If you were to compare diversity, equity, inclusion, and belonging (DEIB) to the human body, all of the bodily systems and organs would be your core business concepts, with DEIB and intersectionality acting as the circulatory system. Think about it: Each concept/topic can exist on its own, but what connects them? What aids in making sure these topics work together?
Intersectionality, equity, inclusion—the list goes on! This doesn’t start and stop with only DEIB topics, either. Intersectionality often connects DEIB to other topics that are strengthened or furthered due to those efforts. One of the most common intersections in the rapidly evolving business landscape is that of DEIB and corporate social responsibility (CSR). That responsibility, as well as environmental stewardship and transparent governance, has never been more crucial to not just the success of a business but the world itself.
But what is CSR? How do you decode the difference between it and environmental, social, and governance (ESG) reporting? And what does this even have to do with DEIB and sustainability reporting in this sector? Let’s crack the surface of navigating the complexities of CSR, ESG, and sustainability reporting and see how businesses, big and small, can make a difference.
What is corporate social responsibility?
So, what exactly is CSR, and why am I talking about it in my role as DEIB Lead? CSR is the idea that a business has a responsibility to society that extends beyond providing jobs and making profits and that, when possible, business leaders need to consider their decisions and impact on the environment and social topics to reduce harm in the world.
Using the circulatory analogy from before, enter CSR, the heart of this system, pumping purpose and ethical commitment through its veins. It isn’t solely about financial gains; it’s about nourishing the company’s collective conscience. It whispers, “Hey, fellow cells, we’re interconnected!” Along comes DEIB—the circulatory system’s white blood cells, tirelessly patrolling the corridors of the company headquarters. DEIB ensures that every cell—regardless of its origin, function, or unique contribution—feels like an essential part of the whole. It’s like a protective shield for the company’s health.
But here’s the twist: CSR and DEIB aren’t just neighboring vessels; they’re intertwined capillaries. They share a network called “social impact.” CSR used to be the extroverted artery, organizing community events and galas. Meanwhile, DEIB, the introverted vein, quietly built connections between diverse cells within the organization. They have even come so far as to become inseparable from CSR, realizing that DEIB isn’t merely about compliance—it’s about fostering a harmonious ecosystem of diverse talents. And DEIB? Well, it discovered that CSR’s community garden isn’t just for aesthetics; it’s about nurturing the roots of progress. So, while I have a natural passion for ESG and sustainability reporting, the intersectionality between DEIB and CSR, as well as ESG, is why I’m writing this.
The distinct differences between CSR and ESG
Let’s start this section with a “controversial” fact—it is not controversial at all, but most clutch their chests and gasp as they do not know this—CSR and ESG are not the same. I can hear the comments chiming on my LinkedIn now: “But Colin, my company has a CSR team, and we love the environment.” This may be true, but the difference between the two is a simple difference in qualitative vs. quantitative work.
CSR is the qualitative focus, representing a company’s commitment to ethical practices, social impact, and sustainability. It encompasses initiatives related to philanthropy, employee well-being, community engagement, and environmental stewardship. CSR is primarily an internal initiative with external benefits driven by a company’s values and purpose. It reflects how an organization integrates responsible practices into its operations and culture while using context-dependent metrics and reporting through narratives, case studies, and stakeholder engagement activities.
ESG, on the other hand, holds the quantitative framework that is most often used by investors and the company when evaluating the company’s overall sustainability performance. ESG considers the company’s external impact on the environment, as well as its social and governance practices, and assesses a variety of factors. The metrics are objective and measurable to show progress over time, focusing on data-driven indicators and performance metrics. If CSR is the heart and central driver, and DEIB is the white blood cells helping to protect, then ESG is the arteries, providing the vital data that needs to flow throughout the system.
Key takeaway: While connected, CSR and ESG are different. DEIB work also adds another dimension to the complexity of topics (discussed more below). If you have separate CSR and DEIB teams, set them up to collaborate. If you are publishing sustainability reports, chances are your DEIB team has information your report will need, and the report will help provide direction for your DEIB team.
The details on DEIB and sustainability reporting
Even though we have discussed the difference between CSR and ESG and shown how DEIB integrates into these, the resulting action of these collaborations needs to be further fleshed out (another biology analogy; see what I did there!). Sustainability reporting is rapidly evolving and driven by new requirements from various bodies, such as the International Sustainability Standards Board (ISSB), the European Union (EU), and the U.S. Securities and Exchange Commission (SEC). These standards aim to create a global baseline for investor-focused sustainability reporting, allowing local jurisdictions to build upon them.
At this time, approximately 25 countries have introduced mandates for companies to disclose ERG information, emphasizing transparency and accountability. Many reporting frameworks and requirements involve the United Nations Sustainable Development Goals (SDGs), which are 17 goals addressing major development challenges.
For businesses on a national level, reporting is simplified because you are most likely reporting based on your country’s requirements. However, employers of record (EORs) have the more complex task of meeting requirements from all over the world. EORs simplify global hiring by acting as the legal employer of a company’s talent, handling legal responsibilities, HR tasks, and compliance with labor laws.
When expanding internationally, EORs play a crucial role. They allow companies to hire employees in foreign jurisdictions without establishing a physical presence there. This presents a unique opportunity, though, because those foreign jurisdictions carry their own requirements, and to cover them would take a whole blog series dedicated to this topic. Some top-of-mind areas that these companies could focus on in reporting include:
- SDG 8: Decent Work and Economic Growth. EORs enable companies to provide decent work opportunities globally, promoting economic growth and fair employment practices.
- SDG 10: Reduced Inequalities. By facilitating cross-border employment, EORs contribute to reducing inequalities in access to job opportunities across different regions.
- SDG 17: Partnerships for the Goals. EORs foster collaboration between companies, governments, and international organizations, supporting sustainable development efforts.
The above are just three of the most obvious choices in how an EOR impacts sustainability topics. Reporting is a complex process with a multistakeholder approach. By thinking of all the vital parts I mentioned in the section before this, you can see that the intersectionality between DEIB and other business functions provides vital contextual information that is necessary for robust, transparent reports.
Key takeaway: If you are currently participating in sustainability reporting, chances are you have included your DEIB team. If you haven’t yet, consider including them in your next report, which will provide your results with accurate representation and context.
Collaboration between DEIB, ESG, and CSR teams
Ideally, this blog should highlight the importance of a qualitative CSR strategy and how ESG can be used as a quantitative measure to provide context to that strategy. It should also get your thoughts and blood flowing (okay—that’s my last pun) and inspire you to utilize the collaboration between your DEIB and CSR teams. Finally, now is an excellent opportunity to carve out your CSR teams and strategy if you have not done so, as these requirements will become more and more stringent.
All of this information was viewed through my DEIB lens to provide context into how I help drive Velocity Global as the EOR of choice. As you will see in future feature blogs, I will use this as the basis for continuing the discussion on intersectionality, and how the values of your company and people create impact in a way that can reach far beyond your physical or virtual walls.
Interested in expanding your business abroad? Get in touch to learn how Velocity Global can help you compliantly onboard, pay, and manage full-time employees and contractors in over 185 countries.
