Climate Action Pursuit 2021

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For investors looking to truly address the economic effects brought on by social inequities, progress towards racial equity must be a key consideration in the investment approach. In this session, we will hear from an asset allocator, investment consultant, and asset manager who have made considerable strides in racial equity investing, spanning from enhancing diversity within their own institutions, investing with diverse founders, allocating to funds or businesses that focus on improving socio-economic outcomes for people of color, or engaging with companies on issues that relate to diversity, equity, and inclusion.

The panelists will walk participants through their own journeys providing concrete examples of what racial equity investing looks like, best practices that they have learned in their journey, and hurdles they had to overcome. We will also break out into smaller groups to discuss pain points and workshop your own racial diversity and equity plans. The purpose of this session is for participants to leave with a strong sense of what can be done as the next steps within their own organizations.

Resources:

• Due Diligence 2.0 Commitment 
• Adasina: Dismantling Systemic Barriers for Black Asset Managers

Some key takeaways from this session:

• There is no performance gap that explains the capital allocation gap to diverse managers. You can argue that asset owner portfolios are at a relative distangage if they’re not getting the representative allocation to top performing diverse managers. This is a social issue as well as an investment issue.
• To catalyze movement of capital to diverse managers, investors need to shift our due diligence processes to consider track record alternatives, expand what it means to work together ,reassess AUM as a risk metric, respect BIPOC time, contextualize fees, include historically unrecognized risks, be willing to go first, offer transparency about remaining hurdles, provide detailed feedback (more on these points on Due Diligence Commitment 2.0)  
• Asset owners and allocators need to take a multi-pronged approach such as looking at asset management firm’s diversity in ownership & leadership, commitment to the next generation pipeline building, and assets invested with diverse founders.