Until January 20, 2021, Condoleezza Rice will have been the highest-ranking African American woman to serve in the executive branch of the US government, having served as secretary of state from 2005 to 2009. With Kamala Harris’ assumption of the vice presidency in January and discussion of an African American man leading the Pentagon for the first time, extant gender and racial glass ceilings continue to shatter, prompting a pause to recognize progress in the pursuit of diversity. But for many investors, progress continues to be too slow. Investors often seek to represent the urgency for more progress on diversity, equity, and inclusion (DEI) in their portfolios, but what is possible to reflect investor concerns in these areas?
For those familiar with Aperio’s approach to customizing portfolios, you know that we talk about three tools that help reflect an investor’s values or mission in a portfolio: exclusions, tilting, and active ownership. Each of these offers opportunities to incorporate DEI into a portfolio. Depending on the priority of specific subtopics within DEI, different investors will select different issues to emphasize and different strategies as appropriate.
As an example, when thinking about diversity on boards of directors, we have options available using each of the three tools. Clients can exclude companies with no directors who are women or racial or ethnic minorities. Alternatively, they can choose strategies that will use percentages of directors as the basis for scoring companies and tilting toward those with better average scores. Or finally, SRI proxy voting promotes diverse boards by voting against measures that don’t promote having women and minorities serving. No single approach is right for everyone, and there are good arguments in favor of each approach and valid criticisms of the limitations of each, which may be why we have clients that use all of them.
Discrimination, inequity, and exclusion are the context within which much economic activity exists. When seeking to reflect DEI values in a portfolio, it may be appropriate to think broadly about the context of life for women and communities of color. Focusing only on percentages of women or minorities in specific job categories, or even in the total workforce of a company, may capture only a portion of the DEI landscape.
A specific part of the DEI conversation focuses on questions around racial justice. Topic areas that are frequent parts of conversations about appropriate exclusionary criteria when seeking to reflect racial justice concerns in a portfolio include predatory lending, private prisons, and civilian firearms. All have disproportionate impacts on communities of color. In addition, tobacco companies are sometimes accused of targeting communities of color and creating disproportionate health impacts for those communities. Each Aperio client considers which combination of these issues most reflects the racial justice concerns they have in making their decisions.
LGBTQ inclusion is another topic under the broad umbrella of DEI, and another area where more data would be helpful in better representing the issue in portfolio construction. Both exclusionary and tilting strategies are possible when seeking to reflect these issues in a portfolio. This is an area where we rely on nontraditional data sources, like advocacy organizations, to help fill gaps in ESG research. We use Human Rights Campaign (HRC) ratings of companies to assist with this topic area. Unfortunately, when using nontraditional data sets, we have to accept certain limitations. In this case, the HRC ratings are large-cap and US focused, constraining their application.
Diversity and justice issues are nuanced, and we do not seek to oversimplify. Our expectation is that we will all continue to learn more about these issues and how to evaluate them in publicly traded companies over the coming years and that available data will continue to improve. For these reasons, we describe customization of a portfolio as a journey. We seek to continue to engage with our clients to find the best way of reflecting the larger themes of diversity, equity, inclusion, and justice as each client thinks about them.
This material is provided for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are subject to change at any time without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations.
This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, any historical performance information of other investment vehicles or composite accounts managed by BlackRock, Inc. and/or its subsidiaries (together, “BlackRock”) included in this material is presented by way of example only. No representation is made that any performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example. Past performance is no guarantee of future results.
The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy.
Aperio is providing this link to a third-party website that displays a research report, article, webcast, video, or other content that we believe may be informational or educational for you. This linked content is presented by a source that we believe to be reliable, but we do not guarantee its accuracy or completeness, including any associated disclosures. Aperio has no control over the nature of the content on, or the availability of, this third-party website.
The inclusion of this link on our website also does not imply a recommendation or endorsement of any views expressed in such linked content and should not be considered: investment, tax, or legal advice; a solicitation; a recommendation of Aperio or any third-party’s services; or an offer to buy or sell any securities or related financial instruments in any jurisdiction.
Your subscription to the Aperio Blog has been confirmed. You will receive an email notification when a new blog is posted.
Your password is now updated.
Thank you for setting the security questions for your account.
User Must Be Logged In
You must be logged in to perform this action.
Invalid token. Please reload the page and try this action again.
You Currently Do Not Have Portal Access
You do not have access to the Aperio Client Portal.
Please note that if you just registered, it may take up to 24 hours after your registration form has been approved before you are able to log in.
That answer does not match our records. Note that responses to security questions are case sensitive. Please try again or contact Aperio at firstname.lastname@example.org or 415.339.4590.
Your portal user profile does not have provide access to this page. Please contact your administrator if you believe you have receieved this message in error.
Please select a request type.
Your account is temporarily locked because you repeatedly entered wrong answers to security question. Please try again in an hour.
There was an error sending the email to your new user. Please try again.
There was an error sending your email. Please try again.
There was an error sending the email to reset your password. Please try again.
There was an error sending the verification email for your portal account. Please press “Send Verification Email” to retry.
There was an error sending your Contact Us form to Aperio. Please try again.
Would you like to set up Multi-Factor Authentication (MFA) for your account? If yes, click here. If not, you are able to enable MFA for your account at anytime in your Profile by clicking Edit Profile.
With Multi-Factor Authentication (MFA), an extra layer of security is added to your account to prevent unauthorized users from logging in, even if they have your password. This extra security measure requires you to verify your identity using a randomized code we will send you each time you attempt to log in. MFA reduces the risk of unauthorized requests from your Aperio Client Portal account and provides extra security for your data.
You can choose to receive your security code through one of three ways: by text message/SMS, voice call, or the Okta Verify app. Through Aperio’s partnership with Okta, you can access their free Verify app to receive your MFA token on your Apple or Android device.
Are you sure you want to remove this factor from your account?
The factor has been successfully removed from your account.
You are enrolled in SMS MFA.
You are not enrolled in Text/SMS MFA. To learn how to enroll, click here.
To enroll in SMS MFA, please enter your mobile phone number.
Enter the code received on your mobile phone below.
You have successfully enrolled in SMS MFA.
This phone number was previously set up for SMS MFA for this account. The number and your portal account are now re-enrolled in SMS MFA. If this is incorrect, please contact Aperio at 415.339.4590.
You are enrolled in Voice Call MFA.
You are not enrolled in Voice MFA. To learn how to enroll, click here.
To enroll in Voice MFA, please enter your number and extension if applicable.
Enter the code from the automated voice call you just received.
You have successfully enrolled in Voice MFA.
You are enrolled in Okta Verify MFA.
You are not enrolled in Okta Verify MFA. To learn more on Okta Verify MFA, visit the Okta Verify enrollment guide here.
Please ensure you have downloaded the Okta Verify App prior to clicking Enroll.
After opening the Okta Verify App on your mobile device, press Add Account and scan the QR code shown on the screen. Enter the code shown in the app in the box below.
You have successfully enrolled in Okta Verify MFA.
Director of ESG/SRI Research (Salem, OR)
What are your key responsibilities? I work on the ESG/SRI team, performing two main functions: First, I collaborate with clients to develop a customized values policy document. This document serves as the road map for aligning their portfolios with their values on environmental, social, and governance (ESG) issues. Second, I stay on top of developments in the ESG research industry to understand what data are available to use in client portfolios.
Describe your key previous work experience. I have been in the ESG industry for more than 25 years. I started at the Investor Responsibility Research Center (IRRC) and held various roles—research analyst on military and political issues, director of the Environmental Information Service, and Vice President of Research and Operations. During that time, I served on the original steering committee of the Global Reporting Initiative (GRI), helping to develop standards for sustainability disclosure. More recently, I served as the Director of Research for IW Financial.
What is the most interesting aspect of the job to you? I enjoy working with our clients—to understand their values and worldviews and help create criteria that reflect those values in their investment portfolios. No two clients have exactly the same values, so every conversation is different.
Describe some noteworthy projects you have worked on that directly impact Aperio’s clients. I helped create the original SRI offerings available on the Aperio SRI/ESG Menu. These offerings can be an off-the-shelf solution for a client or the starting point for a more detailed conversation. I also helped create the online survey that we often use with clients to help identify the issues that matter most to them.
What do you like most about working at Aperio? I like talking with our clients about what matters most to them. These conversations can be incredibly personal. I often hear a cross section of world views that gives me a better understanding of humanity.
List any committees or organizations you are a member of outside Aperio. I serve on the board of directors for the Sustainable Investments Institute (Si2), a proxy research firm. I also serve in a number of church governance roles at the local, state, and regional levels.
What are some non-work-related things we should know about you? I’m a photographer, mostly nature and my kids’ sporting events. I also like to play—and create—board games.
What postsecondary degrees and/or professional certifications do you possess? BA from Johns Hopkins University; MA from George Washington University.
Until January 20, 2021, Condoleezza Rice will have been the highest-ranking African American woman to serve in the executive branch of the US government, having served as secretary of state from 2005 to 2009. With Kamala Harris’ assumption of the vice presidency...
Dear ESG Vendor: Having recently completed a comprehensive review of the ESG data offerings from most of the prominent ESG vendors, we want to share some of what we learned about the state of ESG research and data...
The national dialogue on racial inequality brought about by the death of George Floyd at the hands of Minneapolis police officers has resulted in more questions from Aperio’s clients: How can we reflect our concerns about racial inequality in our investments?...