ESG investing in the US appears to be dragging its feet by comparison with the UK and the EU – at least that was what it seemed to us when the ESG Clarity editorial team travelled to the east coast last month to expand our reporting in the region. So, it was a surprise to find that in at least one area – diversity, equity and inclusion (DEI) – US investors and regulators appear to be ahead of the game.
Perhaps this shouldn’t be so surprising. Racial tensions, drastic wealth disparities and the lack of social safety nets make inequality in the country painfully evident, and therefore hard for companies and their investors to ignore. This has led to some progressive rulemaking and processes the UK and EU could, and has, learnt from.
For example, in ESG Clarity’s March magazine last year, also on diversity and inclusion, we reported how the Financial Conduct Authority (FCA) was planning to take a leaf out of the Securities and Exchange Commission’s (SEC) book and potentially require listed companies to have at least two diverse directors. Around the same time, the SEC’s Asset Management Advisory Committee was considering diversity disclosure from mutual funds, in part due to broad market and investor interest.
“In the US, we have seen the Nasdaq take the lead with its listing rules,” FCA CEO Nikhil Rathi said at the time, acknowledging the country’s preeminent role.
Read the full analysis in ESG Clarity’s March 2022 digital magazine