Key takeaways from COP26: New insights on DEI performance on the road to a Net Zero Economy

Denominator participated in COP26 and provided data on the social aspect of ESG. Our CEO, Anders Rodenberg, highlights two key takeaways:

  • COP26 in Glasgow looks to be a changing point in the fight against climate change. Not because of the moderate political outcome but because private corporates and finance were present in large numbers for the first time. The private sector has adopted the political goals of a Net Zero Economy by 2050 and the actions, investments, and financing to achieve it have begun.
  • Although most of the sessions at COP26 were still focused on the environmental aspect, the social aspect of ESG is gaining traction and attention. As governments and corporates begin to implement climate solutions on a big scale the questions of the social consequences and impacts of such solutions enter the main scene. Data is key to answering these questions.

We presented our data and findings at multiple events, but the main event was The Female Quotient’s Equality Lounge @ COP26 on the Gender and Diversity Day.

Below are two examples of the data we shared

  • Race to Zero committed companies and their DEI performance.
  • Do women have a seat at the table on the road to a Net Zero Economy?

Please do not hesitate to reach out in case of questions about the data or the scoring methodologies or more information about the other data examples not covered in this article. You can also watch the full recording of the event here where more details are provided.

Race to Zero happening without people externalities?

Many companies have committed to Race to Zero, but do these companies also remember to be leaders in the way they address the social aspect of ESG?

The data below in Picture 1 show that Race to Zero companies are better at age diversity and the female representation at boards and executive levels compared to the benchmark, but not when looking at the total DEI performance or the race/ethnicity dimension. Race to Zero companies and the benchmark have equal performance on gender and disability dimensions. Please note that the gender dimensions take more factors into account such as gender pay gap, middle management, all employees, sexual harassment policies, etc. This explains why the gender performance is equal – despite the Race to Zero companies having better female representation at the top.

Picture 1

Picture 2 shows how industries perform across total DEI and four of the sub-dimensions. Please note these are the industries within the Race to Zero population and not the global company population. Leisure/Hospitality, Technology, and Financial Services are ranked at the top of the total DEI performance while companies that have committed to Race to Zero within the Energy industry are the worst performing. Energy companies play a key role in the green energy transition which makes it a bit worrying to see these companies on average does not seem to perform well on DEI compared to other companies. Whilst Alternative & Renewable Energy companies do perform better, they are not in the upper quartile despite being front runners in the green energy transition.

Picture 2Do women have a seat at the table on the road to a Net Zero Economy?

Picture 3 shows the female representation at board and executive levels and sadly the answer is: “no, women do not have enough seats at the table, considering the 50/50 gender distribution in the world”. The numbers speak for themselves.

Diversity, Equity, & Inclusion is a journey, and the most important thing is to begin the journey. The need for change is urgent and whilst the female representation, especially at the executive level, is low some industries show that it does not have to stay that way.

Picture 3