Can Diversity Help the Economy?
Diversity builds the ecosystem, health, productivity, longevity, and resilience. This has been seen in nature and communities. However, society has often denied itself of these benefits in the past. For a community to have sustainable economic and social systems, it must be diverse and inclusive to all.
Gender and ethnic diversity concerns have grown politically and corporately in the past several decades. Economic inclusion or equal opportunity to participate in the economic life of a community as employers, employees, consumers, and citizen, has become a Sustainable Development Goal by the United Nations.
The first of these goals was created in 2015. It was to “end poverty in all its forms everywhere” and was quickly followed by gender equality.
Achieving diversity is much harder than it seems. Verna Myers, Harvard trained lawyer, entrepreneur, author, and cultural innovator from Baltimore wrote, “Diversity is like inviting people to a party, inclusion is asking them to dance.” However, businesses and companies are striving to promote diversity in their everyday practice.
Sustainability membership group BSR saw that social resilience is a rising corporate concern that puts income and gender inequality on the same level of risk as cyber-security and natural disasters. BSR President and CEO Aron Cramer said Businesses have an increasing stake in helping create “a social contract for the future.”
A few businesses that are participating in creating a more diverse work place include Google, which partners with Howard University to hire black computer science majors in 2017, HP, which diversified its corporate boards and workforce by bringing more women to the executive level in 2017, and Salesforce, whose CEO Marc Benioff spent $3 million to create equal pay for men and women. These companies and many others are becoming more open about their diversity and inclusion initiatives.
These programs help society and the businesses themselves. Public companies in the top 25% for ethnic and racial diversity are 35% more likely to have above-average financial returns, and those in the top 25% for gender diversity are 15% more likely to perform better financially.
Diversity is the way of the future, and many have found that going green is one of the best ways to produce diversity. Around the world, people of color, rural communities and women feel the worst effects of climate change pollution, and some have become climate refugees. Businesses are taking initiative on this. IKEA and the United Nations High Commissioner for Refugees partnered to provide solar panels and biodigesters to refugee camps in the Middle East. “Pay as you save” (PAYS) financing, pioneered by Holmes Hummel uses a tariff structure to provide energy efficiency and renewable power to low-income rural residents at no upfront cost. These low-income communities are the people who suffer most from sustainability crises in a climate-unstable world. For example, four out of five white residents believe that New Orleans had mostly recovered from Hurricane Katrina in 2005, but three out of five blacks believe it hasn’t. To address this gap in thinking New Orleans appointed a chief resilience officer.
Many believe that diversity will lead to new techniques, attract new talent, and ensure sustainable economic growth. JPMorgan Chase invested $900,000 in sustainable infrastructure projects in Detroit. These funds will be used to make vacant spaces between commercial properties available for green infrastructure, which can mitigate storm water drainage fees, and turn vacant land into commercial spaces that support minority-owned businesses.
True diversity adds many benefits to our global society and is why we at C.E. Hutton believe so strongly in helping minority businesses through our business development resources and through real estate, technology, and bio-tech investing.