@Pixabay.

Fund managers need to focus on measurable outcomes, not just box-checking exercises when it comes to diversity, equity & inclusion (DEI). This was the analysis from UK investment platform Snowball, in its inaugural engagement survey. The results showed that the issue persists even at the ‘quality end’ of the impact investment sector.

The factors around this could be key for operations teams in fund management companies as the increasingly politicised world of DEI is in the news. Whether companies can or should pull back and what would happen if they did is something to consider. This could affect potential clients, regulatory compliance, and attractiveness to staff recruitment and retention.

The survey – conducted as part of Snowball’s fourth Impact Report – involved 60 questions. The results revealed some positives - it said that fund managers were treating climate-related matters with increasing seriousness. “Responsibility for climate initiatives is often delegated to specific individuals or teams, with close oversight from senior executives, committees, or boards to ensure accountability,” it said.

However, it added that progress on DEI was more sluggish and was part of a worrying trend especially as the backlash around DEI policies intensified. The survey found that although 92% of fund managers have a formal DEI policy in place, only 10% of senior team members come from minority backgrounds and only 28% of senior leaders of those companies were women.

“Embracing DEI isn’t about making concessions, it’s about unlocking untapped

potential, driving better decisions, and gaining a competitive edge.”

DEI has seen growth in its importance though this is often unlevel. It was revealed in March by a WTW survey of C-suite directors that DEI worries were now seen as a key reason for increased Directors and Officers (D&O) insurance. Specifically, new risks for directors and officers that were added to the survey this year included DEI and geopolitical risk.

“Both of these have immediately seen significant results, with DEI making its way into the top seven risks for some regions,” said Angus Duncan, Global D&O Coverage Specialist (ex NA), Willis, in the report.

In Snowball’s survey, they said these results “still compare[d] favourably with a report published by the British Private Equity & Venture Capital Association which found that only 12%of investment trust managers in the UK are women (the Association of Investment Companies, 2024)”.

It added that some European managers noted that GDPR regulations restrict them from collecting data on diversity characteristics beyond gender and nationality.

The survey highlighted the long-term industry implications of DEI despite current backlashes on both sides of the Atlantic. “DEI isn’t a fashion—it’s a commercial imperative,” said Daniela Barone Soares, CEO at Snowball. “Embracing DEI isn’t about making concessions, it’s about unlocking untapped potential, driving better decisions, and gaining a competitive edge.”

Barone Soares said more needed to be done to cement the practice into operational streams and educate and elucidate on its importance. “Despite the present political backlash, and even shifting policies, fund managers must see this moment as an opportunity to lead, not retreat. It’s not just where capital goes that matters but who controls it,” she said.

According to the survey, fund managers are making more initiatives to work on these issues.

“It’s commendable that managers are engaging, but the volume of

commitments can obscure what success looks like."

Twenty-three managers representing 27 funds had signed up to 42 standards and initiatives related to DEI, 19 related to net zero, and 23 related to nature and biodiversity.

However, it said, a key finding was the lack of correlation between DEI initiatives and outcomes.

Snowball said that any impact framework must prioritise “substance over external validation” to be successful and embedded in the sector. These programmes must emphasise tangible outcomes rather than “the accumulation of accreditations”. This includes:

• Maintaining open and regular dialogue with fund managers.
• Publishing transparent impact surveys beyond box-ticking exercises to examine culture, equity, and systemic change.
• Evaluating mainstream benchmarks and incorporating only those that align with Snowball’s impact goals.

“It’s commendable that managers are engaging with industry standards and certification schemes, but the sheer volume of commitments can obscure what real success looks like,” said Barone Soares.

“It’s crucial to focus not just on activities but on tangible outcomes.”

 

Please Sign In or Register to leave a Comment.