In the second of a two-part Q&A with Private Equity Law Report, R&G Insights Lab managing principal and head of innovation, Zachary Coseglia, and partner and global head of the ESG, CSR, and business and human rights practice, Michael Littenberg, discussed the racial equity audit process for a PE sponsor’s portfolio companies.

In the Q&A, Zachary and Michael break down the five key elements of racial equity audits to bolster a company’s DEI efforts: define the goals scope, and breadth of the review; communicate plans to all stakeholders; collect data on values, DEI maturity, and demographics; analyze the data to develop “digestible,” data-driven reports; and create an action plan.

Once an audit is complete, “our focus is really on ensuring that companies pick the right changes that will actually help them achieve their intended outcome,” Zachary said.

“It’s also worth noting that we iterate the recommendations with internal stakeholders at companies rather than delivering a final report like Moses coming down from the mountain with the Ten Commandments. When consultants just deliver reports that are not prepared in collaboration with companies, often those gather dust and never achieve the goals of the exercise,” Michael added.

Part one of the Q&A series addressed the purpose and future trends of racial equity audits in the private equity industry.

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Source: Ropes & Gray