Calvert Diversity Report raises the bar for corporate diversity practices
S&P 100 continues pattern of improvement
BOSTON, May 24, 2017 /PRNewswire/ -- Companies within the S&P 100 continue to improve their efforts to foster a diverse workplace, indicating a greater focus on the importance and benefits of a broadly diversified workforce, according to the 4th edition of Calvert Research and Management's Calvert Diversity Report 2017: Examining the Cracks in the Ceiling. Since 2010, Calvert has evaluated and ranked the S&P 100 companies based on 10 diversity indicators: Equal Employment Opportunity (EEO) policy, internal diversity initiatives, external diversity initiatives, scope of diversity initiatives, family-friendly benefits, EEO-1 disclosure, highest-paid executives, board representation, director selection criteria, and overall corporate commitment. In 2010, the most common rating was 70 points out of 100, with 18 companies earning this score. In 2016, the most common score increased to 90 points, with 22 companies earning this rating. Two S&P 100 companies, Cisco Systems and Microsoft, received the top possible diversity score of 100, with ten more receiving high scores of 95.
"This upward trend is encouraging and tells us that companies are recognizing the value of a diverse workforce and are adopting programs to facilitate the hiring, retention and inclusion of diverse employees," said Shadé Brown, ESG Research Analyst. "Moving beyond understanding what practices demonstrate corporate commitment to diversity to understanding how successful practices are implemented is key in an environment where many companies are adopting policies and programs with varying levels of success."
Observations from Calvert's traditional diversity assessment indicate significant improvements in the adoption and disclosure of diversity initiatives and policies:
- Nearly nine out of ten (86%) S&P 100 companies show evidence of three out of four internal diversity initiatives: diversity training, leadership development, mentoring programs, and employee resource groups. However, only 60% offer all four.
- The percentage of firms that offer family-friendly initiatives remains on the rise, with 92% of S&P 100 companies providing three out of the following four programs: flex work, adoption assistance, dependent care, and domestic-partner benefits. That's up from only 71% in 2010.
- Firms have made considerable progress on institutionalizing equal opportunities for LGBT employees and prohibiting discrimination based on sexual orientation and gender identity. Ninety-seven percent of the S&P 100 have EEO-1 policies which incorporate protections on the basis of sexual orientation and gender identity and expression, up from 90% in 2014, 77% in 2012, and 74% in 2010.
- All S&P 100 companies have at least one woman on their boards, and 93% have at least two. Forty-seven percent of the companies have women comprising at least a quarter of their board.
However, opportunities for improvement exist as many of these initiatives have yet to impact the highest levels. Women and minorities remain underrepresented in boardrooms and at the top pay levels.
Evaluating Key Drivers of Improved Workforce Diversity
This year, in addition to its traditional diversity indicator ranking, Calvert introduced a survey element to its diversity study and expanded the universe of companies to the S&P 250 to more closely explore the practices that may lead to tangible improvements in corporate culture and retention and promotion rates for underrepresented groups.
Preliminary analysis reveals companies with the following differentiating factors have a more diverse representation in management and in leadership development programs:
- mechanisms to assess career development barriers
- a more diverse customer base
- individual and group diversity training
- a practice of tracking the representation of various traditionally underrepresented groups in leadership programs, not just women and minorities
- compensation tied to diversity goals
"We know from research that diverse workplaces and diverse leadership in particular are tied to improved corporate performance," said Ms. Brown. "Our expanded analysis in this years' report is a preliminary look at what characteristics of the diversity practices we have been measuring over the years differentiate companies that exhibit diverse leadership from ones that do not."
Calvert Diversity Report 2017 Methodology:
This survey is conducted bi-annually and encompasses the S&P 100 peer group. The latest edition of the survey also includes supplemental research on the S&P 250. Using a point system, Calvert evaluates S&P 100 companies according to their performance on 10 indicators that measure diversity policies, programs and disclosure: EEO policy, internal diversity initiatives, external diversity initiatives, scope of diversity initiatives, family-friendly benefits, EEO-1 disclosure, highest-paid executives, board representation, director selection criteria, and overall corporate commitment. Each indicator has a maximum score value of 10 points. Total scores fall within a range of 0 to 100 points to produce a rating.
The turnover rate for the S&P 100 for the 2017 report is 21 companies. Broad results should be understood in the context of the S&P 100 as a rolling peer group of the 100 largest U.S. companies rather than a fixed roster of companies.
A corporate controversy assessment explicitly integrates the impact of adverse events such as discrimination lawsuits and investigations into our ratings by discounting from companies' overall scores where relevant. The severity, scale and persistence of adverse events and management responsiveness are factors that influence controversy scores with a maximum discount of 10 points.
Calvert requested companies respond to a 75-question online survey, which has allowed for a more nuanced understanding of policy and program implementation across a wider range of diversity outcomes. The findings reflect company responses and disclosures for 2016. While this report ranks and follows trends for the S&P 100, the S&P 250 received the survey. Results reported in the Diversity 2.0 portion of the publication reflect insights from this broader universe of companies.
Diversity performance is only part of a company's overall corporate responsibility and sustainability profile. Calvert acknowledges that some companies that receive a top diversity ranking do not rank highly on other important issues. Calvert's diversity ratings are not intended to reflect a comprehensive assessment of each S&P 100 company's overall corporate responsibility and sustainability performance.
About Calvert Research and Management
Calvert Research and Management is a leader in Responsible Investing, with approximately $9.8 billion of mutual fund and separate account assets under management as of March 31, 2017. The company traces its roots to Calvert Investments, which was founded in 1976 and was the first to launch a socially responsible mutual fund that avoided investment in companies that did business in apartheid-era South Africa. Today, the Calvert Funds are one of the largest and most diversified families of responsibly invested mutual funds, encompassing actively and passively managed strategies, U.S. and international equity strategies, fixed-income strategies and asset allocation funds. Calvert Research and Management is a wholly owned subsidiary of Eaton Vance. For more information, visit calvert.com.
SOURCE Eaton Vance Corp.
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