For the 4th time, the bi-annual analysis of all Corporate and CSR reports of Europe’s Top 50 companies has been completed. The analysis shows how much and what type of D&I policies, practices or data large European corporations communicate. Since 2008, the results of this research series have been serving as trend indicators for D&I in Europe.
Companies are communicating more and in a more detailed way about their policies and practices in D&I. This is the overall result of the most current empirical analysis of all Annual Reports of the companies included in the Stoxx® 50 Europe index. In addition, the research analysed all CSR reports that were published by these fifty largest corporations in Europe. The study is the sixth bi-annual analysis of its kind, initiated, designed and performed by European Diversity Research & Consulting.
More than just a nice blurb? How much do companies communicate about their D&I work?
In their Annual Reports, which companies are required to publish as part of their Investor Relations, Europe’s Top50 today include more information about D&I than ever before. Half of them dedicate a full page or more to describe how they manage differences (most of them write 1.5 – 2 pages). Another dozen shows D&I on 0.5 – 1 page. Only few companies have little or no information on D&I in their Annual Reports – in 2010, most companies had only a quarter page on D&I and 10 out of 50 had not mentioned it. In the current analysis, the overall volume of D&I information grew by 50% compared to 2014. French and British companies communicate more than average, BeNeLuxDk(*) and Spanish less. By industry (**), the Industrial sector leads, the Consumer, Food and Retail sector lags. While the quantity of the information provided should be considered a success measure, some of the differences can be explained by the respective context, the researchers say. This also applies for the kind of information provided.
More than lip service? Which type of D&I information is provided and how is it phrased?
In their current Annual Reports, some companies have moved away from the terminologies ‘Diversity & Inclusion’ or ‘Diversity [management]’ alone, while general HR terminologies or specific terms regarding equality or equal opportunities have (again) become more wide-spread. This is most significant in the IT / communication technology sector and in Spain, where D&I is not called out in the respective Annual Reports. Experts see this as a reaction to political priorities or requirements introduced in some of the countries.
The nature of the information presented continues to show an emphasis on stressing the commitment to Diversity or equality by quoting policies and other fundamental frameworks. The number of companies that describe concrete activities or even specific results and successes achieved through Managing Diversity & Inclusion has decreased a bit. 22 Annual reports contain programme specifics (down from 29) and 12 mention concrete achievement (down from 21), which none of the BeNeLux, Danish do; Spanish reports do not contain programme specifics. There seems to be a tendency to report more demographic numbers instead – the researchers link this to the ‘quota’ legislation in some parts in Europe.
Diversity is understood much more comprehensively than before
The biggest change has occurred regarding the breadth of topics that are explicitly mentioned to describe Diversity. More than half (26) of the Annual Reports now mention five or more of the core dimensions (up from 13 in 2013/14), which is consistent across all geographies except BeNeLuxDk and across all Industries except Pharma/Chemicals. This comprehensive nature continues to send the message that from a business perspective, Diversity should go beyond the increasingly regulated dimensions (gender, disability, sometimes ethnicity, age). At the same time, companies have increased the transparency regarding diversity in their management ranks while the number of Annual Reports that contain details about workforce diversity has dropped from 24 to 16. In the majority of country and industry clusters, companies report more than just gender figures. The numbers are also balanced by intense communication of various D&I activities.
Concrete D&I initiatives, programmes and tools
The overall communication pattern regarding specific D&I activities has been found to be very similar in 2015/16 compared to the analysis in 2013/14: French (4.71) and German (4.2) companies describe, on average, more D&I practices than the overall average (3.77). By industry, more significant differences show up between the top groups Consumer and IT (6.5 activities on average) and energy (1.5). British companies are now including less programmes than two years before and BeNeLuxDk and Spanish Annual Reports do not contain this type of information in their Annual Reports; some, however, do so in their CSR reports.
CSR reporting offers more flexibility to communicate D&I – which is, however, not fully leveraged
The number of CSR reports (or integrated reports) available as well as the number of those that contain D&I information has slightly increased, compared to the previous analysis (in 2013/14, both numbers had dropped sharply compared to earlier figures). Interestingly, the amount of pages dedicated to D&I is more centred in the lower categories of 0.5 – 1 page or ‘just a paragraph’. As expected, the terminologies used are generally consistent with those found in Annual Reports as is the breadth of the understanding of Diversity and the nature of the information presented: Focus on commitments/policies and on practice examples/activities. However, in CSR reports, companies tend to include more success stories and concrete achievements (which includes awards, certificates, benefits or progress) than in their Annual Reports.
The landscape of D&I programmes among Top 50 European Companies
Another big jump was found in the amount of programmes or activities that companies describe in their CSR reports: A total of 133 (up from 47 two years before). The financial industry communicates most intense in this regard, an average of 8.75 programmes per company, followed by IT & Communication Technology (4.7). Geographically, the German group is most actively communicating their activities (7.8 initiatives per company on average), followed by their Spanish peers (6.5). Swiss only mention 2.5 on average.
The type of programmes and other details will be analysed and summarised separately. In addition, a separate report for the Top 50 companies in the EuroZone (aka EuroStoxx ® 50) will be published.
Relevance and Details of the Research
Corporate Reporting forms a key element in corporate communication as it relates to business topics that are considered strategic priorities. In 2008, when the first systematic analysis was carried out (analysing reports for the year 2007), including Diversity in investor communication (i.e. Annual Reports) or Public Relations (CSR or similar reports) was an important indicator for how serious the topic was tackled. In the following years, it increasingly became a way to identify trends in D&I, mainly through the breadth, nature and depth of the information communicated. None of these data, however, provide a full picture of what companies are doing in the D&I area as some, many or most activities will not be included in the reports analysed. However, the research provides empirical data that is consistent over time (except that the composition of the Stoxx ® indices changes each quarter and hence differs across the reports. Nevertheless, the fact that the 50 largest companies (in Europe or the Eurozone) are analysed, remains the same.
The 50 Annual Reports for 2015, analysed in 2016/17 contained a total of 12,500 pages, 60 of which talked about Diversity.
The 41 CSR Reports for 2015 (including the integrated ones) contained a total of 3,900 pages, 60 of which talked about Diversity.
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(*) Some countries were combined to country clusters to consolidate data; Denmark was included with BeNeLux for purely practical reasons
(**) The industry sectors were combined and consolidated into six combined sectors to enable easier comparisons