Samsung C&T ranked 52nd in the 2019 Diversity & Inclusion Index presented this month by internationally renowned data provider Refinitiv.
The index lists the most diverse and inclusive workplaces out of more than 7,000 companies worldwide, accounting for more than 70% of global market capitalization. It placed Accenture, a multinational management consulting services company, in the top spot this year with an overall D&I score of 85.5 – a percentage based on the average of the four main category scores described below.
Alongside Samsung C&T (52nd/D&I score 70.75), three Korean firms were named among the Top 100: Korea Gas Corporation (50th/D&I score 71), Samsung Electronics (54th/D&I score 70.5), and Hankook Tire & Technology (80th/D&I score 69.25).
Corporate ESG assessed
Launched in 2016 and operated as Thomson Reuters D&I Index through 2018, the Refinitiv D&I Index is powered by Environmental, Social and Governance (ESG) data. It assesses over 7,000 companies based on 24 metrics across four categories: Diversity, Inclusion, People Development and News & Controversies. Companies must score in all four categories and the average result decides their final index position.
This publicly available information is manually gathered and rigorously checked to ensure its reliability. Companies must score in all four categories and the average result decides their final index position.
“Diversity” measures cultural and gender diversity within a company’s workforce as well as corporate diversity policies and targets.
One of the metrics here refers to the percentage of board members with a cultural background that is different from the location of the company’s headquarters. There are several other metrics checking what proportion of a firm’s staff are made up of women – from new employees to executives.
Regarding corporate goals, this category looks at specific policies and aims that work towards equal opportunities.
Human rights, work-life balance and special needs all feature prominently in the D&I Index’s measurement of inclusion.
This area asks whether a company is flexible with working hours and has day care services. It also examines what percentage of employees have disabilities or special needs.
“People Development” focuses on how committed a company is to the career advancement of its employees.
Numerous metrics in this category examine training programs and opportunities for promotion from within a firm. The D&I Index additionally reflects how satisfied employees are.
News & Controversies
This final category measures corporate performance through the lens of the media.
More specifically, its metrics assess the news controversies a firm has been involved in related to issues such as wages, discrimination and harassment in the workplace.
This category counts it as a positive if a company has had no controversies, but it also factors in market capitalization so there is a greater weighting for larger firms.
ESG becomes ever more important
It is becoming increasingly common for investors to make decisions based on ESG factors. Researchers at Oxford University in 2017 found that 92 percent of institutional investors want companies to identify and report ESG factors that materially affect performance. More recently, the World Bank made the case for including ESG when it comes to fixed income investments.
This influence shift is clearly having an impact. Investing with ESG factors in mind “constitutes a major force across global financial markets,” according to the Global Sustainable Investment Alliance. Its 2018 review reported that assets from such sustainable investing in Europe, the U.S., Canada, Japan, and Australia and New Zealand markets stood at USD 30.7 trillion at the start of 2018 – a 34 percent increase from two years earlier.
It all highlights why it is so important for listed companies to take ESG factors seriously. As the world demands good governance and social awareness from its corporations, their futures may depend on it. And this trend looks set to place only more stress on the D&I Index now and in the future.