Addressing ethnic and racial diversity

The role of companies in addressing social and environmental issues is now an accepted – even expected – part of running a business.

This content is more than 6 months old now, please visit the news area of this site for more recent content

  1. Seb Beloe

If the last few months have shown us anything, it is that the role of companies in addressing social and environmental issues is now an accepted – even expected – part of running a business. Whatever we might feel about it, private companies are now routinely scrutinised on their position and approach to major social and environmental issues such as gender, COVID-19, climate change and most recently minority rights and race.

The death of George Floyd in Minneapolis at the end of May catalysed a global protest focused on incidents of police brutality against minority and particularly black minority communities. This campaign has subsequently expanded to consider the rights of Black Asian and Minority Ethnic (BAME) communities more generally.

This has prompted consideration of the role of the financial community in addressing racial diversity[1]. The sector itself has a poor track-record on diversity in all its guises, but particularly on racial diversity[2]. Some institutions have moved to increase diversity. BlackRock Inc., for example, has committed to increase its Black workforce by 30% by 2024 and double the proportion of senior leaders who are Black from the current 3% level.

Fiona Reynolds, the chief executive officer of the London-based Principles for Responsible Investment (PRI), has argued that the financial sector needs to do better itself in supporting racial diversity[3].

For asset managers like WHEB the issue has three main dimensions. The first two embody how we address racial diversity in our interactions with companies that we invest in, and the third focuses on how WHEB itself addresses the issue in our own business.

Diversity in product impact – WHEB’s Impact Engine

As clients will hopefully know, WHEB’s investment philosophy is squarely focused on companies that supply products and services that deliver clear positive social and environmental impact. At the heart of our investment process is our ‘impact engine’ that is designed to capture the multi-dimensional nature of this positive impact (see here on the WHEB website). One of these dimensions involves an assessment of who the customers are for the company’s products and services and how vulnerable or under-served they are. Healthcare products that are explicitly aimed at the elderly or young, for example, score more highly on this dimension than interventions that are undifferentiated and address the whole population.

Similarly, there is a clear focus on products and services that address underserved populations. For example, healthcare insurance businesses or providers of tertiary education that disproportionately benefit disadvantaged communities, including Black, Asian and minority ethnic communities are scored more highly than businesses that are focused on already well-served communities.

Centene, a US-based managed healthcare provider, is explicitly focused on providing healthcare insurance to poorer and underserved communities and therefore their services disproportionately benefit the African-American community in the US. Similarly, the WHEB strategy is invested in two tertiary education providers that also support underserved communities. One of the more recent investments in the strategy is in the US-based tertiary education provider Strategic Education. Strategic’s programmes are focused in particular on people who did not have the opportunity or financial means to continue their education after high-school. The majority of students are working adults who are returning to education in order to improve their career opportunities. 76% of students are female and 64% are people of colour[4]. The company also has a particular focus in providing support to Historically Black Colleges and Universities (HBCUs) in developing on-line education capabilities.

Diversity within investee companies

In recent years, WHEB has made diversity, and particularly gender diversity, a priority engagement issue with portfolio companies. There is evidence that addressing gender diversity also benefits other diverse groups as well[5]. However, it is clear from these engagements that many portfolio businesses consider the issue of diversity to extend well beyond gender to include other aspects of diversity including ethnic diversity as well as diversity of experience and culture. Two holdings, TE Connectivity and STERIS, both argued in recent exchanges that the composition of their Boards had been designed explicitly to address this wider definition of diversity. Both claim to have Boards of Directors that are more than 50% ‘diverse’. We will ensure that our engagement with portfolio companies addresses diversity in all its manifestations as a core objective.

WHEB and diversity

Like most of the UK’s financial services sector, WHEB still has work to do to address gender and racial diversity in our own business and operations. Fundamentally we embrace diversity, inclusion and equality as a core value. We also recognise that a business culture that allows minority groups to flourish is likely to be more successful over the long run. Our understanding of these issues has improved in recent years and is evident in the approach and composition of our employees and within our advisory bodies[6]. We remain committed to fostering further diversity throughout our direct operations as we continue to grow.

WHEB also remains very active in supporting greater diversity more broadly through our internship programme and participation in wider industry initiatives. For example, for the past five years we have worked with the Social Mobility Foundation[7] offering short internships to young men and women from diverse ethnic backgrounds to work at WHEB.

WHEB is also a founding corporate partner of City Hive which is an independent organisation working to create a more diverse, equitable and inclusive corporate culture within the investment management industry[8]. We know we don’t have all the answers. We are committed to educating ourselves through listening and working with City Hive and with the wider B Corporation network to identify ways that we can play a more proactive role in supporting diversity across all of our activities.

Seb Beloe is co-manager of the FP WHEB Sustainability Fund




[4] Strategic Education

[5] Perse. Comm. Bev Shah

[6] Including for example on WHEB’s indepedent Investment Advisory Committee.



This article, its contents and any related communication (altogether, the "Article":) is provided by WHEB Asset Management LLP ("WHEB Asset Management") and: (1) does not constitute or form part of any offer or invitation to buy or sell any security or investment, or any offer to perform any regulated and/or investment business including in the United States; (2) must not form the basis of any investment decision; (3) is not and should not be treated as investment advice, investment research or a research recommendation; and (4) may refer to and be affected by future events which may or may not happen. To the fullest extent permitted by applicable law, regulation and rule of regulatory body, WHEB Asset Management, and its directors, officers, employees, associates and agents accept no responsibility for, and shall have no liability for, any loss or damage caused to any person as a result of their reading or accessing the Article, however arising, including without limitation direct, indirect, special and consequential loss, and loss of profit.  The price of shares in the FP WHEB Sustainability Fund may increase or decrease and you may not get back the amount originally invested.  Past performance is not a guide to future returns. 

This article represents the views of the named author only, and not of Charles Stanley. Past performance is not a reliable guide to future returns. This website is not personal advice based on your circumstances. No news or research item is a personal recommendation to deal. Investment decisions in fund and other collective investments should only be made after reading the Key Investor Information Document or Key Information Document, Supplementary Information Document and Prospectus. If you are unsure of the suitability of your investment please seek professional advice.

More from author

  1. Seb Beloe

    Why 2021 will be such a critical year for the climate

    Date: 28th Jan 2021 17:24pm

    Climate change remained firmly on the agenda in 2020, but this year is shaping up to ...

  2. Seb Beloe

    Addressing ethnic and racial diversity

    Date: 30th Jul 2020 15:13pm

    The role of companies in addressing social and environmental issues is now an accepte...

Most read articles

  1. Addressing ethnic and racial diversity

    Getting to ‘net-zero’ emissions

    Date: 8th Feb 2021 11:18am

    A lively market in carbon offsets is developing, as the need for more renewable power...

  2. Addressing ethnic and racial diversity

    The implications of the year of ‘net zero’

    Date: 5th Feb 2021 12:05pm

    Joe Biden’s ‘Build Back Better’ plan means there will be major changes in the investm...

  3. Addressing ethnic and racial diversity

    Why 2021 will be such a critical year for the climate

    Date: 28th Jan 2021 17:24pm

    Climate change remained firmly on the agenda in 2020, but this year is shaping up to ...

Investment involves risk. You may get back less than invested.