Can climate change action lead to better inclusion?

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Cindy Hook, Chief Executive Officer, Asia-Pacific, Deloitte

• The climate transition will affect the lives of billions of people. The most economically and socially marginalized are likely to be the most impacted.
• There is huge potential – and a huge responsibility – to address underlying social inequalities as companies address climate change.
• Organizations should consider who is making decisions, what their end goals are and whether their transformations will help or hinder equity and inclusion.

From Beijing to London, Stockholm to Tokyo and Paris to Seoul, government and business leaders are responding to climate change by making momentous decisions that will transform their business strategies and practices. As leaders seek to address the issues of climate change, this is the time to take a holistic view that also considers diversity and inclusion principles.

There are compelling reasons to make the link between these significant but traditionally separate areas of debate. Considering climate change, diversity and inclusion together can lead to better decision-making and improve outcomes for marginalized groups. It also recognizes that there is an opportunity to address more than the climate as organizations and business practices are fundamentally reinvented.

Making better decisions

Tackling climate change may be the most complex challenge CEOs face this century. We also know organizations are often most effective at resolving such challenges and delivering breakthrough solutions when their problem-solving process includes a diverse range of views and voices. The solutions they arrive at are also more likely to cater to – and be well received by – a wider range of stakeholders.

Deloitte discussed these themes in The Diversity and Inclusion Revolution in 2018. There have also been many well-regarded articles published discussing the value of diversity in decision-making.

An example is Why Diverse Teams are Smarter by David Rock and Heidi Grant in the Harvard Business Review, which said: “Striving to increase workplace diversity is not an empty slogan — it is a good business decision”.

Rock and Grant also cited global analysis by Credit Suisse showing that organizations with at least one female board member delivered a higher return on equity and higher net income growth than those with male-only boards.

What’s the World Economic Forum doing about diversity, equity and inclusion?

The COVID-19 pandemic and recent social and political unrest have created a profound sense of urgency for companies to actively work to tackle inequity.

The Forum’s work on Diversity, Equality, Inclusion and Social Justice is driven by the New Economy and Society Platform, which is focused on building prosperous, inclusive and just economies and societies. In addition to its work on economic growth, revival and transformation, work, wages and job creation, and education, skills and learning, the Platform takes an integrated and holistic approach to diversity, equity, inclusion and social justice, and aims to tackle exclusion, bias and discrimination related to race, gender, ability, sexual orientation and all other forms of human diversity.

The Platform produces data, standards and insights, such as the Global Gender Gap Report and the Diversity, Equity and Inclusion 4.0 Toolkit, and drives or supports action initiatives, such as Partnering for Racial Justice in Business, The Valuable 500 – Closing the Disability Inclusion Gap, Hardwiring Gender Parity in the Future of Work, Closing the Gender Gap Country Accelerators, the Partnership for Global LGBTI Equality, the Community of Chief Diversity and Inclusion Officers and the Global Future Council on Equity and Social Justice.

Easing the burden

The climate crisis is disproportionately impacting those who are already economically and socially marginalized, particularly in Asia.

Half of the population in Asia, where I am based, live in low-lying coastal areas, making them particularly vulnerable to storms and inundation. This amounts to 2.4 billion people in a region where43,000 people a year already die in storms, floods and landslides.

The United Nations has also estimated that 80% of people displaced by climate change are women – showing how climate change can exacerbate inequality among groups that are already more likely to experience poverty.

Despite this disproportionate impact, the average representation of women in national and global climate negotiating bodies is below 30%.

Women’s voices are also underrepresented in the boardroom. Deloitte hasfound that only 16.9% of corporate board seats globally were held by women in 2019. The figure was just 9.3% in Asia, further highlighting the need for women to have greater representation in climate decision-making.

Developing solutions to address climate change with a diversity and inclusion mindset offers the potential to more effectively solve both business and societal issues. This more holistic approach to climate action is being discussed in policy spheres, including at the World Economic Forum, in terms of a “just transition”. Such a transition to a lower-carbon future also considers social and economic implications.

These principles are also embedded in the 2015 Paris Agreement on climate change, which asks parties to consider diversity and inclusion by stating that they should:

“… respect, promote and consider their respective obligations on human rights, the right to health, the rights of indigenous peoples, local communities, migrants, children, persons with disabilities and people in vulnerable situations and the right to development, as well as gender equality, empowerment of women and intergenerational equity.”

— Paris Agreement

Embracing the opportunity

The scale of the change needed to address the climate crisis requires a departure from “business as usual”. Government and business leaders have a unique opportunity – and a responsibility – to build back better as they create a more climate-resilient future.

As Rahm Emanuel, then Chief of Staff to US President Barack Obama, toldThe Wall Street Journal during the global financial crisis: “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.”

More and more governments and businesses are announcing ambitious plans to address climate change and to move towards net-zero or even negative carbon emissions. The leaders of China, Denmark, France, Hungary, Japan, New Zealand, South Korea, Sweden and the United Kingdom have all made significant, time-bound commitments to reach net-zero emissions – meaning a balance between the emissions they produce and remove from the atmosphere.

Encouragingly, a number of these plans incorporate “just transition” principles to ensure fairness and equity are considered. The European Green Deal, for example, sets out plans for a climate-neutral and zero-pollution transformation while aiming for a just transition that “leaves no one behind”. South Korea has announced similar aspirations in its Green New Deal.

These announcements are inspiring leading businesses to follow suit, and in many cases, to move faster than governments. Global organizations including BHP, Shell, Tata and Unilever have announced a range ofdecarbonization and net-zero plans.

Deloitte has also made anet-zero commitment that will affect the firm’s geographies globally, which is an important principle in climate responses.

To succeed, these commitments will require the large-scale transformation of industries and societies. As boards, executive teams and individuals gather to turn net zero into reality, there is a huge opportunity to improve society along with the climate. One of the first steps to integrating climate, diversity and inclusion is ensuring a wide range of voices are heard.