KUALA LUMPUR (Nov 17): Asset owners are implementing initiatives that will shape equity and equality across the asset management industry, employing measures that track asset managers’ articulated mission and culture toward diversity and inclusion (D&I).

In a statement on Wednesday (Nov 17), Boston-based global research and consulting firm Cerulli Associates said about one-third (34%) of asset owners view this measure as the most important criteria used to evaluate managers on environment, social, and governance (ESG) offerings.

These were the findings in a new white paper, Diversity & Inclusion, authored by Cerulli Associates, compiled from interviews conducted from mid-July to mid-August 2021 with leading institutional asset owners and asset managers.

Cerulli said asset owners’ methods of evaluating and measuring diversity among third parties are continuously evolving, according to the findings.

As their methods evolve, they generally look to incorporate a deeper and more exhaustive analysis of diversity at third parties, it said.

Cerulli senior analyst James Tamposi said it is clear that asset owners place high importance on measuring D&I across the asset managers they work with, but developing an industry standard approach remains a challenge.

Tamposi said asset managers are also increasingly considering diversity when making vendor relationship decisions.

He said the research highlights specific efforts taken to measure D&I across trading firms, operational support providers, and companies used for ancillary activities.

“It also uncovers product development themes managers are exploring, which include gender (67%) and EEO diversity (60%).

“Product development initiatives pointed toward D&I as part of a larger emphasis on ESG are perhaps most salient for asset managers right now,” he said.

Tamposi said as managers revamp their focus, many are formalizing their approaches to promoting diversity internally, building systems, devoting resources, and developing processes meant to enhance and sustain efforts.

“Asset owners and managers need to invest in this initiative for the long term with continuous oversight of processes and results.

 “This inside-out approach will help organizations elevate viewpoints from diverse perspectives and could evolve into implementing measures to promote and sustain D&I across partners, peers, and other industry bodies,” he said.