“We have made considerable progress on gender equality, but I think that has to some extent been at the detriment of the same level of razor focus on issues to do with ethnicity and class,” Baig says.
Kimberley Lewis, who works for Federated Hermes’s stewardship and engagement unit EOS in London, agrees, saying the view among ESG investors that tackling obstacles to gender diversity will naturally pave the way for greater racial equality has yet to be proven.
A U.K. report published earlier this year by businessman Sir John Parker, EY and the government found that at least 31 companies in the FTSE 100 have zero board members from ethnic minorities. The report concluded that it “will be challenging” to meet a goal of having at least one director from an ethnic minority background on the boards of all FTSE 100 companies by 2021.
Patsky says Trillium, which was bought earlier this year by Australia’s Perpetual Ltd., is rarely asked about its own diversity and inclusion policies even as it continuously questions publicly listed corporations. To make up for lost ground, Patsky says his firm will be more aggressive in hiring minorities. Trillium recently recruited Lisa Hayles, who is Black, from Boston Common Asset Management to work with institutional clients.
Patsky said he plans to convey, both internally and externally, how Trillium recruits using the so-called Rooney rule, which requires the inclusion of a diverse slate of candidates for a given role.
According to the study by financial advisers and consultants, Black people account for 22% of firms’ workforce and boards that are run by people of color, and just 4% for the firms that are led by Whites, said the study, which looked at almost 700 employees, including board members, at 15 U.S.-based mutual fund groups.
Sonya Dreizler, one of the report’s authors, said she doesn’t buy the argument that the lack of diversity in corporate America is down to a “pipeline problem” -- a line often espoused by executives to explain why their workforces are mainly White.
“It’s a network problem,” said Dreizler, who runs the Solutions with Sonya consulting firm in San Francisco. “People mainly hire through their networks, and if your network is made up of white guys who you golf with, then you’re highly restricted.”
Parnassus Investments, which manages some of the U.S.’s biggest ESG-focused funds, is working on plans to “support topics related to racial diversity and inclusion,” Chief Marketing Officer Joe Sinha wrote in an email, adding that the head of the firm’s ESG group, Iyassu Essayas, is Black.
At Domini Impact Investments, whose founder Amy Domini is a pioneer of responsible investing, the company said it’s seeking to boost the diversity of its personnel. About 4% of Domini’s 26 employees are Black and about one-fifth are non-White.
This article was provided by Bloomberg News.