EDITOR’S COMMENT When it comes to behavioural change, I’m a big fan of the stick rather than the carrot. Maybe it’s the built-in pessimist in me that comes with being a journalist, but there’s got to be a reason to shift, and that reason – particularly in the business world – is undoubtedly made stronger if it comes with financial consequences.
So I was really interested to see this week that AECOM had linked the cost of its borrowing to not just its sustainability agenda, but its diversity agenda too. That it would pay more for its debt if it failed to continue to improve its percentage of women in the business.
Granted, it is only doing it in regard to one aspect of diversity, and arguably the easiest bit to work on, but a stick is a stick, no matter how big or small it might be.
The $1.1bn facility, secured with Bank of America, comes with both incentives and penalties based on whether the business succeeds or fails on reducing greenhouse gas emissions in line with its science-based targets and improving the percentage of women in the firm. “We are literally putting our money where our mouth is,” says president Lara Poloni.
We’ve seen an increase over recent years of businesses linking their revolving credit facilities to their sustainability agendas – kudos to Great Portland Estates for being one of the leads on this in our industry – but linking it to diversity is definitely a new one for me.
Could this be the answer to finally bringing about more rapid change in culture at businesses in every sector?
I’ve been having numerous conversations this week about equality, diversity and inclusion, and about the business imperative of EDI. All aspects of it. The real estate industry runs a real risk of losing out on essential talent if it doesn’t get its approach to EDI right – if it doesn’t start to make real, cultural change.
In a future that is going to be led by technological advancement and digitisation, and a fresh focus on some of the softer skills of leadership – humility, empathy, vulnerability – the industry’s need to break away from the traditional has never been so apparent.
And yes, change is happening, but let’s be honest, it is happening at a glacial pace. Is linking diversity to financial gain (or loss) the way to speed up the process? Studies showing the benefits to the bottom line of having a diverse workforce have abounded for years, but that carrot seemingly hasn’t been tempting enough to bring about real change. Is the stick of cost, rather the carrot of gain, the solution?
It is a trend that is definitely catching on within the forward-thinking businesses I talk to. Increasingly, senior leaders are telling me that they are – or are at least thinking of – linking bonuses not just to how much money people bring into the business, but how they are helping the business succeed in its EDI strategy. You may well have done the biggest deal and captured the biggest fee, but if you have been exclusive and not done your bit to make your business more diverse, then sorry, no huge bonus for you.
It’s a way of changing the language of EDI to make it more in tune with the language of business that has been spoken for so long. And I say, if money talks, let’s make it help us pick up our pace on the journey to a more representative sector.
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