Non-binary gender disclosures: Indirect benefits outweigh ‘wokeness’ discomfort

WHEN my editor and I set out to do a story about Singapore Post being the first major company listed on the Singapore Exchange (SGX) to report on non-binary gender statistics, we thought it would be a relatively straightforward piece.

All I needed to do was to send out queries to human resources experts, agencies that provide environmental, social and governance (ESG) ratings, as well as investors.

The idea was to understand how the market would view corporates that embark on such novel disclosures, and whether that would have an impact on the ESG credentials of these companies.

Given the growing focus on ESG matters in investment decisions, investors are increasingly factoring in information about how companies’ actions may have an impact on the wider environment and society they operate in.

Companies’ diversity, equity and inclusion (DEI) policies and disclosures are gaining importance in tandem with the rise in ESG investing. But it’s not a new development, with efforts to push for more female representation in the workplace underway for decades. Inclusion of non-binary gender disclosures expands the scope of such practices.

However, my requests for comments from investors were repeatedly rejected. After approaching 13 investors, including both asset managers and family offices, only one replied.

Of course, there were some unavoidable instances in which the relevant spokespeople were unavailable, and responses were therefore not possible by publication time. But there were also instances in which it seemed like there were other factors at play.

One reason could be that many investors simply do not yet take non-binary gender disclosures into consideration.

While the push for greater recognition of diverse genders has been growing in recent years, only a handful of companies globally, such as Google, Salesforce and HSBC bank, actually report statistics of non-binary people in their workforce.

Such data is also not made available even among companies that have publicly either acknowledged that gender is not binary or rolled out initiatives in support of non-binary people.

One example is Apple. The iPhone manufacturer’s latest diversity report reflected male and female gender categories. But it added that the company “deeply respects that gender is not binary” and that it is “taking steps toward reflecting that in (its) global reporting”.

Besides the lack of data, another factor is the potential for controversy. While the push for greater recognition of non-traditional gender identities has been gaining momentum in developed markets in the United States and Europe, it is still relatively muted in Asia.

Even SingPost declined to elaborate on the process behind how the decision to include the statistic came about.

In the United States, corporations are increasingly pressured to take on a political slant, with their policies on non-binary gender or abortion seen as indications of whether they are leaning towards the right or left of the political spectrum.

And investors with investments in Asia might be wary of being perceived to have any political leanings if they were to publicly take a position on non-binary gender disclosures.

Despite the backlash from some segments of society over these developments which they deem as too “woke”, the overall trend is that investors are seeking more disclosures on diversity metrics from companies, and companies are starting to recognise that traditional gender categories may not be sufficient to reflect the full breadth of diversity, according to David Smith, senior investment director of Asian equities at abrdn.

Sustainalytics also said that it hopes to see more companies disclosing “a broader scope of gender”, which may be an indication that non-binary gender reporting might be one metric the ESG ratings agency could look at when assessing companies in the future.

The ultimate question for a business is whether it is worth the trouble to be ahead of the curve and report on non-binary gender statistics.

On the cost front, it does not appear to add significant costs to give staff an additional option when indicating their gender identities.

On the other hand, the benefits seem more substantial. To begin with, it would give companies a more accurate view of the people working for them.

More importantly, disclosure of non-binary gender statistics is an important signal of inclusivity that can help to attract and retain talent. There have been studies done which show that an inclusive workplace contributes positively to the job attitudes and psychological well-being of its employees. This ultimately translates to better business performance.

Of course simply expanding the number of gender categories in diversity metrics reporting does not fully capture how inclusive a company is. Other non-discriminatory policies have to be in place as well.

But this could be a start for companies looking to expand their DEI practices, and an inexpensive one to undertake as well.