Workplace Inclusion Drives Productivity
Advancing Workplace inclusion
We urge companies to create meritocratic environments where all employees—regardless of gender, race, or sexual orientation—can contribute and thrive. Effective DEI practices ensure that no group is unfairly advantaged or disadvantaged.
These practices have measurable company-wide benefits. Numerous studies point to the advantages of a diverse workforce; data shows meritocratic firms are more likely to have strong financial performance over time. A small subset of such findings include:
Repeated McKinsey studies have found that companies with higher percentages of gender, race and ethnic diversity in corporate leadership have a greater likelihood of outperforming peers on profitability. As of 2024, this includes a 39% greater likelihood of outperformance for companies in the top quartile for gender or ethnic representation on their executive teams, versus those in the bottom quartile.
Researchers reviewed the workforce diversity of 1,641 companies between 2016-2021. Linear regressions found statistically a link between management diversity and corporate financial performance—including enterprise value growth rate, free cash flow, return on equity, return on invested capital, and 10-year revenue growth, among other indicators.
Inequality may also threaten the total portfolio return of diversified investors by slowing economic growth: for example, one study determined gender and racial gaps reduced GDP by $2.6 trillion in 2019.
actionable steps
As investors, we call on companies to:
Commit to Policy: Uphold strong DEI policies.
Provide Oversight: Implement clear oversight of workplace culture, with systems that include executive management and the board.
Ensure Transparency: Publish quantitative data on workforce diversity, hiring, promotions, and retention.
company engagement
DEI is not just an obligation—it's a business imperative. Explore how individual companies can lead the charge: