European companies dominate most-diverse rankings
US firms Gap and Bristol-Myers Squibb are the only non-European companies to make the top 10 in a list of the most diverse and inclusive companies in the world. European companies dominate Thomson Reuters’ Diversity and Inclusion (D&I) Index, with Accenture, Novartis and Medtronic taking the top spots – although Medtronic’s operational headquarters are in Minneapolis, Minnesota.
Thomson Reuters says investors are increasingly looking at how companies perform on D&I metrics as a screen for potential long-term performance. As such, the company launched the D&I Index in 2016 to track companies with the most diverse and inclusive workplaces.
The index considers 24 metrics across four categories: diversity, inclusion, people development and news controversies. It is then calculated based on each metric’s importance in the market and how each company compares to its peers.
‘The industry is beginning to recognize the societal and business benefit of investing in diverse and inclusive companies and we are working closely with various investment firms that are looking to develop investable products based on our D&I index,’ Elena Philipova, global head of ESG at Thomson Reuters’ financial and risk division, says in a statement.
Virginie O’Shea, research director at Aite Group, agrees, saying that investor demand for meaningful diversity and inclusion information will only intensify in Europe following the introduction of the second Shareholder Rights Directive in 2019.
‘Not only have firms been increasing their corporate disclosure with the intent of improving corporate governance and transparency, but regulators have also been compelling change [through the Shareholder Rights Directive],’ she says. ‘Investors are keen to see much more data related to topics such as diversity to factor into their ESG strategies.’
Based on the D&I Index, a company’s ability to consistently perform to a high standard on diversity and inclusion is a challenge: 52 of the companies earning a top 100 spot are included for the first time, while just 17 companies remain ranked on the index for two consecutive years.
Earlier this year, Bloomberg also expanded its Gender-Equality Index to make it industry-neutral, having focused on the financial services sector for the first couple of years of its existence.