A coalition of institutional investors has urged UK businesses to affirm their commitment to diversity, equity, and inclusion (DEI).
In a statement signed by 19 institutional investors managing nearly £500bn, they have argued that rolling back DEI efforts risks not only social progress but long-term business performance, stressing the financial case for inclusive workplaces.
Signatories include NEST, the UK’s largest workplace pension scheme, London CIV, Strathclyde Pension Fund, Rathbones Investment Management, Sarasin & Partners, Scottish Widows, among others.
Coordinated by responsible investment NGO ShareAction, the statement asks firms to restate their commitment to removing barriers for underrepresented groups, in response to recent political and legal challenges to DEI, particularly in the US, but also from a vocal minority in the UK.
Kohinoor Choudhury, campaigns manager at ShareAction, said: “This year we’ve seen some companies rebrand or roll back their inclusion initiatives, whilst others have gone quiet or suspended these activities altogether.
“Today, investors are calling on businesses to make clear that they will continue to ensure all their staff feel supported and included at work, and that talent is recognised regardless of background.”
The statement highlights the growing business case for DEI, with studies showing that businesses that value and support DEI outperform their less diverse peers, with benefits including increased innovation, reduced turnover and more motivated workforces, according to ShareAction.
“Belonging is not a luxury, and levelling the playing field is a good thing for business and society. Shareholders taking a responsible investment approach want to see that the companies they invest in remain committed to this goal,” Choudhury added.
In April, the UK’s leading authority on employment law, the Employment Lawyers Association, stated that British companies could even open themselves up to discrimination claims if they follow their US counterparts in dismantling policies designed to enable DEI.
The statement comes as DEI policies have emerged as a key battleground during this year’s AGM season.
Furthermore, the UK government is currently exploring how to implement mandatory ethnicity and disability pay gap reporting for large employers in the UK.
Speaking to IPE earlier this year, Lindsey Stewart, director of stewardship research and policy at Morningstar Sustainalytics, said: “For the first time, we’re actually seeing them [activists] openly call for the cessation of these [DEI] activities.”
His comments come as the ‘war’ on DEI policies by the Trump administration has further emboldened so-called ‘anti woke’ activists.
However, these anti-DEI proposals have so far received low shareholder support, despite mounting political pressure.
The full list of investors signed on to the statement are: Aequo, Barrow Cadbury Trust, Castlefield Investment Partners, Cripplegate Foundation, Friends Provident Foundation, Greenbank Investments, Investor Advocates for Social Justice, Jesuits in Britain, KLP Kapitalforvaltning, London CIV, NEI Investments, NEST, Rathbones Investment Management, Sarasin & Partners, Scottish Widows, Social Governance Solutions, Strathclyde Pension Fund, Trillium Asset Management, and Trust for London.
The latest digital edition of IPE’s magazine is now available
