Our industry is engaged in an important dialogue to improve sustainability through ESG transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.
Diversity and inclusion are both prevalent topics in society in recent years, however, they are not new concepts. The line: “diversity is a fact, inclusion is a choice” is often used to motivate people to achieve the targets of diversity and inclusion. As society is naturally full of diversities that exist amongst people, the aim of social inclusion is to integrate all those differences for a healthier and more equal society.
Hong Kong is one of the most multicultural metropolises in the world, where people from all over the world can develop their business and further their careers. This diverse environment drives Hong Kong’s society to strive for improved social inclusion. According to the United Nations’ Sustainable Development Goals (“SDGs”) – a global blueprint for a more sustainable world by 2030; SDG10 focuses on empowering and promoting the inclusion of all human kinds, by reducing inequality and ensuring no one is left behind. This concept is intertwined with every sector in society, such as government, business, and education. As the city runs as a free economy, enterprises are in the front line for integrating these practices and should take up the obligations that come along with taking the first step. However, according to a survey conducted in 2016 by Hays, the workforce diversity rate (based on nationality) in Hong Kong was 18%. In the same year, there were only 28% of women in management positions. These two statistics fall within the middle range amongst other Asian countries, where Singapore and Malaysia are the frontrunners. These numbers illustrate the need and room for improvement in the workforce in Hong Kong.
The Value of Diversity and Inclusion
Cultivating a diverse and inclusive workplace facilitates improved employee performance. A report from Deloitte found that when employees think their organization is committed to and supportive of diversity and inclusion in the workplace, employees report better business performance in terms of ability to innovate (83% uplift), responsiveness to changing customer needs (31% uplift) and team collaboration (42% uplift). A higher level of diversity in the boardroom also results in positive effects on organizations. Changes in leadership in areas such as gender, age, and industry diversity of managers can increase innovation revenue from 1.5% to 3% within the total team. More diverse management teams reported 19% higher innovation revenue in research conducted by Boston Consulting Group.
Beyond diversity within governance boards, involvement from the management level in making relevant policies is also crucial. This rigorous governance is fundamental for responsible practice. It is of vital importance that the boardroom learns the ropes when it comes to implementing relevant policies and overseeing issues at the company level. Without support from the board, progress on promoting and enhancing diversity and inclusion in the workplace can be stagnant. The role of the board is the cornerstone of this issue, as well as the catalyst.
A Glance at Advocating Actions in Hong Kong and across the Globe
In 2019, Fairwood Holdings Limited (“Fairwood”), one of the largest chain restaurants in Hong Kong, received the Social Capital Builder Award from the government, reflecting its success with diversity and inclusion strategies and its support of accelerating progress towards a more equal society.
Working with a top-down approach, the Board of Fairwood set up holistic policies to secure diversity and inclusion in the workplace, and also signed the Racial Diversity & Inclusion Charter for Employers to strengthen its promise. In the commercial sphere, Fairwood has participated in the Community Investment and Inclusion Fund’s (“CIIF”) project to provide employment opportunities for ethnic minorities since 2010.
Under this clear and exhaustive management approach, Fairwood operates with a solid and firm value of striving towards an equal enterprise. All qualified new immigrants, women, ethnic minorities, and young professionals just entering the workforce are welcome to join Fairwood. This practice brought remarkable change to age diversity in the workplace: the percentage of employees under 30 is 20%, that of the age 30-50 is 48%, and the percentage of age above 51 is 32%.
To enhance gender diversity in the workplace around the globe, 30% Club, an international campaign launched in 2013, took initiative on the issue by empowering women, working toward pursuing the target of at least 30% female representation on all boards and C-suites globally and striving toward a gender balance at all levels in all organizations. It strategically motivated women with the power to make changes in the boardroom and nurture new female future leaders. The campaign expresses that delivering gender diversity in the boardroom leads to better business performance of the company.
Diversity and inclusion are vital to the future development of a company. The benefits of building a diverse and inclusive workplace and corporate board are directly related to innovation and revenue within businesses. Research conducted by McKinsey in 2015 proved that gender diversity provides a competitive edge, with companies in the top quartile for gender or racial and ethnic diversity found more likely to have financial returns above their national industry medians. In other words, businesses would outperform if they have more diverse leadership. The aforementioned cases of Fairwood and 30 % Club show good examples of the embodiment of diversity and inclusion practices in the company at all levels. Apart from contributing to Goal 10 of the UNSDGs, it simply makes good business sense for top management to take diversity and inclusion into account in decision and policy making for their companies.
This article was written by Jenny Li, Assistant Consultant at Allied Environmental Consultants Limited.