Achieving gender equality in the C-suite could take up to 40 years, and maybe even longer. Can we afford to wait this long, when gender and other diversity issues have been linked to the sustainable growth of businesses? Consumer trust in businesses has remained relatively stable, however only 34% of consumers believe that companies are transparent about their commitments and promises. Social washing occurs when there is a discrepancy between perceived commitments to social issues and genuine action. It has a similar premise to the often-cited ‘greenwashing’, but its focus spans a wider array of issues, including human rights, gender diversity, equity, inclusion and labour.
Focusing on gender diversity and the gender pay gap, there is sustained stakeholder pressure for companies to become more accountable in their public reporting on gender diversity. Some companies have been seen to mislead the public through gross exaggerations and truth embellishments in the management of their social risks and issues. Case in point, where in 2017 Audi ran a Super Bowl campaign promoting gender equality, meanwhile the company’s own lacklustre record on gender equality was thrust into the spotlight. At the time, the company had no women on its executive team and only 16% women on its supervisory board. The financial services sector is another example of companies not ‘walking the talk’ when it comes to the gender pay gap. While the ‘talk’ among the financial services sector has more than doubled from an average of 106 mentions to 232, the actual pay gap has reduced from 29.5% to 24.7%, still way above the 19% FTSE100 average.
Unfortunately, moves to improve gender equality in the workplace may have been put on the backburner. The European Commission originally promised a report by the end of 2021 to detail how it would create a social taxonomy, but this has been shelved with economic and energy crises taking priority. So now, more than ever, companies need to take the lead in making sure they ‘walk the talk’ in matters of gender equality. To curb social washing, it remains imperative that business strategies are aligned with clear-cut social goals that are measurable and actionable. In addition to this, it is also important that companies are transparent when publicly reporting performance and progress against these goals.
Authors: Bolu Iyiola and Isabelle Basquille-Tatlow