This article first appeared in Investment Week, 28th September, 2020
The acronym ESG continues to be the most overused word by every firm in the investment management industry, with companies stating it is ingrained in their DNA as investors and employers.
However, I do not see many firms meeting their own sustainability responsibilities by prioritising diversity to create a more inclusive and equitable industry. It is just another form of greenwashing.
There has been a welcome increase in awareness through the #IAM, #BlackLivesMatter #TimesUp and #MeToo campaigns, but awareness does not equal action. To create impactful change, firms must make significant cultural changes, and that starts at the top. The lack of real, measurable results by investment managers demonstrates where diversity and inclusion sit in terms of importance.
Improving diversity, be it gender, ethnicity, LGBTQ+, education, socioeconomic, neurodiversity and so forth, should be embedded as a key business objective, not a nice-to-have once a year on International Women's Day or when there has been a gross injustice. Diversity and inclusion matter 365 days of the year and should be ingrained in every company's prudent, sustainable management.
CEOs and senior leaders talk the talk, but can any walk the walk? Purchasing tables at awards, sponsoring events/roundtables, posting on/during commemorative days/months and acting as signatories to doctrines highlighting their commitment to improving diversity within their own firms and across the industry, is not genuine. While these actions acknowledge awareness of D&I issues, they are not the solution. For example, annual gender pay gap figures do not show any genuine commitment to closing the gap. Firms need to make meaningful, impactful, systematic changes to their business objectives, culture, infrastructure, governance, recruitment processes and remuneration policies to ensure genuine outcomes. Moreover, there needs to be a genuine commitment from the top down.
At all career levels women and BAME talent are underrepresented and underpaid. Cultivating the future pipeline of talent while also retaining, empowering and encouraging existing diverse colleagues in our workforce is vital for brand, performance and revenue.
However, to create impactful change, investment and collaboration in achieving these goals is key. It is time for leadership from across the industry to acknowledge they cannot do this on their own. We need to work collectively to establish and create measurable results, catalyse the cultural change that is needed and start to embed diversity, inclusion and equality into business objectives. My many years as a fund selector taught me that the power of diverse thought and experience enhances investment performance.
If investment management firms and their leaders are going to say that they are practitioners of ESG and it is ingrained in their DNA, then they need to prioritise embedding diversity and inclusion into the their businesses properly to meet their sustainability responsibilities.
I founded City Hive because I was frustrated by the lack of diversity in the investment management industry and I wanted to challenge the sector to change.
This week is Diversity and Inclusion Week. Let us take real action together. We must be the change we want to see. Change is happening now.
PLEASE SIGN IN TO READ THIS ARTICLE