Diversity: work in progress

Seven leading real estate organisations are coming together to focus on DEI – diversity, equity and inclusion across the sector, globally.  

The move highlights how issues of corporate governance are rising on CEO agendas around the globe, as companies seek ways to be part of broader moves on fairness and climate change.  

The latest move sees ANREV, INREV, NAREIM, NCREIF, PREA, REALPAC and ULI joining forces to back and expand the Global Real Estate DEI Survey, to create a broad benchmark of gender, ethnicity and nationality across seniority and job functions across commercial real estate globally.  

Consultancy Ferguson Partners has been hired to conduct the survey, and will be seeking submissions until 22 October 2021. Publication date is 17 December. By broadening the scope of the survey, it is hoped that everyone from institutional investors to real estate investment managers, architects, developers and operating partners, to service providers and consultants will contribute.  

“There is no one-size-fits-all solution as to how we improve DEI within commercial real estate. Instead, there are a multitude of ideas that can be shared for the benefit of the entire industry,” said Zoe Hughes, CEO of the National Association of Real Estate Investment Managers. 

And Gail Haynes, president of the Pension Real Estate Association added: “What has been missing is a broad-based effort to establish a baseline to which firms can compare their own diversity programs and accomplishments, and to measure progress in the industry over time.”  

The 2020 survey, which collected data from only US respondents, saw 96% say they had a DEI programme or strategy in place. The top three desired outcomes mentioned were a greater diversity of employees; a more diverse management team; and more women in leadership positions. 

Within the hotel sector, most of the larger players are already publicly committed to goals across DEI issues.  

Marriott, which already had DEI goals set within the organisation, has recently accelerated those efforts by pulling forward milestone dates in 2021. The company has just published its annual ESG progress report, with CEO Tony Capuano acknowledging: “We know we need to be steadfast in our wider commitment to Serve Our World, particularly to reduce our environmental impacts.” Specifically on DEI, the company has committed to collaborating with expert community partners, enhancing internal talent development programmes, and “using Marriott’s voice to advance solutions that address barriers to equality and opportunity”. 

Its publicly stated targets are now to achieve gender representation parity for global company leadership by 2023; increase representation of people of color in executive positions from 20.5% to 25% by 2025; and achieve 3,000 diverse- and women-owned hotels by 2025.  

Also recently reporting is hotel landlord Host Hotels. While understandably predominantly focused on building-related carbon reduction moves, the company last year launched a diversity and inclusion programme, and now reports on board diversity (22% female, 11% ethnically  diverse), pay equity and supplier diversity.  

In the UK, Whitbread already operates a well established Force for Good programme, drawing together all its ESG initiatives. In 2019, it wrote diversity and inclusion into those aspirations, and followed up with initiatives that include the creation of a diversity and inclusion centre of expertise, “allowing us to have an unrelenting focus on this agenda”. The group has set diversity targets for representation across senior levels in the organisation.  

In its 20/21 report, Whitbread acknowledged it has much more to do, noting that the Black Lives Matter campaign had impacted its thoughts on driving change. It also reported in some detail on the workforce: “9% of our employees identify as BAME, 66% of our employees are female along with 35% of our leadership population and we are led by a female CEO. We have an active LGBTQ+ network, known as GLOW, which is a community anyone can join across the organisation. We also have four other inclusivity networks that each have executive sponsorship.” 

Another group actively tackling the issue is IHG, which recently announced a partnership with Singapore’s Association for Persons with Special Needs, to provide support, jobs and training at the group’s hotels. An apprenticeship programme will aim to improve routes into work for the associations students, and builds on a long term programme in Singapore to help minorities into work in the hotel sector. 

“Diversity, equity and inclusion is an integral part of IHG’s culture and we are committed to serving the communities in which we operate,” said IHG’s regional managing director Rajit Sukumaran. “More than three decades have passed since 1989 when Holiday Inn Orchard City Centre became a pioneer in Singapore in hiring people with different abilities.” Around 5% of the full time workforce are such individuals.  

APSN chairman Royce Seah added: “This collaborative partnership will open new doors of opportunity on various fronts for our special needs students and trainees with mild intellectual disability, furthering our mission of empowering and guiding them into an inclusive society.” 

HA Perspective [by Chris Bown]: Let’s start out with some good news – it’s not hard to think of some female leaders in the hotel space. Whitbread’s Alison Brittain, Liia Nou, newly promoted at Pandox, Marriott’s Leeny Oberg, Winnie Chiu at Dorsett, Suphajee Suthumpun at Dusit. All senior leaders, they’re proof at the very least that the hotel sector has moved on from being entirely led by old white men.  

But, in the round, the numbers are still way off a representation of the workforce at large.  

The report from Host Hotels – a 76-page beast – is outgunned by Marriott, with 86 pages of its “Serve 360” report. So does all that effort deliver value? Yes, and, er, no.  

Yes, in that everything is now being measured. And only by measuring, can you work out how to improve, year on year.  

No, because the reports are long on worthy statements. And simply edging year on year towards incrementally lower numbers is not really good enough. Especially if, in the case of US hotels, you start from a baseline of far higher resource consumption than in many other parts of the world. And the problem with incremental improvements is, they can take corporate eyes off the potentially bigger, game-changing commitments.  

And no because, as other organisations have already found, if you set a percent target of, for example, a number of senior management positions being women, then you can set the organisation on a path where inferior candidates end up being selected for job roles, to meet DEI targets.  

Getting staff to follow an online hour of unconscious bias training (as Host references) ticks a box, but what does it actually achieve?  

So good effort, great to see organisations moving in the right direction – but we’re all on the lookout for some really rainmaking leadership, please. 

Additional comment [by Andrew Sangster]: One of the biggest challenges with the whole ESG (Environmental Social Governance) agenda has been the lack of meaningful metrics. The initiative by the Global Real Estate DEI benchmark is therefore welcome. 

This benchmark and the others currently being created will set the agenda for discussions around government policy interventions and provide the outline for how industry will be expected to comply.  

Engaging now matters for investors, operators and anyone else likely to be impacted by the new rules. The days of doing no more than asking a junior to draft a few well-meaning words as part of your ESG policy are fading fast.  

What’s not to like? When it comes to government and bureaucratic involvement, there will probably be a lot that turns out to be problematic. 

Our sector, taking the broadest measure of the travel, tourism and hospitality industries, has a poor track record of engagement with governments. There are excellent people in place – Kate Nicholls, CEO UKhospitality is, I believe, best in class – but corporates are not prioritising this engagement sufficiently. 

What this means is that other sectors which historically have had the ear of government – think agriculture and manufacturing in particular – will bend new policies to suit them. On some measures (like diversity), our sector will do OK relative to others. But the environmental piece is likely to be challenging. Our sector risks being clobbered by environmental regulations. 

We have written before in Hotel Analyst about the dangers of companies embarking on ESG initiatives on their own – there is a risk of alienating numerous stakeholders if policies are not fully thought through.  

It is far better and safer to engage on a pan-industry basis. Companies should accept they need to show leadership by investing both time and money in supporting appropriate bodies. 

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