In this article, part of ESG Clarity‘s outlook series, we asked investment professionals for their predictions on diversity themes for in 2021. Here, they share the topics they believe will be in focus and the steps companies need to take to ensure better opportunities for everyone.
Mandy Kirby, chief strategist at City Hive
Mandy Kirby, chief strategist at City Hive the network for change in the investment management industry in the UK, said last year has taught us companies have the ability to adapt quickly when pushed, and this year will be making sure this is not forgotten.
“Of the many lessons that we have taken away from 2020, knowing that we can we make pivotal changes to longstanding practice is an encouraging one when thinking about diversity and corporate culture,” she commented.
“The challenge to embed change is more important than ever in 2021, as the groups that experience the fallout from failures in diversity, equity and inclusion, such as those with primary caring responsibilities, are disproportionately affected by issues around furlough or flexible working needs.”
Of course, the impact of Covid-19 is still here and so are other global issues such as climate change and social mobility, Kirby pointed out, as she highlights more action is required from investment management companies.
“Big conversations about very human issues including climate, race, physical and mental health, diversity and workplace accessibility happened in 2020,” she said. “These issues will not go away and they will require a substantive response from the companies in our industry, which are failing to adequately tackle a lack of diversity and recognition of the societal importance of these topics.”
This means, she added more action in hiring, retention and development practices, more accountability from senior leaders, and “fewer hashtags”.
Furthermore, there needs to be a focus on an inclusive culture to future-proof the industry, and ensure we are attracting and retaining talent, while also best serving the current and future needs of clients and beneficiaries.
Kirby adds: “As there has been no industry standard or measurable way to address the lack of diversity in investment management and its consequences, we will be building our Action, Culture, Transparency kitemark through 2021. We hope there is more accountability on the horizon.”
Julie Bech and Audhild Aabø, portfolio managers of Nordea’s Global Gender Diversity strategy
Meanwhile, Julie Bech and Audhild Aabø, portfolio managers of Nordea’s Global Gender Diversity strategy, said like we have seen with environmental considerations, capital will become more readily available for companies leading the way in diversity.
“Again, more and more companies will realise this and intensify efforts to address this issue,” they said in a joint outlook note.
They also highlighted “we are a long way from gender parity” with even Scandinavia, a region often recognised for its high degree of gender diversity, still having a way to go.
One obstacle to be combatted, they said, is hidden biases where some unconscious attitudes can be extremely detrimental in the recruiting process, and ultimately lead to a lack of diversity.
Additionally, the Nordea managers said corporations often express difficulty in finding qualified candidates of the minority gender when recruiting for higher managerial positions. “This means we are losing valuable talent along the way. This is also reflected in in several studies, which show the percentage of women decreases each level up in the hierarchy.”
As a result, they hope companies increase focus on internal talent development, to ensure there are qualified candidates of both genders at each level of the hierarchy.
“We do believe corporations are starting to realise this and are implementing necessary changes. These are the companies we are looking to unearth,” they said.
Jane Daniel, global chief risk & compliance officer & I&D ambassador, Aegon Asset Management
The coming year will see a greater focus on racial diversity, predicted Jane Daniel, global chief risk & compliance officer and diversity and inclusion ambassador at Aegon Asset Management, after the Black Lives Matter movement brought these issues to the fore in 2020.
Daniel said the focus will be “ensuring an equal focus on inclusion as well as diversity – not just counting the numbers but making the numbers count.”
She also forecasts the collection of diversity data will be a hot topic for 2021 as while most companies collect gender diversity data, many do not go beyond that. “It is difficult to effect meaningful change without understanding the composition of the workforce,” she said.
One positive from last year was the acceleration in companies adapting to flexible working as many workforces switched to remote working in national and regional lockdowns.
“Whilst the global pandemic has created undoubted challenges and hardships it also brings opportunity,” said Daniel. “The conversation around creating agile work environments for example has leapfrogged hugely over the past nine months. The key will be to ensure we take the good lessons learnt and embed them into business as usual once the pandemic is over.”
Finally, she also hopes for shifts in attitudes across the industry.
“This year we hope to see a change in corporate attitudes, and in personal attitudes. Corporates after all are only a collection of individuals and making good decisions for society and people has certainly been front and central of our thoughts during the pandemic.,” said Daniel.