Diversity will enable climate innovation and resilience

There are strong cases for organizational Equality, Diversity and Inclusivity (EDI) and action on climate change. Diverse and inclusive cultures bring about ideas, effective problem solving and, ultimately, greater chances of success.  Built environment leaders must be proactive and decisive in driving the EDI agenda across the sector if we are to bring forward more effective climate solutions.  

The business case for diversity in problem solving and decision making has been made. There is a multitude of reference points to draw upon which reinforce the link between a diverse cultural and a company’s financial performance and growth. These include this year’s piece from Harvard and the Mckinsey 2018 report which suggest that organizations pushing on Equality, Diversity and Inclusivity (EDI) are more profitable; up to 33% more than the typical market player in some cases.

This healthy advantage can be put down to a range of business benefits including:

• More easily attracting, and retaining staff – competition for the best talent is fierce and a 2014 Glassdoor survey of 1,000 job seekers found that 67% considered workforce diversity when evaluating an offer.

• A stronger, more responsible market identity – there is evidence relating diverse boards, which are typically less likely to take uncalculated financial risks, to significantly lower return volatility.

• The creation and effective deployment of more innovative ideas and solutions – one of the strongest arguments for embedding an EDI culture as the modus operandi i.e. creating a place where healthy disagreement and debate builds consensus through diverse ideas and challenges to established thinking. Which in turn leads to innovative, inclusive and, ultimately, more effective decisions.

Arguably, the business case for action on climate change has also been made.  If the rhetoric of Extinction Rebellion doesn’t speak to you, then perhaps the suggestion of $26 trillion being unlocked from a greener economy might? Then there is the 2018 IPCC (Intergovernmental Panel on Climate Change) report.  This makes clear that unprecedented global weather trends and severe localized events are to be the new norm and pose significant risks to our economy (in the billions of pounds worth), to our society and to our life on earth.

Consequently, we must not underestimate the need for, or benefits to be had from, decisive action on climate change. Neither should business leaders overlook the value of EDI in better decision making and in the implementation of effective innovation.

As you may already see, there are connections between the EDI agenda and solutions for the major challenges society faces today. However, too often these connections are not made – EDI as a requisite for effective action on climate change mitigation and resilience being one quite stark example. Climate change mitigation means to limit the magnitude or rate of long-term global warming, whereas climate change resilience means to anticipate and prepare for climate related risks, two of the biggest challenges we currently face.

As a start at unpacking this connection, we should look back on the unfolding of the COP 21 discussions.  One of the event’s stand out quotes for me is still that from Mary Robinson (former UN Human Rights Chief and Ireland’s first female president) who shone a light on what was a predominantly male line-up of leading ministers by stating:

“If you don’t have women here, how can you say this is about people?”

Mary Robinson

Given that the global gender split is approximately 50.4% male and 49.6% female, she makes a good point. The relationship between diverse representation and effective decisions can also be seen within the UN Sustainable Development Goals.  Goal 5 (of 17) champions the need for global gender equality and is recognized as being integral to achieving all other aspects of sustainability:

“In short, all the SDGs depend on the achievement of Goal 5”

UN Women

These arguments may appear to stem from a sound ethical cause however they do have research underpinnings.  In particular, a 2017 study found a positive link between more gender-diverse boardrooms, an increased level of carbon disclosure reporting, and better direct carbon emission performance.  There are other examples, with some good reads being available from the Women’s Environment and Development Organisation.

To bring this into the context of the built environment, if urban development and investment decisions relating to climate action do not truly reflect the needs of all their stakeholders, they are unlikely to deliver on resilience.  This is not just a missed financial opportunity but actually threatens the stability of the sector if funds end up being ploughed into assets at risk of becoming stranded in the future. 

Market leaders already taking action to mitigate this include BlackRock (the world’s largest asset manager) and L&G (a trillion pound investor). Both have called out organizations with low female board representation and publicly stated their EDI expectations of the companies that they are willing to invest in.  L&G more explicitly make the link between gender diversity, better decision making and the need for climate action.  Both overtly recognize the value in EDI and diversified decision making.

Despite this, however, there is still some way for the built environment sector to go on delivering on EDI and having an increased chance, therefore, of effective action on climate change.

The 2018 US survey from Sheryl Sandberg’s ‘Lean In’ movement and Mckinsey found that women still remain significantly underrepresented in senior roles across most sectors with approximately 1 in 5 being women and only 1 in 25 being women of color. This translates almost directly into US property management and investment.  The pipeline charts below show that typical board rooms in this sector are made up of 81% men and 19% women, against an average 78% and 22% split in favor of men across all sectors.

The same patterns can be seen in the EU and in other sectors. The proportion of women on the boards of Europe’s listed real estate companies was 28% as of 2017. The situations in the transport and energy sectors are lower still with just 17.5% of senior roles in EU transport, and 20-25% of senior roles across the energy sector globally being held by women.

The challenges of the EDI agenda are complex.  However, the age-old arguments of ‘women not wanting to work in STEM sectors’ (entry level roles are relatively equal across the board) and ‘women would rather raise families’ no longer stand. 

Instead, studies are suggesting that an innate and unconscious bias is more likely to be behind the lack of female representation at senior levels, with women being less likely to be promoted (despite their qualifications and experience) than men. This can be described in several ways from ‘boys club’ type cultures to the ‘performance bias’ (in which women are typically judged by their track record but men on their potential). Microaggression is seen as another cause of women leaving the industry (aka casual sexism). This doesn’t just impact women but also men who do not identify with typical male personas or stereotypes (if you haven’t already seen it, the Gillette advertisement does a good job unpacking this).

These may feel like uncomfortable subjects however business leaders should not be hesitant; the stakes are high and the opportunities significant. 

How do we embed EDI throughout our organization and sector? (I hope you’re now asking yourself). 

There isn’t an exact recipe and it is not a numbers game. However diverse organizations have an equal and/or significant proportion of women, and a mixed ethnic and social composition within their leadership and decision-making forums.  This must form a part of a wider, integrated EDI agenda and culture.  If women and other cultural/ethnic groups are not treated as equal, and don’t feel safe to articulate their ideas, then organizations will fail to unlock EDI’s true potential and find themselves sitting in camp ‘tokenism’.  EDI must be delivered through a comprehensive business strategy that speaks to the individual, permeates throughout organizational divisions and which influences third-party/partners’ decision making.

There is a wealth of guidance available including a comprehensive piece from the UK Governments Equalities department and the aforementioned McKinsey report. However, these can be difficult to digest in one sitting and it is likely more helpful to initially focus on a few measures which have the strongest potential impact. Although these will vary by company, at the Building Research Establishment (BRE)  we are channeling energies into an action plan which covers both our actions and our products:

At the individual scale:

• Raising self-awareness – deploying coaching and awareness programs that help individuals understand biases, speak up ideas and welcome constructive challenges from peers (as uncomfortable as this may be at first). This can help foster inclusivity and belonging, and ensure that different voices are informing decision making.

• Identifying individual (and collective) strengths – linked to the above, Clifton Strengths (there are other models) helps foster a deeper understanding of individuals’ unique talents, and the recognition of said strengths from peer to peer.  This can improve dialogue, working relationships and confidence, and also feed into the selection of teams based upon talent and aptitude (rather than nepotism or supposition).

• Supporting role models –  A board-level sponsor can drive the cultural changes needed from the top and support those individuals willing and/or acting as role models.

Throughout the organization:  

• Championing flexible working – there is a range of policies needed to embed EDI; however, a solid stance on supporting flexible working is recognized by far as being critical to success. Not only is flexible working increasingly expected by millennials, but those with dependants (often women but increasingly men) cannot operate at their best if they feel torn between their home and work-life responsibilities.

• Reforming recruitment practices – using gender-neutral language in advertisements, having diverse interview panels and pushing for a gender balance on shortlists helps to attract and secure applicants from a broader, more diverse talent pool.

• Increasing EDI visibility – supporting women’s and other EDI staff networks, events and endeavors, and ensuring that organizational communications clearly articulate the direction of travel and intent to existing and prospective employees.

As market influencers:

• Supporting the wider talent pool – actively engaging with, and supporting industry EDI initiatives such as awards, training and ‘returnships’ helps connect mentors with mentees and build the local talent pool. BRE’s internal Women’s Network partners on events and hosts EDI networks at our Innovation Parks to share knowledge and support debate (the next tour being on the 3^rd Sep 2019 with Women in Property).
• Necessitating EDI through supply chains and wider networks – procurement policies should set out our requirements relating to EDI.  Client power, like BlackRock’s and L&G’s, pushing for better sector representation helps create a broader, stronger mandate for change.

• Championing EDI throughout the design and procurement of the built environment – ultimately places must work for people; all people. Sustainability certification schemes; BREEAM for Communities and CEEQUAL include criteria relating to stakeholder engagement, inclusive design, responsible sourcing and, more recently, modern slavery. Places and infrastructure designed and built to these schemes will have embedded climate resilience measures derived through responsible procurement policies, and rigorous and inclusive forms of public consultation and engagement (thus increasing the chances of their success).

To conclude, the diversity of thinking leads to robust and more widely appropriate and accepted solutions and innovations. It lowers risk and increases the chances of ultimate success.  Against this, urgent and more effective action on climate change is needed.   The agendas of EDI and climate change are interlinked; successfully tackling the latter is dependent on the former.  There are immediate measures that business leaders can take to drive EDI both within their organizations and across the sector. Built environment leaders cannot afford to ignore or be timid towards EDI if the sector is to respond to the climate challenge. 

This article was written by Charlene Clear, Head of Products & Services at BREEAM, BRE