Investment Management and Financial Services are historically white, male, and at times, stale, so building diverse teams in a systemically unequal industry requires a novel approach to recruitment.
Attracting a diverse candidate pool and establishing an equitable and inclusive selection process is not always easy but is a prerequisite of a diverse and inclusive organization. Greater diversity among sustainable investment teams is not just about sustainability professionals practising what they preach, but diversity of thought also delivers greater performance. Venture Capital firms that increased their proportion of female hires by 10% saw an increase in profitable exits by 9.7%.[1] More inclusive firms also make decisions quicker, implement them faster and execute them better.[2]
Acre has recently partnered with Inthallo in their search for an investment analyst. Inthallo suggested innovative new approaches to the search and selection process which gave Acre freedom to be experimental when selecting and interviewing, as well as the timing of candidate presentations.
Overcoming decades of inequality is not something that can be answered by a portion of the market in a short space of time but by best practices being agreed upon by key stakeholders. This article shares a couple of our key findings from the search and selection process with Inthallo in an effort to start a conversation and grow consensus within the sustainable finance and impact investment space.
Application Accessibility
Something seemingly obvious but often overlooked is the need to make the application and selection process as accessible as possible. In order to engage candidates from a broad range of backgrounds and experiences, the initial stage asked candidates to complete three 250 word cover letter questions, enabling those from outside the equity research sector to demonstrate their company analysis skills and interest in impact investment. Candidates were offered 72-hour windows to respond, so those with prior engagements were not disadvantaged. Acre and Inthallo then both marked these questions using a format, ensuring equality in the assessment of candidates and efficiency in the selection process. This method of evaluation ensures 50% of the candidates interviewed were from non-equity research, and therefore atypical, backgrounds.
Diversity, Equity and Inclusion (DEI) Disclosures
Voluntary DEI data disclosures through anonymous forms quantify how diverse (or not!) talent pools are, enabling hiring managers to compare the characteristics of a shortlist and the broader market. During a search there are three key DEI data points; market, long list and shortlist levels, monitoring KPIs across these levels flag areas for improvement while a search is ongoing. Market level data also highlights industry-wide areas for improvement enabling a firm to correct these imbalances by hiring more diverse talent at an earlier stage in their career and providing the evidence to support market-level initiatives.
2021 EDI Survey for Sustainable Finance & Impact Investment Professionals
In order to help further our understanding and develop a baseline understanding of today’s state of equity, diversity and inclusion within the Sustainable Finance market we have launched a first of its kind survey. Please reach out to George or another member of the team to discuss our findings.
[1]https://hbr.org/2018/07/the-other-diversity-dividend
[2]https://www.forbes.com/sites/forbescoachescouncil/2019/09/09/the-benefits-of-creating-a-diverse-workforce/?sh=2d7094e5140b
George is a consultant in the Sustainable Finance and Impact Investing team. He supports Acre to source exceptional talent in the Sustainable and Impact Investing sector. He has experience working with a range of Asset Managers, Consultancies, NGOs, Hedge Funds and PE Firms to source individuals who have the necessary core investment skills as well as subject matter expertise within sustainability/impact.
