Why Investors Care About DEI: Investment Stewardship and Social Activism
20-minute Trend Talk
Day 3Session Code: TT6-C
When: April 7, 2022
Track: Social Responsibility
Presenters: Meredith Benton, Whistle Stop Capital | Jaylen Spann, Whistle Stop Capital
After the murder of George Floyd sparked protests throughout the country, companies pledged to combat racial inequities and donated millions of dollars to organizations combating racial injustice. These statements, however, have not always translated into in-house actions. For many investors, understanding the effectiveness of a company’s DEI program is not about social activism: it’s about investment stewardship. Strong DEI programs have been linked to share outperformance.
As well-known companies like Nike are being called out for performative giving, investors are concerned that the reputational and operational risks that come from misalignment between these pledges and actual company practices pose an uncompensated financial risk.
This session looks at how incongruencies in corporate practices and DEI commitments have been responded to by investors and provides some initial findings in corporate best practices in reporting and transparency.
• Understand the economic rationale driving investors’ interest in corporate DEI practices
• Learn some of the actions that investors have requested from companies
• Examine investors’ actions to encourage improved DEI programs