City Hive has confirmed it has launched its ACT framework – standing for Action, Challenge and Transparency – with founding signatories from groups representing $6.5trn in assets under management.
As outlined in the March issue of the ESG Clarity digital magazine, ACT is a standard that “enables a company to really look at where they might have gaps and to transparently report to professional fund investor,” City Hive CEO and founder Bhavini ‘Bev’ Shah, and member of the ESG Clarity Committee, said in the interview.
Companies will be able to demonstrate their movement towards being diverse, equitable and inclusive, and show alignment between external and internal values.
Using the three pillar structure, investors will be able to assess and measure their corporate culture, while fund selectors can use it as a core element of their research through a partnership with due diligence platform Door.
ACT three pillar framework
The 15 founding signatories to ACT are: Schroders, Lombard Odier Investment Management, M&G, Legal & General Investment Management, Aviva Investors, Mirabaud Investments, AssetCo, Federated Hermes, Capital Group, WHEB, BlueBay Asset Management, Radiant ESG, TT International Asset Management, Invesco and Snowball IM.
Shah told ESG Clarity in March: “The ACT framework enables a company to really look at where they might have gaps and to transparently report to professional fund investors. We have started to see manager research teams embed this into their research. For years they have tended to look at funds as a product, but it is actually much broader than that and a company’s culture impacts the underlying investment returns.
“With ACT, we are not looking to do analysis on the corporation, but help improve transparency and enable analysts to be able to look at this information and decide whether you are doing the right thing or not. It’s not City Hive telling you whether you are doing the right thing or not. We ourselves have our own biases in the way we look at things, so we want to be able to help all organisations regardless of size or legal structure to move in the right direction by letting your clients tell you whether that is right or wrong.”
Companies that complete the framework can publish the mark in annual financial reports, pay reports, and fund fact sheets to publicly demonstrate measurable developments in corporate culture. City hive said it is suitable for any size or type of firm regardless of global location or structure.
See also: – Quilter DEI head: ‘The industry is anti-diversity’
Shah added the ACT framework is guided by the a Stewardship Council of Investment Management stakeholders, which is responsible for ensuring the expectations of an entity’s values and behaviours are evolving meaningfully from talk to action and results over time, which is chaired by City Hive’s Shah, and chief strategist Mandy Kirby.
Kirby commented: “ACT is a unique tool the investment management industry can use to meet increasing scrutiny from regulators and investors head on. It measures authentic change rather than shiny metrics or polished promises – by ACTing, companies can give an assurance to all their stakeholders.
“Investors look at trends, make forecasts. To do this they need more than data, they also need to see a direction of travel. A company that can talk to stakeholders about how it has moved through the framework will give clients assurance of its commitment to progress that will ultimately lead to better outcomes for investment and people.”
Head of UK wholesale at Aviva Investors, a signatory to ACT, Apiramy Jeyarajah, said: “We are very pleased to support and be part of ACT, an important step towards building a more equitable and sustainable future for the investment management industry and our clients. Boosting diversity in a full and holistic manner is not simply a moral imperative; it is a commercial one. Institutional investors and consultants are looking for asset managers who consistently provide alpha generation and manage risk – with diversity of thought and idea generation among the criteria they consider.”
Bonhill’s Campaign for Better Governance, is run by ESG Clarity, International Adviser, Portfolio Adviser and DiversityQ to encourage the investment management community to consider it’s own governance at a time of increased scrutiny on ESG investing.