4 minute read 10 Feb 2022
Diversity, equity and inclusion (DEI): the industry perspective

Diversity, equity and inclusion (DEI): the industry perspective

By Marc Siegel

EY Americas Corporate and ESG Reporting Leader, Financial Accounting Advisory Services

Helping clients deliver long-term value creation story. Passionate about corporate reporting.

4 minute read 10 Feb 2022
Related topics Assurance

A new Sustainability Accounting Standards Board (SASB) project addresses potential DEI disclosures and how they vary by industry.

In brief

  • The aim of the project is to understand the impact of DEI in 45 industries and to identify which topics and metrics matter most in specific industries.
  • The SASB’s research shows that investors believe they do not have comparable or decision-useful DEI information to evaluate.

The Sustainability Accounting Standards Board (SASB) is working on a project1 that promises to bring a new perspective to the conversation about what disclosures companies should make about diversity, equity and inclusion (DEI) matters. The SASB aims to understand why and how DEI might impact enterprise value in 45 industries2 so it can identify the topics and metrics that matter most in a particular industry.

The focus on industry-specific disclosures comes as investors are increasingly calling for companies to take more action on DEI topics, companies are providing more disclosures, and the Securities and Exchange Commission is planning to propose requiring more human capital disclosures, including possible disclosures about workplace and corporate board diversity. Many of the initiatives take a one-size-fits-all approach of encouraging all companies to increase the gender, racial and ethnic diversity of their boards and increase board oversight of DEI more broadly.

The SASB’s work could lead companies to make more targeted disclosures that could provide investors with information that is more decision useful. While the SASB isn’t expected to complete the project before it merges with the IFRS Foundation in June 2022, the hope is that the new International Sustainability Standards Board (ISSB), which was created by the IFRS Foundation, will continue the research and ultimately propose more industry-specific disclosure requirements.

For example, in an industry where developing innovative products and services creates enterprise value, a focus on DEI is important so that the company has the diversity of thought and experiences to drive innovation. For a retail business, a focus on DEI for frontline sales staff may be especially important to show that the sales staff is representative of a diverse customer base. 

At the SASB meeting3 in December 2021, when the board added the project to its standard-setting agenda, the SASB staff discussed its research showing that, while there is significant investor interest in how companies manage and perform on DEI issues, investors believe that they currently do not have sufficient decision-useful and comparable data to evaluate. The staff analyzed proxy voting, stewardship and engagement guides for dozens of asset owners and asset managers and noted that 85% included policies, engagement practices and/or proxy voting recommendations based on diversity of the board of directors and the workforce. Gender, racial and ethnic diversity were cited as being important to these investors in their proxy voting guidance.

According to Harvard’s 2021 proxy season review4, shareholders “requested more comprehensive reporting on companies’ DEI efforts, including the effectiveness of programs and goals related to the promotion, recruitment and retention of protected classes of people.” More specifically, the number of shareholder submissions tripled from last year, and of the six submitted for shareholder vote, three received majority support.

The SASB staff analyzed5 academic studies, market research and corporate disclosures, and supplemented that with discussions with market participants, to identify four broad ways in which DEI is most likely to impact enterprise value. They are summarized in the table below

Why DEI is likely to have business relevance


Talent attraction and retention

The role DEI plays in a firm’s ability to attract and retain talent

Product design, marketing and delivery

The role DEI plays in enhancing the product and service value proposition for consumers

Community relations

The role DEI plays in effectively identifying, engaging and proactively managing issues related to the communities in which a firm operates

Innovation and risk recognition

The role DEI plays in a firm’s ability to innovate and recognize risk

The staff has begun to build a list of characteristics and indicators for each of the factors that can be used as a first step in determining which disclosures might be necessary based on the industries that are most affected by one or more of these factors. For illustrative purposes, the SASB staff suggested that characteristics and indicators for the talent attraction and retention category could include:

  • Sustained labor shortages and open or unfilled positions
  • Low rates of gender and ethnic diversity among overall workforce and/or management
  • Aging workforce
  • Prevalence of discrimination lawsuits
  • Significant attrition rates among certain demographics

The SASB staff is continuing to refine the characteristics and indicators and look for industry-specific evidence of likely financial impact of these factors. Once the staff identifies which industry or industries display which characteristics, the SASB can then move forward to develop specific disclosure metric proposals for each industry. Those metrics could be different by industry due to the reasons why DEI is important in varying sectors.


The SASB Human Capital: Diversity & Inclusion standard-setting project is an important development in DEI disclosure. While investors, regulators and companies have been striving to improve transparency about DEI matters, the SASB project contributes to the conversation by aiming to understand why and how DEI is relevant to a particular business model. 

About this article

By Marc Siegel

EY Americas Corporate and ESG Reporting Leader, Financial Accounting Advisory Services

Helping clients deliver long-term value creation story. Passionate about corporate reporting.

Related topics Assurance