Both ESG and DEI have generated massive industries. Investment giants, notably BlackRock Inc., State Street Corp. and Vanguard Group Inc., claim that more than a third of their assets, or $35 trillion, are monitored through one ESG lens or other. Every Fortune 100 company and most Fortune 500 companies have adopted DEI programs. Walmart has committed $100 million to its Center for Racial Equity. Many human resource departments are evangelists for DEI in part because it turns an unglamorous activity (paying salaries and the rest) into a crusade for social justice.
But do these letters really fit together logically? Or are they muddlings of buzzwords that are either ineffective or even counterproductive? The evidence increasingly suggests the latter. Both ESG and DEI bundle together different things that range from the admirable to the questionable. This bundling not only risks setting conflicting, fuzzy or even questionable goals for companies. It also distracts from the mission that initially set the buzzwords afloat — preventing the world from overheating in the first case and tapping a wider range of talent in the second.
Source: Companies That Really Want to Do Some Good Should Unbundle ‘ESG’ and ‘DEI’ – Bloomberg
