Do diversity & inclusion of human capital affect ecoefficiency? Evidence for the energy sector

The aim of this study was to assess the impact of diversity and inclusion (D&I) initiatives in workplaces on both financial performance and environmental considerations (referred to as ecoefficiency, ECO). We focused on the energy sector, a significant environmental contributor, and the research spanned from 2016 to 2022, analyzing a broad global sample of 373 firms from 53 countries. ECO was evaluated by integrating environmental scores and conventional financial metrics using data envelopment analysis (DEA). The findings revealed a significant positive relationship between the collective indicator of diversity, inclusion, people development, and the absence of labor incidents on ECO. Specifically, practices related to workforce diversity, cultural and gender implementation, and investments in employee training and development opportunities were found to be beneficial for ECO. Additionally, we found that these policies impact the environmental component of ECO. However, no significant relationship was observed between practices related to inclusion policies and controversial labors, and ECO. Furthermore, the results suggested that ECO within the energy sector is influenced by factors such as board size, the integration of environmental, social, and governance (ESG) aspects into executive remuneration, the adoption of a corporate social responsibility (CSR) strategy, alignment with the United Nations (UN) Environmental Sustainable Development Goals (SDGs), and the implementation of quality management systems. Conversely, CEO-chairman duality and the presence of independent board members do not significantly impact ECO in energy companies. These research findings provide valuable insights and recommendations for industry managers pursuing sustainable business practices, particularly through effective talent management strategies. Additionally, they offer guidance for investors interested in constructing environmentally conscious portfolios.