Diversity, equity and inclusion (DEI) investment strategies
DEI investing is high on investors’ agendas
As part of a wider strategy to invest sustainably, integrating a DEI lens into your decision-making process allows you to align your portfolios with your organisational mission and values. It also positions you to achieve long-term sustainable returns and help drive change that could ultimately benefit us all.
Research shows that organisations exhibiting strong DEI credentials perform better. It's clear that a more diverse, equitable and inclusive work environment boosts innovation.
DEI is an important consideration in any sustainable investment strategy, but key challenges remain. Performing all aspects of the investment process takes significant resources. In particular, it takes time to identify and gain access to the best DEI managers. This is where we can help.
Our proprietary research and deep analysis of DEI issues launched in 2007. Today, our approach in this area is designed to unearth the most compelling opportunities that will best suit your goals while promoting positive change. No matter where you are on your DEI investment journey, we can help you define what diversity means for your organisation. We can also show you how to integrate it within your portfolio and investment decision-making process.
Drivers behind the rise in DEI investments*
More than 29% of women-owned private equity firms are top-quartile performers.
More than 34% of minority-owned private equity firms are top-quartile performers.
Companies with higher-than-average diversity achieved 19% higher innovation revenues.
Companies in the top quartile for racial/ethnic diversity are 35% more likely to surpass their peers.
Companies in the top quartile for gender diversity are 15% more likely to surpass their peers.
Common challenges associated with DEI investing
Three steps to integrate DEI into your investment portfolio
Define what diversity means to youDiversity means different things to different investors, so the first step is to define what it means to you. We can help you understand the potential benefits and challenges linked to different DEI qualifiers. This will ensure your policy supports the direction you want to go without being too cumbersome or limiting to your portfolio. For example, some clients focus solely on the composition of a firm’s ownership, while others include the composition of key decision makers.
Build a process and planStep two is to define clear DEI investment goals, and the processes and procedures needed to support these goals. This often requires making changes to investment policy statements. For example, some clients use an actual percentage goal for capital committed to DEI managers, whereas others use broader guidance. It's also important to establish measurement mechanisms to evaluate and understand your progress towards your DEI goals.
Implement your planThere are hundreds of diverse-led funds in the market today. We conduct ongoing research to help you quickly understand the market, and we help you create customised searches to identify opportunities that fit your specific DEI criteria. Our dedicated DEI researchers provide curated manager expertise to help ensure you can execute your investment plans.
This content on this website is provided for informational purposes only and should not be taken as advice or recommendation to buy or sell any specific investment product or services, including Mercer’s investment management services, or to enter into any portfolio management mandate with Mercer.
Any investment carries inherent risks and you should carefully consider your own investment objectives, financial situation, and needs before making any investment decision.
Past performance is not an indication of future performance.