Feature – Diversity
There is no quick fix to improving corporate diversity, finds Andrew Holt.
Within the ESG debate there is an on-going discussion about whether investors should take a divestment stance or focus on engagement. This dilemma was a hot topic at portfolio institu- tional’s inaugural Diversity Webinar in November. “Divestment is something we see a lot of in the ESG sector and on climate change – should you divest, just divest from fossil fuels or engage with companies?” said Lasyas Shekaran, an investment consultant at Lane Clark & Peacock, when identify- ing the parallel between ESG and diversity narratives. “Most of the research points to engagement being the first step, because then you have the ability to change things, to help turn the big emitters around. Whereas, if you just divested from them, nothing would change,” she added. But Shekaran noted that there needs to be a divestment threat when it comes to diversity issues. “Engagement is an impor- tant first step, but the threat of divestment needs to be real for them to do something about it. They need to see that if they carry on with their practices the way they are, we will not con- tinue to invest with them. It is a business risk – and that leads to financial risk.” Geri McMahon, a partner and co-head of responsible invest- ment at Aon, agreed with engaging as a first step and that a potential divestment could be a useful tactic. “Investors are in a real position of influence to make a significant contribution towards driving change. Engagement cannot be indefinite,” she added. “There needs to be monitoring and a consequence for a lack of progress.”
Early days But Helen Price, head of stewardship at Brunel Pension Part- nership, calls for a different approach. “It is still early days in our discussions around diversity,” she said, “and we do not have the data needed to make a proper assessment of where we are at. So, it is far too early to start talking about divestment in this area.
“There are actions we can take to seek improvement,” she added. “We have seen a ramping up of engagement. Over the past year we have seen a lot of shareholder resolutions filed requesting diversity information to be disclosed. We have also seen requests on remuneration and the objectives of senior management. So, it will evolve over time.” Adding another more subjective dimension, Shekaran said: “On a personal level, if I knew my pension was invested in a company that had a history of sexual harassment, racism or transphobia, I would not want my money to be invested there.” But she added that a sense of realism was also needed. “If we decided to divest from every company that didn’t have the best equality practices or a diverse representation, there wouldn’t be anything left to invest in.
Issue 109 | December-January 2022 | portfolio institutional | 43
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
