Food labels are beneficial in two ways: They enable consumers to make fully informed choices regarding their health when buying food and they encourage food manufacturers to strive to make healthier products. If food labels detailed only the healthy ingredients while omitting all the unhealthy components, it would render food labels irrelevant and misleading.
Unfortunately, that is the state of affairs when it comes to corporate America’s Diversity, Equity, and Inclusion reporting. Corporations typically detail only the information that makes the company look good, while significant groups of people are ignored.
For example, there are 61 million people with disabilities in the United States, but only 19.1 percent of them were employed in 2021. The few companies that provide any such data employ a mere quarter of the percentage of people with disabilities in the overall population.
Accurate corporate DE&I reports could benefit society in two important ways: They would enable consumers to make fully informed choices by clearly showing which brands have better DE&I practices, which, in turn, would encourage corporations to enhance their DE&I recruiting efforts.
Corporate America would argue that DE&I is enjoying more of a spotlight than ever before: Companies now have DE&I officers, many corporations claim equality as a core value, and companies’ public talk regarding DE&I is robust, copious, and decisive: “Diversity, equity and inclusion are at the heart of our values and our growth strategy,” or “Inclusion is imperative for the health of our business and our society.”
Unfortunately, a closer look at some objective data from the past few years can demonstrate the chasm between corporations’ DE&I reports and their actual outcomes.
Despite Google and Microsoft being among the world leaders in DE&I efforts, investment, and reporting, their Black and Latinx tech staff has gone up less than 1 percent since 2014.
A 2018 report from the Prison Policy Initiative found that the unemployment rate for formerly incarcerated people, 24 million Americans, is nearly five times higher than the unemployment rate for the general US population. Twenty-four million American adults are practically excluded from corporate America and fully excluded from their diversity reports.
Gender wage parity in the United States is currently 18 percent, and yet 719 of the 922 largest public companies in the United States haven’t conducted a gender wage parity survey in the past five years. And sadly, there are fewer women among chief executives of Fortune 500 companies than there are men named John.
And yet there is potential to create real gains in DE&I because of a major shift in public opinion regarding the importance of fair practices in the workplace: The 2018 Edelman Earned Brand Global found that 47 percent of consumers in the United States were belief-driven buyers, meaning that “they choose, switch, avoid, or boycott a brand based on its stand on social issues.” One year later, in 2019, the number of belief-driven buyers in the United States rose to 59 percent, and similar trends are underway in many other countries.
Consumers should use their buying power to encourage corporations to adopt diversity labels — easy-to-find labels that provide clear percentages of employees and senior management from all relevant groups in the population, as well as equity metrics like wage parities. The corporation could then utilize its resources to make sure that it is proud of its label’s content, while setting a dramatic global corporate benchmark for other corporations to follow.
Diversity labels could enable 24 million formally incarcerated people plus their loved ones to purchase products and services from companies that tend to employ and promote ex-cons. The same is true of people with disabilities and anyone who prefers to offer their patronage to companies that pay fully equal wages regardless of gender.
Consumer power can also encourage political leaders to require a standardized diversity label by law, providing clear inclusion numbers and percentages, as well as equity metrics like wage parities.
Diversity labels will enable consumers and voters to wield their massive collective power to effectively hold companies accountable for actual DE&I outcomes. The inevitable compliance of companies and lawmakers will lay the groundwork for social justice in our workplaces to at last become a reality.
Gil Winch is founder of CY and author of “Winning with Underdogs.”