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Why I’m excited about the future for racial equality in the workforce

Elena Philipova
Elena Philipova
Director, Sustainable Finance, Data & Analytics, London Stock Exchange Group

At Refinitiv, we have entered into a fantastic new partnership with Fortune to bring needed transparency to racial and ethnic diversity and inclusion practices in the workplace – and elevate racial equality to the top of every corporate agenda. It’s called Measure Up.

Why Measure Up is a game-changer

What gets measured, gets managed. Until companies commit to measuring and disclosing their diversity data, it will be hard to make meaningful progress.

Measure Up tackles a major barrier that continues to permeate social justice and equity in corporate workplaces: the pervasive lack of racial and ethnic diversity. Companies say they are diverse and inclusive, but where is the data?

In a preliminary study, conducted by the Refinitiv Customer Operations Team in mid-2020, of 50 randomly selected Fortune 500 companies, only 28 reported the ‘Overall Employees Race/Ethnicity Composition’ and only five reported the ‘Board Level Race/Ethnicity Group’. Of the 50 global companies (non-U.S.) we studied, only six reported the ‘Overall Employees Race/Ethnicity Group’ and none reported on the ‘Board Level Race/Ethnicity Group’.

To be fair with corporates around the world, it is not only their fault that there is limited consistently measured and reported data. This topic is highly sensitive and personal for employees. Also, data privacy laws in some jurisdictions do not make it easier for companies to measure and manage. And the financial industry lacks clarity and agreement on disclosure standards, making it partially responsible for the current gaps in data.

We see some reference to the topic included in the Sustainable Accounting Standards Board (SASB) materiality map. Canada is leading in this space as the first jurisdiction worldwide to require diversity disclosure beyond gender from corporations governed by the Canada Business Corporations Act (CBCA).

Measure Up is game-changing initiative because it provides a unique opportunity for Fortune 500 companies to measure, contribute and benchmark their racial and ethnic diversity data – a process powered by Refinitiv. It will help companies hold themselves to a higher standard, which in turn will make business, communities and economies better.

I believe this is an important step towards better measures and greater transparency on the topic which is part of the most challenging area of ESG – the Social. And let’s face it – the S is the best kept secret in ESG. We lack clarity around it and progressing this agenda through this impactful partnership with Fortune makes me very excited and optimistic.

How it will work

Measure Up stresses the need for an accurate picture of corporations’ racial composition at all levels of the company, mirroring their existing gender diversity monitoring and reporting. We are encouraging and enabling companies to share minority-related measures of their workforce with their business stakeholders. ​​​​​​​​​​​​​​

Measure Up enables companies to disclose a core list of measures against race and ethnicity factors in addition to other ESG data points. It will encourage companies focused on the diversity and inclusion (D&I) approaches to raise the bar even higher, but also prompt all companies to think more proactively about their inclusion commitments and performance going forward.

With our data-driven insights and access to the Refinitiv ESG Data Contributor Tool, we’re going to help senior leaders at the world’s largest companies. We’ll focus on helping those leaders set transparent goals around inclusion in the workplace, formulate effective strategies and tactics, and track and report performance over time. The aim is to help companies create measurable returns for its stakeholders, including investors and employees.

When the 2021 Fortune 500 list is published in the middle of next year, there will be a new feature: the ability to filter on a company’s self-reported D&I data. Provided by Refinitiv, this feature will sort and rank organizations according to this data and identify the most diverse and racially inclusive companies. Fortune will also produce a 2021 list of the Most Progressive Companies in Racial Inclusion, powered by Refinitiv ESG data.

A powerful partnership

Refinitiv’s core role in the partnership is to provide its strongest assets (data, analytics and technology) as well as its expertise on D&I spanning over 15+ years to guide and support the process. We do not plan to stop there. We will then scale and broaden the impact of this initiative across our full ESG coverage of companies encompassing 10,000 companies and continuously growing.

This week, we are providing and enabling access for the Fortune 500 companies to the Refinitiv technology platform where they will be able to review, update and keep track of their D&I as well as the broader ESG data set.

For its part, Fortune is leveraging its relationships with thousands of companies that have participated in the publishers’ lists and event franchises over its near-100-year history to get those companies to participate in Measure Up.

Social – the missing piece of ESG

Refinitiv has a strong history in ESG and enables the financial industry to integrate sustainability into financial decisions and workflows. We have consistent data coverage since 2002 spanning environmental, social and governance themes.

The S or social in ESG is arguably a lot harder to do – but it is critically important.

That’s why at Refinitiv we’re working with industry partners to emphasize the importance of the S element when making investment decisions. We’re also advancing the guidance for investors and the dialogue towards practical, relevant and comparable social data.

Read the announcement

Where can this take us?

Data is the energy required to power the financial industry, but as critically important as it, it also paves the way to guide transformational societal and economic change.

The ultimate goal is to see this initiative effect change at high levels within companies. There’s a definite interest from business leaders to examine their institution’s own D&I approaches as diversity and inclusion themes are widely discussed in society, but also because having a more diverse staff makes for a stronger business.

An October 2020 survey of Fortune’s CEO panel found that about 95% of those surveyed agreed that diversity and inclusion was a key strategic opportunity for them. It’s a well-documented and acknowledged correlation that more diverse companies have better financial output. The reason for the vast majority of industry leaders coming to conclusion is “quite logical” because companies are nothing without their employees.

When employees are fairly treated, they accelerate the areas of their strengths. People are energized and encouraged to share diverse opinions. That translates to better management, servicing the customers and higher productivity, leading to better financial performance.

Please contribute your minority group data via our ESG Data Contributor tool. To support better trend analysis, we ask for 3 years of data to be submitted and whilst not mandatory, it will give your company the best chance of obtaining an accurate assessment of minority group efforts, commitments and performance.

By contributing your ESG data you can gain a competitive advantage by ensuring the investment world has access to the most timely ESG data on your company.