We recognise the existence of inequality and institutional racism across the world – we share the horror felt by so many as we have witnessed events that highlight the inequality, prejudice and sheer injustice faced by members of the black community the world over.
As we sit at our desks and analyse companies, we recognise we do not have all the answers on this issue. Indeed, we approach this issue with so much to learn, especially as it relates to the experiences of so many. These long-standing issues stem from a centuries-old and complex cultural and historical context. In some cases our team members have also experienced the unjust and unfair effects of racism, both in and outside the workplace. But this can only be an excuse for so long.
As investors, we have always favoured companies that understand the need to, and live by the principles of, operating in the right way. While this may sound vague, we know what it looks like. It is as simple as showing an open mind to diversity, through to more complicated matters of respecting all communities and supporting their advancement, not abusing minorities or human rights, as well as operating within an explicit or implicit licence to operate.
On top of that, it is about looking for companies that understand the links between poverty, disadvantage, accessibility to services, basic human rights and climate change. We have long sought out and invested in companies which build necessary goods and services, such as providing clean reliable water, sanitation, access to medicines and healthcare, and essentials, such as soap and personal care goods. Added to this in recent years are internet access, mobile telephony, clean electricity, basic banking services and micro insurance. Our hope is that our clients’ capital can support companies which sustain and advance the livelihoods of those most in need of these services and who face the greatest challenges, regardless of ethnicity.
Although this is an integral part of our investment philosophy, there is much more we can and should be doing to play our part in addressing racism and racial diversity.
We plan to:
- Educate ourselves better as investors and not shy away from the complex issues particularly around caste, ethnicity, Black Economic Empowerment (BEE), specific challenges faced by indigenous communities, as well as similarly localised issues of race. We will educate ourselves by listening, discussing, sharing, understanding, analysing and commissioning research where necessary.
- Engage more persistently on diversity in all forms with companies. For example, we have written to many companies about racial diversity on boards over the past 20 years, but we have not been active enough in following up or taking tough decisions. We need to work harder with the companies we invest in as genuine partners.
- Educate ourselves better as people. A few years ago every investment team team member took part in a two-day course on unconscious bias. It is time to revisit and challenge our biases as individuals.
- Stand firm and be prepared to call out racism when we see it. In the past, we may not have been firm enough on this issue. We will work towards a clear mechanism for identifying and addressing racial bias that allows us to engage with the relevant parties in a constructive manner. Often these parties are external, which creates its own challenges, but we need to learn how to overcome them.
Unequivocally it is time for change, and for us as an investment team, there is much we can and will be doing to play our part in this change.
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