{"id":16182,"date":"2025-06-04T13:55:24","date_gmt":"2025-06-04T13:55:24","guid":{"rendered":"https:\/\/finderica.com\/?p=16182"},"modified":"2025-06-04T13:55:24","modified_gmt":"2025-06-04T13:55:24","slug":"big-investors-want-dei-and-esg-so-what-will-companies-do-now","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=16182","title":{"rendered":"Big Investors Want DEI And ESG, So What Will Companies Do Now?"},"content":{"rendered":"\n
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Burning newspaper clipping about ESG (Environmental, Social and Governance), the modern trend in … More<\/span> responsible investment. Text was written from scratch by the photographer, who also did the design and took the photo, so this image is free of third-party copyright and may be used without restriction.<\/span><\/p>\n

<\/fbs-accordion>getty<\/small><\/figcaption><\/figure>\n

The Trump administration has taken sharp aim at curtailing two types of programs: diversity, equity, and inclusion, as well as environment, social, and governance. However, a new survey by Edelman Smithfield<\/a>, a PR firm specializing in financial markets, found that important investors in the U.S. and the rest of the world are showing growing support for both.<\/p>\n

Serious Financial Business<\/h2>\n

Many people might be wary of studies undertaken by a PR firm for good reason. Such a company\u2019s purpose is typically to support and promote its clients\u2019 interests. However, as the clients are broadly financial firms, many of which are in asset management, banking, private equity, insurance, and venture capital, a good number of their clientele are regularly responsible for investments, whether their own or their customers\u2019. Communication about the importance of DEI and ESG would make no sense if investors weren\u2019t interested in promoting such ideas.<\/p>\n

The presumption in this case is that the firm is delivering a message its clients want to see permeate. There were 400 respondents equally distributed across Australia, Bahrain, Canada, Egypt, France, Germany, Hong Kong, India, Japan, Kuwait, Oman, Saudi Arabia, Singapore, UAE, U.S., and the U.K. There are many countries not represented, including some with significant invested wealth \u2014 China, Qatar, Turkey, Norway, Hong Kong, and others. But business information is rarely perfect.<\/p>\n

Who The Investors Are And What\u2019s Important To Them<\/h2>\n

The breakout in terms of investor type is 22% family office (a form of private wealth), 21% pension funds, 14% sovereign wealth funds, 12% high net worth individuals or wealth managers for such individuals, 13% insurers, 9% foundations, and 9% endowments. They are considered limited partners because they invest in companies and funds, typically taking minority shares as someone else provides management.<\/p>\n

When deciding on which funds to invest in, here are the six most important factors other than financial returns:<\/p>\n

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  1. Positive public perception of the CEO (41%)<\/li>\n
  2. High-quality leadership team (40%)<\/li>\n
  3. Good reputation in the market (35%)<\/li>\n
  4. Healthy corporate culture (32%)<\/li>\n
  5. Diversity of senior management, part of DEI (30%)<\/li>\n
  6. Strong ESG program (28%)<\/li>\n<\/ol>\n

    Of the limited partners interviewed, 50% say that their ESG and DEI expectations increased since last year while 43% say their expectations remained stable and are \u201cstill important factors in GP evaluation.\u201d Also, although there is a \u201cshifting regulatory landscape\u201d in the U.S., 58% of LPs here say their ESG and DEI expectations increased.<\/p>\n

    A Stealth Investment Strategy<\/h2>\n

    There is a difference in how they want companies to communicate about DEI and ESG activities. Most want to hear through general partners\u2019 communications and not standalone reporting. About 27% want it \u201creflected subtly through case studies, leadership behavior, or cultural signals \u2014 without using explicit ESG\/DEI language.\u201d Another 27% want it \u201cframed through a financial\/material lens (e.g., risks, returns, value creation).\u201d And 25% want it \u201cintegrated into overall firm and portfolio updates.\u201d They also find ESG and DEI progress updates to be one of the most valuable aspects of annual general meetings.<\/p>\n

    Such investors won\u2019t be interested in DEI and ESG as showpieces to feel better about themselves. These are hardcore, disciplined investors who don\u2019t have time for games. They have to produce solid returns, and they will make their interests known to their investments.<\/p>\n

    The path they seem to be taking is one where the language of DEI and ESG may be softened or disguised to avoid protests or conflict, but where they seek the results. That may explain why many companies seem to be dropping explicit discussions of either framework. The ones in the U.S. are trying to avoid attracting attention from the White House while satisfying the investors, who are ultimately more important to them.<\/p>\n<\/div>\n

    Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Burning newspaper clipping about ESG (Environmental, Social and Governance), the modern trend in … More responsible investment. Text was written from scratch by the photographer, who also did the design and took the photo, so this image is free of third-party copyright and may be used without restriction. getty The Trump administration has taken sharp<\/p>\n","protected":false},"author":1,"featured_media":16183,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[242,407,4927,60,81],"class_list":{"0":"post-16182","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-big","9":"tag-companies","10":"tag-dei","11":"tag-esg","12":"tag-investors"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16182","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16182"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16182\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/16183"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16182"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16182"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16182"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}