis-à-vis dimensions of gender equality that have been globally validated by an array of stakeholders: academia, investors, companies, talent experts and gender practitioners. This methodology drives our clients to fight any unconscious bias and discrimination in recruitment, one of our ESG requirements on labor and working conditions. [6]

Second, it drives companies to act on their results, as they cannot obtain the certification unless they have adopted an action plan that addresses the gaps. As investors we are interested in ensuring that our clients have a clear roadmap with actions and KPI’s to accelerate their journey toward gender balance, diversity and inclusion.

Third, certifications are applicable to all industries and geographies, by benchmarking companies across the world.

Finally, it requires a third-party verification, providing investors assurance of the reliability of the results.

How have you implemented this in practice? Can you share some successful examples?

Alexandre Da Rosa: We have supported clients in obtaining EDGE Certification by either financing the EDGE assessment, the implementation of the action plan, or by working with our clients in the selection of the actions that make the most sense for them to implement to reach the next level in EDGE.

We are proud to see that Danper, a Peruvian agribusiness company that we initially supported to take the EDGE assessment, is now seeing the value of becoming EDGE Certified and has not only maintained but also continued the path to recertification by itself. Danper is now EDGE Move Certified. For IDB Invest, this is a sign of success: What we see as an instrument to accelerate gender balance and for development, is seen by the client as value added to its business.

In addition to seeing the value of meeting gender balance criteria, EDGE helped first-mover banks in closing the gap in access to financing for women to take a holistic approach to gender equality, by looking at how these banks are performing internally on their inclusive policies and practices. EDGE Certification confirmed that clients like BHD León in the Dominican Republic are on the right path to achieving gender balance, making sure that what they are doing externally to address women’s financial needs is consistent with their internal efforts of equality. Today, BHD León has more than 37% female representation in management positions with profit and loss responsibilities, well above other banks in the region.

Last but not least, we issued our own gender bond in Mexico in March of this year. Being EDGE Certified sent a strong signal to the markets: IDB Invest is 100% committed to gender balance both internally and in our investments.

What impact have you seen from your gender equality, diversity and inclusion in the workplace investment and financing strategies to date?

Alexandre Da Rosa: Our investments in gender equality, diversity and inclusion have put the conversation about diversity at the forefront of financial negotiations. For example, IDB Invest only invests in private equity funds that have at least one woman on the investment committee. This has sent a powerful signal to the market: For IDB Invest, having diversity at the highest decision-making levels will make our investments better.

In addition, the use of blended finance has helped to encourage our clients to measure their gaps in the workplace though our Women’s Empowerment Principles tool [7] – which is particularly relevant when our clients are early in their equality journey – to identify their gaps and implement programs that promote the inclusion of female minorities in STEM fields. In at least four companies across the region, IDB Invest has seen how efforts to recruit more inclusively have produced results beyond the incentives IDB Invest has provided for them to start working on these issues. We have seen companies now in their fourth year of internship programs integrating women engineers in areas such as solar design and software.

In addition to driving diversity in the fund decision-making process, IDB Invest is mobilizing resources to target women-led businesses through financial instruments such as social gender bonds. IDB Invest has issued more than five bonds targeting women-owned and led businesses in four countries in Latin America and the Caribbean in addition to our own IDB Invest issued gender bond. More importantly, financial institutions have come to IDB Invest for financing and advice on how to increase the share of women-led companies in their portfolios.

Blackrock’s announcement on their investment strategy and gender balance, the Bloomberg Equality Index or Equileap Equality Index are practices and instruments that are being adopted across the financial world. Gender balance, diversity and inclusion are core part of our mission, and we will continue to work and promoted them across the financial world.

References:

[1] IIDB, “Más allá de unas vacaciones: el turismo como fuente de empleo”, 2018.

[2] IDB, “Observatorio Laboral COVID-19: Un año de COVID-19: ¿Cuál es la magnitud de la crisis laboral?”, 2021.

[3] The 2X Challenge is a G7 initiative that calls for G7 countries and DFIs to collectively mobilize $3 billion for women’s empowerment. It sets criteria so investments can be considered as mobilizers of private investment for women’s empowerment.

[4] Harmonized Indicators for the Private Sector.

[5] For more information, see our report, Managing a Portfolio for Impact.

[6] IDB Invest’s investments must meet IFC Performance Standards. In this case, we refer particularly to Performance Standard 2, which addresses non-discrimination and equal opportunity.

[7] The Women’s Empowerment Principles Gap Analysis Tool, created by IDB Invest, IDB Lab, UN Global Compact and UN Women, is a free diagnostic tool that provides a free assessment of companies’ policies and practices impacting gender equality.

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Diversity, equity and inclusion transform both employee experience and business results. Equity also faced unprecedented setbacks as a result of the COVID-19 pandemic, hence it is today even more important to foster a more equitable and inclusive workplace. A new partnership between Valore D and EDGE seeks to harness the potential for organizations that is unleashed by embracing DE&I.

Valore D and EDGE are proud to announce a new partnership established to monitor DE&I within the Italian corporate world and accelerate workplace equity nationally. This announcement comes at the conclusion of Italy’s G20 presidency, whose focus on people, planet and prosperity included a targeted assessment of gender in the workplace and in society at large.

Both Valore D and EDGE have a successful track-record in empowering organizations to turn diversity into a major asset. With over 270 member companies in Italy and a highly active programme and network, Valore D is the leading diversity-focused association in Italy committed to building a professional world without discrimination and in which gender equity and the culture of inclusion supports innovation, progress and growth of organizations and of the country.

EDGE provides the leading solution for organizations to measure, accelerate and get certified on where they stand in gender and intersectional equity and works with over 200 prestigious companies and organizations globally.

Companies with greater diversity face up to market challenges more effectively. To support companies, Valore D has developed a concrete tool, the Inclusion Impact Index®, which measures the effectiveness of a company’s diversity and inclusion policies starting from the impact in four macro-areas: governance, ability to attract, development, and retainment, so to enhance female talent over time.

The partnership with ValoreD strengthens our presence in Italy in a time where both the public institutions as well as private sector have voiced their commitment to women’s economic empowerment in the country.

“There is no progression in gender equality unless we measure”, comments Paola Mascaro, President of Valore D. “Setting clear goals and KPIs and then monitoring and tracking progress is crucial to the advancement in DE&I for both private and public sectors. As indicated by the G20 Empower – the Alliance for the Empowerment and Progression of Women’s Economic Representation – measuring to improve, building and nourishing an efficient and sustainable women talent pipeline, and enabling women to lead the future are key points to closing the workplace gender gap in the private sector. A partnership between EDGE and Valore D can provide a positive impact and the potential for acceleration in all three of these areas.”

“The partnership with ValoreD strengthens our presence in Italy in a time where both the public institutions as well as private sector have voiced their commitment to women’s economic empowerment in the country.”, says Simona Scarpaleggia, Co-CEO of EDGE Strategy.” At EDGE we are proud to support organizations by providing them with insights and concrete solutions to improve DE&I and thrive – both in terms of employee experience and business impact. Through this partnership organizations that participate in the Valore D Inclusion Impact Index® will be fast-tracked to deepen and accelerate their DE&I journey with EDGE’s robust analytical framework and independent third-party certification system.”

The importance of partnership in support of the G20 Empower initiative is clear right now: it’s time to act to reshape organizations to become truly diverse, equitable and inclusive, as well as to contribute toward a more sustainable and humanistic economy.

For further information on today’s announcement please contact our communications teams:

Press office Valore D
Paola Trotta

+39 3791551887

Ariel Mafai Giorgi

+39 3356489445

Press office EDGE
Silene Stoppa

+41 41 530 11 49

Valore D

Valore D is the first association of companies in Italy, over 270 to date, which for more than 10 years has been committed to building a professional world without discrimination, in which gender equality and the culture of inclusion support the innovation, progress and growth of organizations and of our country. Valore D supports companies by providing know-how and effective tools for a Diversity & Inclusion strategy, and offers the opportunity for inter-company dialogue thanks to the exchange of good practices and continuous dialogue between the members, Valore D is a reference point for institutions and a promoter of actions for social and economic development. of the country.

EDGE Strategy

EDGE Strategy offers an integrated SaaS-based DE&I solution allowing organizations to measure, accelerate and get certified for where they stand in terms of gender and intersectional equity. EDGE’s customer base consists of 200 large organizations in 44 countries across five continents, representing 29 different industries.

Pioneers in gender-lens investing and ESG-investing, the International Finance Corporation (IFC) considers strategies for gender, diversity and inclusion as material lending and investment criteria. Using the EDGE solution allows the IFC to gain a snap-shot overview of their clients’ gender equality status, to clearly convey the value of gender equality and to embed effective metrics for bringing about transformation. We speak with Amy Luinstra – Regional Lead, East Asia Pacific, Gender and Economic Inclusion Group – about how the IFC works with EDGE to support its lending and investment activities.

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Why do you consider gender equality, diversity and inclusion in the workplace as material criteria in your investing and financing activities?

“The short answer is that companies with better gender balance make more money and face fewer ESG risks. But the broader answer is that our work on gender is motivated by both a sustainable development case and a business case.

As part of the World Bank Group, we have twin goals to eliminate extreme poverty and boost shared prosperity. And neither of these are possible without significant progress on gender equality, so it’s part of our mission. Fully including women in the economy is a development accelerator. World Bank research from March 2020 found closing lifetime earnings gaps between women and men could yield a gender dividend of USD 172 trillion.

From an IFC perspective, we’re financing companies and therefore the business case is also important. We have consistently found that companies with better gender balance perform better. Recent research we conducted with publicly listed companies in East Asia found that those with gender-balanced boards earned two percentage points higher returns than those with all-male boards. Another study on private equity and venture capital in emerging markets in 2019 found that gender balance in senior investment teams led to 10% to 20% higher returns compared with funds that have a majority of male or female leaders. Clearly, the payoff from gender diversity is real. That’s why we work with the private sector to assess gender diversity, conduct research, and then address the gaps.”

What will lead to large scale adoption of gender balance, diversity and inclusion in the workplace and on boards as key scoring and reporting indicators?

“I think that understanding the business case I just referred to, and acting on it, is crucial. We observe that companies displaying strong leadership for gender balance issues understand the business benefits. But there are also social and reputational payoffs.

Reporting on consistent gender metrics is important. One example is stock exchanges that have implemented ‘comply with gender targets or explain’ provisions in their listing guidelines. This can activate a competitive spirit. This extends beyond stock exchanges to reporting requirements set by governments, and from gender balance targets to wider transparency related to gender-smart policies and practices. Consistent metrics, including those EDGE uses in its certification, are key because they help set the benchmark and can ignite a competitive spirit which generally tends to accelerate progress.

In addition, awards programs or certifications, like Employer of Choice awards and EDGE Certification, can be strong motivators. They are particularly useful when they’re backed up by verifiable objective criteria. In most countries that we work in, there is competition to attract and retain the best talent. Being verified that you’re an employer of choice or certified is a big selling point in tight labor markets.”

How is EDGE Certification specifically contributing to advancing the ESG agenda with your portfolio companies?

“EDGE Certification is an important part of the toolkit we offer to companies. Many companies, across diverse sectors, find certifications valuable and the market responds to them. The IFC often supports certifications that align to our values, objectives, sustainability framework and performance standards – and we ask our portfolio companies to attain these where they are relevant.

EDGE Certification is one we encourage among our portfolio companies, and it can be supplemented by IFC gender advisory services. If we review the portfolio of companies that the IFC has taken through EDGE Certification, we see it represents a range of sectors and geographies, which tells me EDGE is a broadly applicable solution.”

Which characteristics of the EDGE Certification solution do you feel are particularly valuable?

“I think what the IFC finds valuable might vary from what the companies attaining certification find valuable.

One of the things I love about the EDGE Certification and its assessment process is the mix of data sources that generate very helpful data sets, either for benchmarking or data visualization. One specific example is the career transitions chart that depicts gender disaggregated data from the previous year’s exits and entries, recruitments and promotions. It shows, in one picture, where a company is positioned currently and where it needs to focus to accelerate progress.

An independently verified certification sends a clear signal to the market that there’s a business case for gender equality. One example is a construction company in the Pacific that finds its EDGE Certification valuable when it comes to winning public tenders. It specializes in social infrastructure, schools and health clinics, and the government responds positively to the EDGE Certification verification of their commitment to gender equality. Another example is the appeal EDGE Certification offers potential employees in a tight labor market. Therefore, the business case, or the specific advantage of EDGE, varies by market and by sector. Still, EDGE Certification also has characteristics that make it appealing to a broad range of companies, economies and geographies.”

How does implementing the EDGE solution with clients dovetail into the wider gender advisory work being done by the IFC?

“We find EDGE Certification is an excellent entry point for us to start working with companies because it offers a comprehensive snapshot of where the company is positioned on gender equality. An assessment for EDGE Certification helps us identify a client´s priorities on gender equality, then we can help address these priorities.

For example, the EDGE employee survey can reveal underlying issues within the corporate culture, such as sexual harassment or bullying behaviour directed toward women. We can then begin working to create respectful workplaces, which includes not only work on an anti-bullying and anti-sexual harassment policy but also awareness-raising, training and a wider effort to embed a more respectful workplace culture. In summary: EDGE is a good entry point for us to help clients through a range of interventions that can help boost their gender-balance performance.”

Do you offer the EDGE solution to clients across a range of industries and geographies? And is there a particular example that stands out?

“Yes. We use EDGE with client companies across the globe and in sectors ranging from construction to tourism, food processing, banking and the garment industry. Our five most recently EDGE-certified clients are from diverse countries and sectors, from Papua New Guinea to Brazil, Vietnam, Sri Lanka, and Pakistan. No matter the location or industry, we use the EDGE assessment to see where the bottlenecks are and then work with companies on addressing those bottlenecks.

One example that stands out is the EDGE Certification for a garment industry company in Vietnam. The EDGE Assessment allowed us to identify issues in the way men and women were being promoted. While there was more-or-less gender balance across different levels, there was an imbalance in promotions, so equality in the career pathway was not working.

We guided the client through the process of identifying desired key skills and career pathways, helping them to ensure equal opportunities for women – who usually joined as sewing machine operators – to make clear how they could advance. We also helped the client in effectively disseminating information to staff about skill-development opportunities to move into senior management-level positions. It’s important to note that this is a company whose overall EDGE results were positive. EDGE Certification strengthens the case for this client to become an employer of choice, and it also allows us to work with a client to further improve.”

Yes, we are very excited about the potential of EDGEplus to help us address intersectionality issues, which are always present even if clients are not demanding to address them yet. There has been strong interest in markets where we’ve engaged on topics related to disability inclusion as well as sexual orientation and gender identity. But I think, right now, for most markets intersectional equity is something we as the IFC are often raising with the clients and not something they are demanding. But this will change, and we’re delighted to have the opportunity to work with the EDGEplus tools to start to put analytical rigor behind this analysis.

Are you working with companies on intersectional equity?

“Yes, we are very excited about the potential of EDGEplus to help us address intersectionality issues, which are always present even if clients are not demanding to address them yet. There has been strong interest in markets where we’ve engaged on topics related to disability inclusion as well as sexual orientation and gender identity. But I think, right now, for most markets intersectional equity is something we as the IFC are often raising with the clients and not something they are demanding. But this will change, and we’re delighted to have the opportunity to work with the EDGEplus tools to start to put analytical rigor behind this analysis.”

The data we collect over time with our clients show both operational and reputational improvements as a result of the work we do. It’s important that the IFC itself is EDGE Certified. We’ve been working with the tool for six years and this adds to our credibility in the market. We know first-hand that the metrics really do motivate senior management. And, as an organization ourselves, we’ve made a lot of progress in the last six years. All of this helps our reputation in working with clients—if we had a dramatic gender imbalance in our leadership team or workforce, then we would not be able to credibly deliver these services.
The second point I wanted to make is about COVID-19, because its impact on gender balance in the workforce is pronounced and negative. And this is true for every country and economy in which it’s been studied. In some markets unemployment rates are now more than double for women what they are for men. A study by McKinsey Global Institute found that women are losing jobs 1.8 times as quickly as men. Even companies we’ve worked with to ensure the COVID impacts are not gender related are still seeing gender imbalance. We just see women dropping out of the workforce. And this makes standardized solutions such as EDGE important to make organizations aware of the inequities from the COVID impact.

Are there any other points you would like to make?

“The data we collect over time with our clients show both operational and reputational improvements as a result of the work we do. It’s important that the IFC itself is EDGE Certified. We’ve been working with the tool for six years and this adds to our credibility in the market. We know first-hand that the metrics really do motivate senior management. And, as an organization ourselves, we’ve made a lot of progress in the last six years. All of this helps our reputation in working with clients—if we had a dramatic gender imbalance in our leadership team or workforce, then we would not be able to credibly deliver these services.

The second point I wanted to make is about COVID-19, because its impact on gender balance in the workforce is pronounced and negative. And this is true for every country and economy in which it’s been studied. In some markets unemployment rates are now more than double for women what they are for men. A study by McKinsey Global Institute found that women are losing jobs 1.8 times as quickly as men. Even companies we’ve worked with to ensure the COVID impacts are not gender related are still seeing gender imbalance. We just see women dropping out of the workforce. And this makes standardized solutions such as EDGE important to make organizations aware of the inequities from the COVID impact.”

EDGE Certified companies are serious about putting gender and intersectional equity at the heart of their business strategy. We sat down with Christopher Bylone, Global Director of Diversity, Equity & Inclusion at International Flavors & Fragrances, to ask about today’s hot topics in DE&I.

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EDGE: What’s currently at the forefront of organizational DE&I agendas?

Christopher: Discussions on best-in-class strategies are focused on ‘equity’. At IFF equity is about recognizing the roadblocks impacting historically underrepresented groups in the workplace and purposefully working to remove them. Full equity means all colleagues across the workplace’s diversity spectrum have equitable access to and opportunity for advancement at every stage of the employee life cycle, including talent acquisition and career development.

It’s no longer enough to only focus on diverse representation. Organizations must be intentional about equitable practices at all levels. And this intentionality must focus on intersectionality. While focusing on gender equality is vital for creating a diverse, equitable and inclusive culture, it’s not enough. A DE&I strategy that’s not examining the equitable representation of women of colour, women working with a disability, LGBTIQ+ women, trans women, non-binary or individuals of other intersections, will do so at its detriment.

EDGE: How has the Covid-19 pandemic impacted DE&I advancements in organizations?

Christopher: Initial concerns were that the pandemic would negatively impact engagement, as employees and managers both took time to fully understand this new way of working. But it’s led to a shift in the way organizations think about how work gets done.

A senior IFF leader shared a great story: the shift to home office saw an already top-performing team member dramatically improve the quality of his work and outperform his peer group. She got curious and asked him what changed. His response altered her way of thinking on remote work. He told her that, as a person with autism, being in the traditional office environment takes a lot of his energy. Now that he can work from home, he can take the energy he has spent just dealing with the buzz of the office and direct it into his work.

We need to capture these positive transformations. The pre-pandemic culture of hiring-for-fit must be replaced with selecting talent that will add value to the organizational culture. This new normal is an opportunity: it opens up pipelines of talent previously ruled out by geographic limitations. Fully understanding how to access these new talent pools will take time, but it’s an opportunity to further diversify the workplace.

EDGE: Which of the positive changes and achievements do you believe will be sustainable?

Christopher: I would reframe this question to “Which of the positive changes and achievements do you believe MUST be sustainable?” Intersectionality is key here. Our world becomes increasingly complex and interconnected every day. Each of us have unique identities and experiences that shape who we are and influence our perspectives and our interactions. Too often, individuals belonging to underrepresented groups find themselves having to temper certain aspects of their identities in order to make themselves more acceptable in the workplace.

For example, in some workplaces, Black employees state they are expected to wear their hair in ways that are deemed ‘appropriate’; women also report being taken more seriously by their peers when they adopt traits that are considered more traditionally ‘masculine’; LGBTIQ+ individuals often say they have to conceal their sexual orientation or gender identity for fear of being discriminated against, or in some cases, prosecuted by the laws of their country. And for individuals that stand at the intersection of multiple such identities, this struggle becomes particularly poignant.

As an organization with a deeply held commitment towards equality and equity for all, it is imperative that IFF provides a safe space for our employees to bring their whole and authentic selves to work. It would be disingenuous of leaders to expect employees to section-off different parts of their identities and experiences to fit in with the way an organization measures progress made on diversity, equity and inclusion.

EDGE: The ESG agenda is in the spotlight. Has this allowed DE&I professionals access to new conversations in their organizations?

Christopher: From my network of fellow DE&I professionals, across multiple industries and regions, I know the conversation has shifted from fighting for measurable KPIs to providing guidance on what to include. We’ve gone beyond just ‘diversity’ KPIs: they remain integral, but there’s a strong need to also incorporate ‘inclusion’ KPIs in the tracking and reporting that is done.

DE&I has also shifted from being the ‘right thing to do’ to being increasingly demanded by external stakeholders such as investors, customers and prospective employees. In fact, research by McKinsey & Co shows organizations frequently outperform their peers financially when they are highly diverse across multiple identities, can effectively manage that diversity and foster an inclusive culture. It’s therefore logical that companies are expected to deliver transparent reports on workforce diversity and robust plans and practices to ensure continued equitable representation at all levels, including senior leadership.

EDGE: How can employees advance the DE&I agenda within their organizations? And can employee advocacy shape the long-term strategy DE&I professionals champion?

Christopher: This is a particularly exciting question. When I start my day, I ground myself in the belief that I am working on behalf of the 24,000 IFF employees all around the globe. We believe a best-in-class DE&I program is employee led – it is our DE&I volunteers who make it possible for us to create the positive change needed.

Structure is an important way to make this happen. Unlike many other organizations, we don’t have an ‘Executive DE&I Committee’ comprising of only Executive Committee members. Instead, our ‘Global DE&I Steering Committee’ comprises employees from all global locations and levels and works on behalf of the Executive Committee. The global agenda is then translated into regionally and community relevant plans by our ‘Regional Inclusion Councils’ (RICs) and ‘Colleague Communities’ (also known as ‘Employee Resource Groups’).

As a US-based DE&I professional, I am always asking myself, “How will this action/decision have a positive impact on the shop floor employee in Singapore or Chile or Slovenia?” The answer to this question is the very reason we have the RICs and Colleague Communities. They allow direct involvement of the very employees who will be impacted by new decisions or utilise new platforms. It’s crucial we involve individual contributors at every stage of the process – this ensures we create and sustain a program that is truly inclusive of their voice and expectations.

Chin Loo Low, Head of Asia Pacific Region EDGE Strategy, on the impact of ESG trends and the Covid-19 pandemic in APAC.

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Gender balance, diversity and inclusion have gained traction in APAC over the last decade. What are the driving factors?

“Diverse teams are a recognized business advantage and there is an impatience and demand for diversity from stakeholders, including employees, investors and policy makers. The question is, why then are some companies still willing to rate poorly on gender equality in the workplace?

This is where sustainability reporting and ESG trends are influential. A big corporate theme over the past decade has been ESG. In Asia, rapid growth in large developing countries like China and India have come at the cost of the environment. This is no longer acceptable. Companies are now compelled by mandatory sustainability reporting to disclose carbon emissions, labour practices and material risks arising from their businesses and supply chains.

Gender balance, diversity and inclusion put the ‘S’ in ESG and companies are starting to prioritise it more. Organizations realise now they need to assess the material risks that arise out of poor social practices and governance. Thankfully legislation is finally catching up, with progress being made in sexual harassment laws, compulsory paternity leave and quotas of women on boards, for example.”

“The pandemic has compounded the age-old problem of how women cope with the double-barrel syndrome of having to work and, in many cases, also act as primary caregivers.

Lockdowns around the globe have increased care burdens and taken women out of the workforce. The UN estimates that the pandemic could roll-back 25 years of progress in the area of gender equality. Unless something is done to address this, we face stark repercussion due to greater gender inequality, including a significant increase in risk of women dying from poverty and slower economic growth.”

How has the Covid-19 pandemic impacted this?

“The pandemic has compounded the age-old problem of how women cope with the double-barrel syndrome of having to work and, in many cases, also act as primary caregivers.

Lockdowns around the globe have increased care burdens and taken women out of the workforce. The UN estimates that the pandemic could roll-back 25 years of progress in the area of gender equality. Unless something is done to address this, we face stark repercussion due to greater gender inequality, including a significant increase in risk of women dying from poverty and slower economic growth.”

“Because APAC is so diverse and its cultures so different, companies operating in the region should adopt region-wide best practices. Companies recognising that employees are their best asset should seek the status of ‘employer of choice’. How do you demonstrate this? Through setting a framework of policies and practices that develop employees to their fullest potential, regardless of race, language, gender, sexual orientations, etc. But it needs to be structured, with metrics to track, report, analyse and benchmark workplace equality.”

APAC is a huge and hugely diverse region. Given this, how can ESG metrics help bring consistency to assessments of workplace equality?

“Because APAC is so diverse and its cultures so different, companies operating in the region should adopt region-wide best practices. Companies recognising that employees are their best asset should seek the status of ‘employer of choice’. How do you demonstrate this? Through setting a framework of policies and practices that develop employees to their fullest potential, regardless of race, language, gender, sexual orientations, etc. But it needs to be structured, with metrics to track, report, analyse and benchmark workplace equality.”

Where do you think progress needs to be made when it comes to ESG ratings?

“Environmental performance has been prioritised over the ‘S’ in ESG. This is because the risk climate change poses to business operations is more tangible and more heavily regulated. In contrast the social components of ESG – such as diversity and inclusion, health and certain workplace issues – require catch-up on the regulatory and legislation side.

Progress is being made. Let’s take a look at Singapore as an example. Only in 2014 were laws against sexual harassment introduced. New mandatory paternity benefits reflect shifting mindsets and cultural attitudes towards recognising parenting as a joint responsibility. In the corporate domain, there has been a push for more women on corporate boards. Companies are also increasingly called upon to disclose societal impact as well as environmental.

Ultimately, if we want to transform workplaces, then building in-house capacity to understand social indicators is good governance. It improves an organizations ability to interpret and use ESG data for risk management and capital allocation. And it allows this to occur as part of ‘business-as-usual’.”

Are there any stand-out ESG success stories you’d like to share?

“EDGE methodology is used by the Bloomberg Gender Equality Index, Equileap Indices and Dow Jones Sustainability Indices. These recognise companies who are taking concrete actions and I encourage you to look at the companies in Singapore that score highly in these indices.”

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EDGE Certified Foundation

Responsible investment, including Environmental, Social and Governance (ESG) investing, is becoming increasingly mainstream. The last 18 months have seen an exponential increase in the number of institutional investors and funds incorporating various ESG metrics. It’s estimated that in excess of USD 17.5 trillion worth of professionally managed portfolios now include key elements of ESG assessments.

Gender equality, diversity and inclusion sit behind the ‘S’ in ESG and we believe that investing according to ESG principles could be an important accelerator towards equity, diversity and inclusion in the workplace. This is an area where EDGE Certification brings transparency, consistency of metrics and independent verification of a company’s efforts and progress. We asked Lombard Odier Group, Ardian and Equileap to share their thoughts on the importance of ESG and how working with EDGE methodology has brought about positive change for their organizations.

Lombard Odier Group

Lombard Odier has directly seen how a diverse and inclusive workforce fosters creativity and innovation. In our experience, diverse teams, by definition, naturally move away from groupthink and thrive in bringing together independent and opposing ideas. This intangible asset supports our DNA: creating different world perspectives for our clients and ourselves.

Why do you consider gender balance, diversity and inclusion in the workplace and on boards amongst key ESG investment criteria?

“Lombard Odier has directly seen how a diverse and inclusive workforce fosters creativity and innovation. In our experience, diverse teams, by definition, naturally move away from groupthink and thrive in bringing together independent and opposing ideas. This intangible asset supports our DNA: creating different world perspectives for our clients and ourselves.”

Which are the most important factors that could contribute to a large-scale adoption of gender balance, diversity and inclusion in the workplace and on boards as key ESG scoring and reporting indicators?

“Embedding diversity in the everyday culture and strategy of the organization, with the board and senior management setting the tone. This is required to engage employees, create understanding about where the barriers are and to build alternatives that support inclusion. Diverse recruitment and promotion, data monitoring and transparent reporting are also key.”

As a leader who has taken concrete steps toward gender equality, how did EDGE Certification support your organization in its journey towards gender balance, diversity and inclusion?

“The EDGE certification, integrated since 2014 in our strategy of increased gender diversity, helps us to get a clear view of achievements and areas of improvement.”

– Patrick Odier, Senior Managing Partner at Lombard Odier Group

Ardian

Why do you consider gender balance, diversity and inclusion in the workplace and on boards amongst key ESG investment criteria?

“We believe that inclusion and diversity are powerful ways to strengthen organizations. We are convinced that inclusive and diverse companies are more creative, innovative and likely to outperform. Diversity and inclusion are strategic objectives for Ardian and amongst key ESG criteria for our portfolio companies.”

Which are the most important factors that could contribute to a large-scale adoption of gender balance, diversity and inclusion in the workplace and on boards as key ESG scoring and reporting indicators?

“This topic is already at the top of the agenda for companies like Ardian. We don’t want to wait for the legal framework to change to take concrete actions. We need to address consistency and comparability between industries, as well as to work on how to measure not only diversity but also inclusion.”

As a leader who has taken concrete steps toward gender equality, how did EDGE Certification support your organization in its journey towards gender balance, diversity and inclusion?

“Our first EDGE Certification process was key for us as it resulted in the publication of our first inclusion and diversity charter, in which we set concrete and measurable objectives to be reached by 2022. Being in contact with so many organizations gives EDGE a view on best practices, which is very useful.”

– Jérémie Delecourt, Member of the Executive Committee and Head of Corporate and International Development at Ardian

Equileap

Gender equality is a main factor that falls under the ‘social’ category of ESG. Research has clearly shown that companies with an inclusive, gender-balanced and diverse workforce perform better overall and have a more efficient decision-making capacity. But gender equality must be reflected at every level of the company – board, executive, senior management and workforce. We believe all ESG criteria are important and can positively influence each other.

Why do you consider gender balance, diversity and inclusion in the workplace and on boards amongst key ESG investment criteria?

“Gender equality is a main factor that falls under the ‘social’ category of ESG. Research has clearly shown that companies with an inclusive, gender-balanced and diverse workforce perform better overall and have a more efficient decision-making capacity. But gender equality must be reflected at every level of the company – board, executive, senior management and workforce. We believe all ESG criteria are important and can positively influence each other.”

Which are the most important factors that could contribute to a large-scale adoption of gender balance, diversity and inclusion in the workplace and on boards as key ESG scoring and reporting indicators?

“Factor number one is transparency. We cannot change what we cannot measure. We believe companies should publish gender related information and we actually evaluate them on whether they disclose their gender composition throughout the company, their gender pay gap and policies that promote gender equality.”

Why did you decide to include EDGE Certification as a scoring criteria in your index?

“We wanted to include EDGE Certification as one of our scoring criteria because we want to see companies go through a gender audit. The EDGE Certification is a rigorous, independent assessment and a universally applicable methodology.”

– Diana Van Maasdijk, Co-Founder and Chief Executive Officer at Equileap

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EDGE Certified Foundation

Organizations around the world continue to struggle to address a costly gender gap:

• Only 47% of women are in the workforce vs. 74% of men
• Women earn 12% less than men
• Only 28% of managerial positions are held by women
• Only 18% of Chief Executive Officers are women

This gap is even more pronounced for women of colour, part of the LGBTQ+ community and women working with a disability:

• In the US, minority women earn between 38% and 45% less than white men, and between 21% and 30% less than white women
• In the US, only 0.6% of LGBTQ+ women hold vice president roles compared to 1.9% of men; and 0.6% of LGBTQ+ women hold Senior vice president and C-Suite roles compared with 2.9% of men
• In Europe, monthly earnings of both women and men working with a disability are found to be around 5% lower than those working without a disability

Furthermore, pressure is growing from employees, ESG investors, consumers and legislation to close this gap. At EDGE we’re committed to helping organizations transform their workforces by measuring, accelerating, and certifying gender balance and diversity and inclusion. ESG Research strives to collect the most relevant data to drive companies’ sustainability strategies and inform investors of companies’ ESG performance. Diversity and inclusion have become central in assessing the “S” in ESG.

This transformation begins with data. That’s why EDGE and S&P Global are pleased to announce the launch of our first global diversity data availability survey.

The objective of this survey is to capture a global view of company’s data collection practices related to gender identity, race/ethnicity, age, nationality, LGBTQ+, working with a disability, across industries and geographies. The results of this survey will inform both EDGE and S&P’s work supporting organizations around the world assess and benchmark current practices in this field.

Organizations of all sizes and from all countries across the DJSI universe are invited to participate. This voluntary and anonymous survey will be launched on the 2^nd of February 2021 and will stay open for at least 2 weeks.

More information can be found here.

For any questions, please contact:  and .

ABOUT EDGE STRATEGY: EDGE is the leading global assessment methodology and business certification standard for gender equality. Launched at the World Economic Forum in 2011, EDGE has been designed to help organizations not only create an optimal workplace for women and men, but also benefit from it. EDGE stands for Economic Dividends for Gender Equality and is distinguished by its rigor and focus on business impact.

ABOUT S&P GLOBAL: At S&P Global, we don’t give you intelligence — we give you essential intelligence. The essential intelligence you need to make decisions with conviction. We’re the world’s foremost provider of credit ratings, benchmarks and analytics in the global capital and commodity markets, offering deep data and insights on critical business factors including ESG. Our divisions include S&P Global Ratings, S&P Global Market Intelligence, S&P Dow Jones Indices and S&P Global Platts. For more information, visit www.spglobal.com

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Schweizer Illustrierte published a recent interview with Simona Scarpaleggia, the global CEO of EDGE Strategy.

Read the full interview here to learn more about Simona’s mission in her new role as global CEO of EDGE Strategy, why certification is such a powerful tool to enhance gender equality in the workplace and the challenges of balancing career and family.