A Simple Seal Can Tell You Whether A Company Treats Its Female Employees Equally

CREDIT: SHUTTERSTOCK
CREDIT: SHUTTERSTOCK

In August, L’Oreal USA achieved a first: It became EDGE certified, meaning it met global standards on equal treatment of its female employees. While five other companies have also been certified around the globe, L’Oreal is so far the only one in the United States to be able to use the seal.

The idea for a global certification on women’s equality traces its roots back to an annual World Economic Forum meeting in 2011. “It was around the time when a lot of studies were coming out showing that companies that had gender-balanced leadership actually made more money,” said Megan Beyer, external affairs lead in the U.S. for the NGO EDGE Certification, which helps companies go through the assessment process. There have in fact been a huge number of studies that have come to the conclusion that greater gender diversity is good for company performance.

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A group of women at the Forum decided to come up with a global standard for whether companies met five benchmarks of equality for women in their workforces: equal pay, hiring and promotion, leadership development, flexible work and on-ramping programs, and “culture” (for example, what the assessment process is like). One metric is whether women make up at least 30 percent of board positions, which “to some degree reflects where we are now” in terms of global process, Beyer said. The global standard on equal pay is being within a few percentage points of paying men and women the same for the same work.

To measure whether a given company is meeting these standards, company executives go through an assessment process with the NGO responsible for EDGE certification. That requires digging up and compiling a variety of human resources data and conducting employee surveys to find out how things are perceived on the ground. “There’s a really robust response on our surveys…because people are so interested in this topic,” Beyer said.

L’Oreal’s experience shows how intensive the process can be. Angela Guy, senior vice president of diversity & inclusion at L’Oreal USA, explained, “The certification process was extremely time-intensive and rigorous, required a high level of transparency, and involved numerous people at L’Oreal USA including the CEO, Office of Diversity & Inclusion, Legal, Human Resources, and Human Resource Information Services in compiling the data.” It took the company six months to go through the process of providing the necessary information and getting assessed. The company surveyed 3,000 of the 10,000 employees it has in the U.S. Then a third-party auditor spent two days at the company “interviewing executives, asking questions, reviewing materials, and evaluating practices, policies, and data against the survey results,” she said.

“Through that process, we were able to validate that the programs we have in place are delivering towards our ambitions of 50/50 gender balance and equal pay for equal work,” she said. L’Oreal already offers flexible working options, 13 weeks of paid maternity leave as well as some paternity leave and adoption assistance and leadership and mentoring programs and trainings for women.

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But the certification isn’t the end of the story. Companies are assessed every two years, and they have to hit two of the five global standards within six years.

A result of going through the certification process is that L’Oreal has “created a customized roadmap towards continued progress in gender equality,” the company said in a press release, “which includes a broader adoption of flexible work arrangements and continued development of leaders across both genders.” It’s also in the process of getting operations in seven other countries certified.

Ultimately, we want the certification to help us attract and retain the best talent — both women and men alike

Why go through all of this work? “This certification validates L’Oreal USA’s dedication to gender equality and acknowledges our transparency, accountability, and progress toward that goal,” Guy said. “EDGE certification shows our employees, our investors, and, yes, our customers, that L’Oreal is genuinely committed to the issue of gender equality, which is crucial to success in the global marketplace.”

One direct benefit it expects is a better ability to attract and retain top talent, particularly among women. “Ultimately, we want the certification to help us attract and retain the best talent — both women and men alike,” Guy said.

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While Beyer said the company hasn’t yet decided to brand its products with the EDGE seal, it does show up on job listings. “It very much helps you get most talented workers,” she added.

The publicity L’Oreal has gotten has also been “a side benefit,” Beyer said. Some companies are “looking for something to market to their customer base,” which is often women. “They want to do it as a way that is perceived as authentic, so they want to certify.” It’s something companies could use in advertising or branding to use as a “shorthand” for the fact that it values women’s equality, which could attract female consumers.

And if the project reaches a tipping point, a financial benefit could accrue to certified companies. EDGE Certification is in talks with Joseph Keefe and Sallie Krawcheck, who teamed up to create the Ellevate index fund focused on companies that have women in leadership. “They have committed to me that as soon as we get a critical mass [of certified companies], they’ll create an EDGE fund,” Beyers said. “They know like everyone else that just putting some women on your board does not guarantee you’re growing women leaders.”

The certification is still very new, so it’s a small group that have been stamped with the seal of approval: beyond L’Oreal USA, it includes Deloitte Switzerland, IKEA Switzerland, pharmaceutical company CEPD Poland, and banks Compartamos Banco Mexico and Lombard Odier Switzerland. “It’s so new that the first challenge is making sure everybody knows about it,” Beyer said. It’s trying to follow the lead of LEED certification, which is given to buildings that have a low environmental impact. “When LEED first started, no one knew what about it, but as it ramped up one company would do it, then another company,” she explained. There are now 60 companies in the process of getting EDGE assessed in 29 countries and 15 industries.

As can be seen from the list of currently certified companies, the idea has taken off the fastest in Switzerland, but Beyer says, “there will be many more American companies.” Right now EDGE is talking to “household name” tech and software companies, several multinational hotel chains, some fashion industry companies, and a large construction company.

L’Oreal wants to attract other American companies to the certification process. “L’Oreal USA is the first company in the US to be certified,” Guy said, “and we’re hoping our leadership will inspire others to support a gender balanced workplace.”