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Joe Hornyak
Former editor of Benefits and Pensions Monitor and founder of Joe Hornyak Communications
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Diversity On Investment Teams Improves Outcomes
Investment teams with a greater level of diversity lead to better investment outcomes, says WTW in ‘Diversity in the asset management industry: on the right track but at the wrong pace.’ Its data shows that investment teams in the top quartile of gender diversity outperform the bottom quartile by 45 basis points yearly in terms of net excess returns. The detailed diversity data has also been broken down by asset class and show equity and credit display a gender diversity premium of 46 basis points and 14 basis points yearly per annum, respectively. Additional data collated this year from over 400 asset management firms on diversity, equity, and inclusion (DEI) show that only 42 per cent of asset managers have any measurable objectives in their current DEI policy, while nearly half (49 per cent) have no targeted initiatives to attract more senior diverse talent. The results found no meaningful relationship between organizational size and greater diversity across ownership or senior leadership, indicating that while there may be a perception that larger firms are able to appoint specialist resources and implement more DEI policies and initiatives, this does not always translate into increased overall diversity. Chris Redmond, head of manager research at WTW, says, “We are hopeful that the truly extraordinary investment performance benefits linked to superior diversity can serve as a catalyst for acceleration. That is why we believe it is crucial to analyze the data on an ongoing basis to track where we are as an industry and to stimulate conversations; however, it is also important that we look beyond pure numbers to form a robust qualitative view on DEI and culture to really understand how each asset manager is progressing and how quickly targets can be reached.”
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OSFI Framework Is Climate Sensitive
Climate change and the global response to the threats it poses have the potential to significantly impact the safety and soundness of the Canadian financial system, says the Office of the Superintendent of Financial Institutions (OSFI). Its?‘Guideline B-15:?Climate Risk Management’ is its first prudential framework that is climate sensitive and recognizes the impact of climate change on managing risk in Canada’s financial system as it sets out its expectations for the management of climate-related risks. The guideline will be effective fiscal year-end 2024 for domestic systemically important banks and internationally active insurance groups (IAIGs) headquartered in Canada. “The final version of Guideline B-15 balances the concerns of stakeholders in all regions of Canada and remains in line with the expectations of global and domestic investors who fund Canadian federally regulated financial institutions,” says Peter Routledge, its superintendent. It intends to review and amend the guideline as practices and standards evolve. This includes considering updates when the International Sustainability Standard Board (ISSB) publishes its ‘Standard IFRS S2 Climate-related Disclosures.’
For details on these stories, visit www.bpmmagazine.com