The Future of Diversity, Equity, and Inclusion in 2022

1. ESG Services WHITEPAPER Driving the Future of Diversity, Equity, and Inclusion in 2022 The Evolution of DEI: The Rising Significance of Diversity, Equity, and Inclusion in an Organization

2. Driving the Future of Diversity, Equity, and Inclusion in 2022 Introduction The COVID-19 pandemic, hybrid work model, and the global social justice movement have changed today’s business context and modified the strategies industry leaders must enforce to drive diversity, equity, and inclusion (DEI) in their organizational operations. Leaders are now identifying and navigating these changes effectively to drive the DEI agenda into the mainstream. Diversity fuels creative insights, equity unlocks possibility, and inclusion drives growth and innovation to power future markets. This helps ensure that the employees are empowered to bring their most productive selves to work. Creating and supporting a work culture based on integrity, respect, community, and trust encourages employees to contribute to their full potential and deliver their best. It also helps in delivering on purpose, thus establishing a better work environment that delivers exemplary goals. With a DEI strategy in place, businesses can also strive to better reflect and serve the communities as well as advocate for greater opportunities for all. Starting a conversation for a meaningful change The business case for equality, diversity, and inclusion is growing stronger. An organization with a diverse workforce can better serve the requirements of its customers as well as attract the best talent that feels valued and appreciated. All these factors, some less measurable than others, can lead to people feeling safe, supported, and empowered to perform and accomplish their best work, impacting the bottom line of an organization significantly. Figure 1: Business cases for gender equality, diversity, and inclusion $12tn in additional GDP $2bn in potential revenue 160m women If gender gap is narrowed by 2025 If financial inclusion efforts broaden services for black Americans May need to change jobs through 2030 due to automation 2

3. Driving the Future of Diversity, Equity, and Inclusion in 2022 The DEI collection helps to identify and examine the barriers that can assist companies in addressing gender and racial equality, along with identifying the solutions to build a stronger and more inclusive workforce. With the right DEI landscape, businesses can • Track communication practices, and other metrics employers’ use of training, incentives, Organizations that have attained maturity in gender parity are moving ahead and addressing broader issues concerning diversity and inclusion, including socioeconomic origins and culture, educational levels, work experience, and disabilities. Organizations in countries including the United Kingdom and the United States have designed guidelines to assess all forms of diversity. • Incorporate program maturity levels and equitable pay • Measure the key DEI initiatives developed along with judging the strategies based on their effectiveness Strategies driving the cause Today, organizations lack mature and effective DEI programs. Current DEI strategies that most businesses are employing struggle to balance the diverse and complicated needs of the workforce to deliver impactful events that drive meaningful change in workforces as well as society. However, the ones that do have successful DEI programs tend to share a wide range of characteristics and practices. For the DEI strategies to perform well, organizations need to comprehensively define and work on incorporating these plans of action. DEI leaders must now be able to distinguish their organizations by designing and executing approaches to foster diverse and inclusive work environments. By reinforcing and embedding DEI behaviors within the existing talent and business processes, organizations can evaluate their DEI efforts and initiatives. Figure 2: The equity imperative Spheres of Influerce Community Impact and partnership Society Products and services Standards and policy Marketing and sales Marketplace Ecosystems and alliances Supply Chain Access Workforce Enablement Advancement Enablers and organizational culture Denotes the activators within each sphere of influence 3

4. Driving the Future of Diversity, Equity, and Inclusion in 2022 Revitalizing the vision for DEI The DEI issues have presented different challenges over the years but have similar roots in various industries. The coronavirus pandemic also upended many social and business norms, thereby exposing pre-existing social and health disparities along with the exacerbated disadvantages faced by the employees. For example, tech, developed by cisgender white men (the largest demographic in tech), often cannot identify and address the specific requirements of those outside the demographics. Due to these recent events, even shareholders and investors are escalating the call for establishing more attention-driven reporting concerning the non- financial measures of success, inclusive of DEI and the environmental, social, and governance (ESG) criteria. This rallying cry to diversify organizations has sounded for years. But now is the time for business leaders to stop, listen, learn, and act. For businesses that are new to the scene of DEI, it is vital to understand that previously, the best way to increase DEI within a company was to work exclusively on hiring diverse talent. Hiring diverse talent, however, depends on the company’s understanding of its ideal version of diversity. Many businesses are becoming mindful of the benefits of pursuing aggressive DEI strategies. DEI is quickly becoming a top business imperative for companies to create a more diverse organization and a more equitable as well as inclusive society. Thus, organizations are contributing to real progress through the elimination of disparities within their walls by embedding social justice in their work culture. But with the worldwide reckoning around racial injustice, many organizations are taking action to engage with social issues that organizations often ignore. These include conversations related to racial and ethnic injustices, polarizing themes that overlap with DEI. However, the revitalization of the DEI vision requires a holistic approach that surrounds all the stakeholders and the underrepresented groups and business processes. socioeconomic disparities, and other A holistic approach to create a DEI-driven business culture A) Embracing a holistic approach the impact on consumers, governments, and other corporations, as well as civil society. Historically, DEI was a siloed approach. It was perceived as a people strategy driven by the Chief Human Resources Officer (CHRO) or Chief Development Officer (CDO), focused on a singular aspect of diversity, e.g., women, and more recently, in certain countries, race/ ethnicity. However, DEI’s environment and broader business imperative are now driving a more expansive definition. Next, organizations must embrace the unique experience of all the underrepresented communities in a holistic way. A comprehensive strategy will enable businesses to cover a global workforce that is ethnically, economically, educationally, and cognitively diverse. B) Designing an impactful DEI strategy Embedding DEI into an organization requires a holistic view. Organizations must first recognize and treat DEI as a strategic business imperative. CEOs must drive the endeavor and be accountable to the stakeholders. A DEI strategy cannot be a stand-alone side project; it should be integrated into all the business processes. Organizations can bring about this change by maintaining supplier diversity, establishing inclusive marketing campaigns, or embracing technology that fosters equitable work opportunities. With a genuinely holistic approach, organizations can include both internal as well as external strategies to evaluate For organizations to build on their strategy and actions, they must be mindful of the fact that the most impactful strategies require progress on all three tenets of DEI: diversity, equity, and inclusion. 1. With a diverse environment, organizations can welcome perspectives and experiences from myriad differences, such as background, race, ethnicity, gender, age, disability/ability, and religion, along with sexual orientation. 4

5. Driving the Future of Diversity, Equity, and Inclusion in 2022 2. An equitable environment will help in establishing an environment with no disparities in opportunities for advancement, experiences, access to key roles, rewards, and development opportunities. that accommodations for individuals with mobility and sensory impairments. are disability-inclusive with reasonable While making advancements on the DEI front with a holistic approach, the goal should be to improve the existing DEI framework as well as make significant contributions to establishing an inclusive society. 3. By cultivating an inclusive environment, businesses can offer their people a sense of belonging, along with providing systems that encourage them to share as well as participate in the decision-making process. It will also help in establishing workplaces Figure 3: Inclusive workforce Gender & gender expression Sexual orientation Mental and physical abilities Age and generation Appearence Level of health INCLUSIVE WORKFORCE Incom,education & socio- economic status Personality traits and behaviours Social origin & parental Background Race, ethnicity and religion Location (for example, rural or urban) Language and nationality Designing an impactful workforce DEI strategy Diverse, equitable, and inclusive organizations are perceived as more innovative and successful due to the different standpoints they bring to the table. Organizations are now feeling the need to invest in DEI not only because it is the right thing to do but also because that is how they will create success in the future. While every organization has a diverse set of governing regulations, there are certain underlying commonalities that all companies should address. The following tips can assist enterprises in creating a winning DEI strategy: 1. Planning an actionable strategy Specificity is the key to achieving a goal. Structuring an actionable DEI plan that is specific and actionable will assist businesses in categorizing their priorities and setting goals with clear objectives and corresponding action steps. But one question that still lingers is: What does a DEI strategy look like? 5

6. Driving the Future of Diversity, Equity, and Inclusion in 2022 2. Employing measurable metrics 5. Shifting the focus from hiring to other critical elements A strategy that cannot be measured is like aiming for a wild guess. Businesses need to incorporate measurable metrics to consider hiring and employee demographics, employee surveys, offboarding interviews, promotion rates/demographics, and retention. 3. Communication is the key Earlier, the top priority for many companies was to hire a more diverse workforce. However, with the shifting priorities, businesses need to establish clear strategic planning for DEI in all company areas. 6. Acquiring employee feedback At the outset of strategic planning and periodic intervals, businesses should reach out to their employees for feedback through surveys and informal or formal discussions. After all, the DEI strategic plan is created for them. 7. Cultivating an inclusive culture Irrespective of how impressive a strategic plan is on paper; it will never work unless everyone in the organization is invested in the desired outcome. By establishing consistent and clear communication across all formal and informal channels, enterprises can bring in the required change for success. 4. Starting with what’s already in place It is vital to cultivate a culture of DEI beyond policies and procedures. A company’s culture is a living and breathing entity that requires consistent nurturing and care for the employees to flourish. Cultivating a flourishing DEI culture demands compassion, vulnerability, empathy, kindness, and difficult conversations. Examining the existing policies, compensations, benefits, processes, tools, and accommodations is important, and then setting up a system to identify what is left out of these. Top global organizations with the best DEI culture 6

7. Driving the Future of Diversity, Equity, and Inclusion in 2022 Moving ahead: building an inclusive future DEI is a business-wide issue that can have a significant impact. This calls for leaders to understand and engage in DEI efforts to the same degree as any other strategic imperative. By integrating DEI into policies, practices, and influence their employees’ daily experience with the right structures in place, thereby driving an inclusive culture. By setting goals, measuring progress, and sharing transparently, organizations can apply a DEI lens to their processes and policies, from inclusive benefits and grievance to reskilling initiatives to achieve and sustain success. programs, organizations can meaningfully Furthermore, as they continue to grow and change — individually, nationally, as well as globally — how will they be able to meet the new challenges of the day without DEI strategies and stewards in place to guide them? With paradigm shifting, businesses need to understand that DEI is not a finite project with a destination but a journey. Many companies envision achieving their DEI goals in two years or within the next five years. But how can an organization completely undo its decades of inequity and exclusion traditions in just a couple of years? With DEI gaining significance, it is vital to understand that a DEI strategy is not just some project that needs to be checked from a list. It is a way of existing and operating in a world that demands strategy, planning, and commitment. 7

8. Driving the Future of Diversity, Equity, and Inclusion in 2022 Disclaimer This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by SG Analytics (SGA) and is not intended to represent or get commercially benefited from it or imply the existence of an association between SGA and the lawful owners of such trademarks. Information regarding third-party products, services, and organizations was obtained from publicly available sources, and SGA cannot confirm the accuracy or reliability of such sources or information. Its inclusion does not imply an endorsement by or of any third party. Copyright © 2022 SG Analytics Pvt. Ltd. www.sganalytics.com GET IN TOUCH New York | Seattle | San Francisco | Austin | London | Zurich | Pune | Hyderabad | Bengaluru 8