ESG ideology has interventionists and self-proclaimed ‘activists’ asserting both control over corporate decision-making and investment and divestment decisions of institutional investors. Betwixt Environment and Governance, the ‘S’ criteria represent social factors as just as pernicious as the ‘E’ and ‘G’ (though their deleterious aspects are typically downplayed). Among the social factors in consultants’ ESG ‘scoring’, or ranking, is fidelity to mooted ‘Diversity, Equity and Inclusion’ targets – sometimes abbreviated to the initials ‘DEI’ (Latin for God), with the effects more like ‘DIE’.
DEI holds that marginalized or previously discriminated groups should have preference in hiring, training, and promotion to higher managerial levels (i.e., indigenous people, the disabled, immigrants, women, the LGBTQIA2S community, non-Christians, and ‘BIPOC’ – Black, Indigenous, People of Colour). The advocates also demand preference for the group members who own potential contractor-suppliers.
It is true that women are over half of the population, Aboriginal persons (Indian, Metis, Inuit and Innu) equal about 4%, and non-white people are roughly 20% of the population (depending on how ‘BIPOC’ is defined). As yet, none of those groups are present in those proportions, in aggregate, in corporate ranks. However, examining the issue more closely more factors emerge than DEI proponents admit.
Recruiters seek the best workers, using verified candidates’ experience and skills, education, suitability for the role, and their development potential – all towards to awarding them a tolerable compensation. Current corporate annual reports report vigorous programs searching out, identify, encourage, and, often, upgrading the skills of young, or even older, members of the total available talent pool.
If that pool is not as diverse as it should be, it may be that the education and other aspects of personal development, including home life, are not preparing individuals to be attractive hires. Or, they may not live near where the hiring firms operate. Yet, commendably, mining, construction, oil and gas firms have made strong, successful efforts to recruit and train people in remote places in Canada and globally.
Women, and the other purportedly-disadvantaged persons, who barely inhabited the corporate world decades ago, now are very visible and present, and some at high levels. To hire or promote those who are not yet fully able to contribute effectively to a firm simply on the basis of visible characteristics could damage the firm and its overall morale. To force firms to do hire and promote disadvantaged persons would mean taking managerial decisions out of their hands and substitute rules imposed by those who would not face the consequences. Such practices would also cast doubt on those dubiously so elevated.
Some applicants lack relevant preparation before entering the work force, not all deficiencies of which are skills- or training-related. Schools and curricula may be inadequate or inappropriate, or even ill-attuned to the current or future technical needs of firms. Potential hires may not be ready for formal, structured, work-life culture, requiring help from firms that they were not created or tasked to provide.
Firms can upskill new hires, but the primary drivers of development of new workers best be parents, educators, communities and governments. Rigid hiring quotas can harm both firms and individuals. Ending serious social disparities is not the private sector’s mission, nor should it be so forced to be.