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Most British firms track race, ethnicity data but targets still lacking - study

People sit alongside the bank of the River Thames with the City of London financial district in the background, in London

By Juliette Portala and Simon Jessop

LONDON (Reuters) - Nearly three-quarters of British firms are tracking race and ethnicity data, yet few have set targets to improve workplace equality or linked efforts to management pay, a survey by consulting firm Mercer showed on Tuesday.

Improving boardroom diversity has become a hot topic for policymakers and investors in recent years, as many believe it helps address social inequalities and leads to better corporate decision-making and performance over time.

A survey of 70 firms with a UK workforce of 65,000 and global headcount of more than 1 million people carried out in August showed more than half had felt pressure over the past two years to improve racial and ethnic diversity outcomes.

While 72% were collecting data, just over three-quarters were not publishing it and just one in three had set aspirational goals or targets to improve, Mercer said in the Overcoming Racial Inequities in UK Organisations Survey.

Of those employers to have set targets to improve, 69% had yet to link them to the short- or long-term incentive plan of leaders, it added.

On the issue of pay, 78% of those surveyed had not published ethnicity pay gap results, either internally or externally, Mercer said.

While investors are increasingly considering diversity metrics when assessing a company's management of environmental, social and governance (ESG) risks and opportunities, 16% of those surveyed said they saw no link between the two.

Of those that saw a connection to the 'social' pillar of ESG, 68% said they saw no connection to environmental or governance concerns.

"In practice, racial and ethnic equality should be a cornerstone of governance frameworks for policies, boards and metrics," the survey report said.

"If employers can begin to fully understand the relationship between ESG and racial and ethnic equality, this will help to move race and ethnicity up the agenda."

(Editing by Emelia Sithole-Matarise)