Over the past decade, diversity and inclusion have travelled from the margins of HR policy into the centre of corporate strategy. What began as a values-led conversation is now being recognised as a measurable contributor to resilience, innovation and long-term returns. One of the clearest signals of that shift came from an unlikely source. In 2020, during an OECD event on pension investing, a senior Trump administration representative linked workforce diversity to ESG outcomes and fiduciary responsibility. Whatever your politics, that moment marked the point where inclusion stopped being framed as a social obligation and started being treated as a business variable.
That reframing matters for UK employers, trustees and benefits teams. Diversity is no longer a culture line in an annual report. It is now tied directly to risk management, governance quality and long-term organisational value. In other words: ignoring it is no longer safe, defensible or commercially neutral.
When diversity becomes governance
For years, diversity was siloed inside HR. But once investors, regulators and boards began asking for workforce data as part of ESG disclosures, it moved into the realm of corporate accountability. Inclusion is now discussed in the same breath as climate risk, pay equity and board oversight. It is no longer just about who is hired, but how decisions are made, whose perspectives are present, and how that affects performance.
The evidence is mounting. McKinsey has repeatedly shown that companies in the top quartile for ethnic and gender diversity outperform their peers on profitability. Mercer links inclusive cultures to higher retention and stronger wellbeing outcomes. At mallowstreet, we see the same pattern in the pensions sector. Schemes and advisory firms that prioritise diversity and wellbeing consistently report higher trust levels, better engagement and stronger resilience. Culture is not a soft metric. It is a leading indicator.
Fiduciary duty now includes human capital
This shift is particularly relevant for organisations already adapting to ESG reporting and Consumer Duty expectations. If diversity influences performance, then it influences risk. And if it influences risk, it sits firmly inside fiduciary responsibility. A board that fails to consider workforce representation is not just behind the curve; it is operating with blind spots.
That is why more trustee boards and investment committees are beginning to treat diversity as a governance factor rather than a recruitment one. Representation alone is not the goal. The goal is better oversight, better decision-making and better outcomes for the people a scheme exists to serve.
HR and benefits teams are now ESG stewards
The people with the clearest line of sight on this are often HR, reward and benefits leaders. They hold the data that shows whether a culture is genuinely inclusive or only branded that way. They understand how representation links to pay equity, retention, wellbeing and leadership development. And increasingly, they are the ones being asked to demonstrate how the social dimension of ESG shows up in practice, not policy.
The most forward-thinking employers are treating inclusion as a governance variable they can measure and improve, not a branding exercise. They are publishing clear data, aligning benefits with lived experience, and viewing diversity as a resilience asset rather than a compliance burden.
The 10,000 Interns Foundation example
I see the reality of this shift through my role on the board of The 10,000 Interns Foundation. What began as a sector-specific initiative in financial services quickly grew into a national movement. The original mission started with the 100 Black Interns Programme -asking the question, could we employ 100 young talented for Black students and graduates? The first year was a huge success, running more than 500 internships with 200 employers.
The mission expanded to create the 10,000 Interns Foundation, with the simple goal of creating 10,000 paid internships for Black students and graduates across 25 sectors in five years. In 2025, we achieved exactly what we set out to do and exceeded it. More than 10,000 opportunities have now been created across 35 sectors, making the organisation the UK’s fastest-growing pipeline of Black talent.
It is one of the most meaningful pieces of work I have been involved in, not only because of the placements themselves but because of what follows. True progress is not just scale, it is durability. That is why the Foundation now focuses on data-led insight, employer training, mentoring, and an alumni network to turn early access into long-term inclusion. The talent exists. The demand exists. The question is whether organisations are designed to convert opportunity into progression.
A call to action
The organisations that will lead the next decade will be those that understand that diversity is not an HR project but part of the organisational infrastructure that protects long-term value. ESG maturity depends on human maturity. Culture is a performance system. Representation is a risk control. Inclusion is a strategic resource.
The question is no longer whether diversity belongs in ESG. The question is whether leaders are prepared to treat it with the same seriousness as every other driver of performance, trust and growth.
