Social Governance

DE&I Metrics Help Hold Companies Accountable

Published on: 26 May 2022 07:00 AM
by KnowESG

The importance of diversity, equity, and inclusion for corporations didn't start with the murder of George Floyd in May 2020, although it was after that incident that demand by employees, customers, and other stakeholders for DE&I transparency increased. Several companies began to make DE&I pledges, and many started to share their DE&I data publicly, often as part of their environmental, social, and governance (ESG) reports.

A few companies, including Hilton Worldwide, Marriott International, and United Airlines, have tied executive and some manager-level compensation to DE&I results. Hyatt Hotels began that practice in 2017, but in 2020 "enhanced the weighting of DE&I in the corporate annual incentive plan by asking all incentive-eligible colleagues to create measurable individual goals focused on DE&I," Hyatt global VP of diversity, equity and inclusion Tyronne Stoudemire wrote in an email. In addition, the company linked executive stock compensation to its progress on DE&I, specifically its commitments in terms of who Hyatt hires and promotes.

"In the last two years, we started to openly talk about data in a disaggregated and transparent way," said Delta Air Lines VP and chief diversity, equity, and inclusion officer Keyra Lynn Johnson. "People want to know better the brands they engage with. One way is to not just share commitment-making but also the real specific actions to meet those commitments. We felt the best way to meet those was to be even more transparent with our data."

There are also business benefits to DE&I information. According to a spring 2022 Harvard Business Review report, attention to DE & I can enhance a company's products and services, its public image, and its profits.

"We see in general, as we look at the research, that more diverse companies perform better, with profitability and customer service scores," said American Airlines managing director of global DE&I Kevin Williams. "For our business, one thing we see is that having a more diverse workforce does impact customer sentiments" and can help to reduce friction. "We work with the customer service team to see if there is anything we can do to support them from a DE&I perspective and to make sure leadership is reflective of team members."

BTN reached out to several travel suppliers to discuss their DE&I data, what buyers are looking for regarding it, and how they are addressing gaps in representation. While all those approaches have some type of DE&I programme, getting them to discuss what is behind their metrics was a challenge, with United – which is being sued by a former diversity manager over discrimination – declining to be interviewed. Others spoke only on a surface level, sharing platitudes like, "DE&I is in our DNA."

Travel buyer DE&I demand

Some suppliers, however, were upfront with where they stood and how much work remained to be done. "DE&I is a journey," said a few. Those are the suppliers that could benefit from their transparency because, in our BTN survey of travel buyers, 41 per cent of 163 respondents said their organisations already assess the DE&I goals and initiatives of potential travel suppliers in their sourcing processes. Further, 21 per cent of 96 respondents noted their companies planned to do the same starting within the next 12 months.

The top three types of suppliers assessed were airlines, hotels, and travel management companies. Almost one in three respondents said they awarded business to suppliers because their DE&I strategies were a differentiator when other offerings were comparable. About 16 per cent have ruled out suppliers due to incompatibility with their own organisation's DE&I strategies. Still, nearly one in three respondents did not have any supplier partnership selections based on DE&I efforts.

Source: BTN Europe

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