By George Ralph
The finance and technology sectors, like any other, have received a good deal of attention over the last few years in terms of diversity and inclusion. The rise of ESG has supported this brilliantly, with businesses able to understand better using ESG data analytics, what is happening within their own businesses. Several strategies have been implemented with the aim of addressing underrepresentation at all levels of businesses, particularly management.
At present, the finance and technology sectors are still subject to an imbalance of representation of gender and race. In terms of gender, men occupy 77% of Technology Director roles. In the finance sector, 53% of entry level banking roles are occupied by women, however less than one-third of women go on to fulfil roles at SVP and C-suite levels, according to McKinsey. A 2019 KPMG study showed that students from some backgrounds were less likely than others to get City roles following graduation. In addition to this, a report by The City of London explored data from eight of the major employers within the finance industry, detailing that people from less privileged backgrounds take 25% longer to progress their careers within an organisation in comparison to some of their counterparts, despite there being no evidence of poorer performance.
We saw positive action in November 2020 when an independent taskforce was launched by HM Treasury and BEIS, conjointly run by City of London Corporation to focus on improving the representation of socio-economic diversity at senior levels in financial and professional services across the UK. In addition to this, the FCA launched their ‘Diversity and inclusion in the financial sector – working together to drive change’ paper in the summer of 2021.
The paper reads that ‘the serious lack of inclusion and inequalities between different social groups have existed within our society for years’. The FCA went on to argue that it is critical that the finance industry and financial regulators participate in the change for addressing diversity and inclusion.
In order to move forward, it is crucial for firms to ensure that diversity and inclusion is delivered as part of the day to day culture of a business. This includes gathering ESG data for diversity, hiring processes and establishing an inclusive culture from the top down. It is critical for firms to have a initiative that sets out the framework for moving forward and a timeline for implementation.
A good data strategy really can assist firms with ESG analytics to help them improve their approach to culture, diversity, and inclusion. Data isn’t just a solution for reporting on business operations and investor and regulatory reporting. It can assist leadership with people, governance, and performance to help positively impact an individual’s working environment and that of the greater industry.