ESG: Why inclusion matters - even for astronauts
Investors should look for evidence of inclusion right across a business - even in product design, says Regnan's head of engagement ALISON EWINGS
IN 2019, NASA planned one small step for women: the first all-female space walk from the International Space Station. But it did not go as planned.
The problem? There weren't enough medium-sized space suits to go around.
"Truly inclusive decision-making goes beyond the workplace," says Regnan's head of engagement, Alison Ewings.
"By broadening the approach to consider customers and society at large, you're more likely to have products and services that meet the needs of a wider range of people."
Ewings says it is not uncommon for products and services to be designed without proper consideration of inclusion.
"We're seeing companies talk about their experience of employing more women only to come across things like no availability of uniforms suitable to be worn when you're pregnant.
"We've seen personal protective equipment the wrong size for women. We've seen machinery that cannot be operated by people under a certain height.
"These are product and service decisions made well before a company discusses how to implement a diversity and inclusion program."
Beyond employee experience
Taking inclusion beyond the day-to-day employee experience is an important insight for investors.
"Can the impact you have be improved by thinking about how you deliver that more inclusively?" says Ewings.
"So, if you're a health company, who are you including in your trials?
"For an education provider - if you can reach a broader audience in a developing country, the impact of what you can do about changing those people's lives is far more significant if you approach the delivery of your product and service with an inclusion lens.
All companies can benefit from taking an inclusion approach to product and service design, says Ewings.
"It can be simple things like supermarkets offering quiet hours for people with autism or older people who find loud noises and bright lights an overwhelming experience."
And while diversity has been the watchword for businesses seeking to bring broader talent into an organisation, research shows equity and inclusion are the critical factors in realising the performance potential of a diverse workforce.
Regnan's award-shortlisted research report Beyond diversity: Equity and inclusion as an overlooked opportunity for investors (PDF) found that a focus on diversity without equity and inclusion can undermine the very benefits offered by diversity.
Three inclusion factors
Regnan's research outlines three inclusion factors that investors should take account of when assessing companies:
The benefits of focusing on equity and inclusion within the workplace is equally relevant to the experience of customers and the broader community and is therefore of interest to impact investors, says Ewings.
"A true focus on inclusion thinks about what it means for decisions that these organisations make and the products and services that they offer."
Organisations that embrace equity and inclusion can apply these skills to their core operations unlocking opportunities to positively impact a wider constituency, and potentially with greater potency.
A more intentionally inclusive approach to problem solving also enhances the pool of ideas for how to tackle major societal challenges, she says.
Author: Alison Ewings, Head of Engagement, Regnan. Regnan is a Pendal Group business.
Funds operated by this manager:Pendal Focus Australian Share Fund, Pendal Global Select Fund - Class R, Pendal Horizon Sustainable Australian Share Fund, Pendal MicroCap Opportunities Fund, Pendal Sustainable Australian Fixed Interest Fund - Class R, Regnan Global Equity Impact Solutions Fund - Class R, Regnan Credit Impact Trust Fund
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