Óscar Suárez-Fernández^1,*, José Manuel Maside-Sanfiz,^1,2 Mª Celia López-Penabad^1,2 and Mohammad Omar Alzghoul³

¹ Financial and Accounting Department, University of Santiago de Compostela, Spain

² ECOBAS Research Center, Spain

³ Phd Doctoral Programme in Economics and Business, University of Santiago de Compostela, Spain

* Correspondence:  Email: oscar.suarez@usc.es.

Abstract:   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.

Keywords: diverse workplace; inclusive workplace; environmental performance; ecoefficiency; energy sector

JEL Codes: M12, M14, M53

1. Introduction

Energy is the engine that drives economic growth in any modern economy, as it is one of the essential inputs in the development of any economic activity. In recent decades, both the production and consumption of energy from fossil fuels have led to an exponential increase in greenhouse gas emissions, resulting in undesirable environmental consequences (International Energy Agency, 2018). Therefore, the development of a green economy with environmental awareness has become necessary, involving more sustainable forms of energy production and consumption. The energy sector has become a key axis in achieving internationally agreed-upon goals on climate change (Kim et al., 2022).

As an industry that provides an essential good for any economy and concurrently plays a crucial role in initiatives to mitigate climate change (European Commission, 2020), studying the energy sector and its environmental impact is of interest. However, the primary challenge facing modern societies in the 21st century is achieving sustainable development (United Nations, 2012). Therefore, environmental commitment alone is insufficient for business survival; it must be coupled with economic growth and socially responsible behaviors, constituting the so-called triple bottom line: profit, people, and planet.

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