CFA Institute has launched the UK edition of its voluntary Diversity, Equity and Inclusion (DEI) Code for the investment profession, designed to support organizations looking to accelerate change by promoting a commitment to DEI.
Signatory companies would commit to six metrics-based principles under the DEI Code, intended to enable greater integration of broader views of the best talent, with the aim of leading to better investment outcomes, better work environments and a cycle of positive changes for future generations.
Among the six principles, investment organizations are expected to expand the diverse talent pipeline, design and implement inclusive and equitable hiring and onboarding practices, and promote practices that reduce barriers to advancement. Organizations must also use their position and voice to promote DEI, improve DEI outcomes and increase measurable DEI results, the organization said.
“CFA Institute seeks to build a more representative and resilient industry, and we recognize that much more needs to be done in all aspects of DEI,” said Margaret Franklin, president and CEO of CFA Institute.
“We started our DEI code in the US and Canada, and our UK initiative is a recognition that DEI means different things to different people in different markets. I am proud that the CFA Institute hereby becomes the first signatory of the UK edition of the DEI Code.”
In addition to CFA Institute, asset manager PGIM was also announced as one of the first signatories to the code, with more to be announced in due course.
According to Sarah Maynard, global senior head of external diversity, equity and inclusion at the CFA Institute (pictured), the CFA has chosen not to simply replicate the North American DEI Code – launched last year and adopted by more than 160 investment organizations – due to the many differences in culture, in employment law and in definitions of what diversity and inclusion means, especially with regard to gender and other forms of identity.
That’s why the UK DEI Code embraces “British variations in demographics, culture and societal norms” and provides a structure that supports employers, DEI leaders and HR professionals in building “impactful and measurable DEI strategies.”
To design the UK DEI Code, the CFA Institute worked with CFA Society UK and a DEI Code (UK) Working Group, made up of UK investment and DEI leaders in the UK. Using the DEI code in North America as a basis, it was adapted to the specific challenges and opportunities associated with the UK market.
“In the working group, we focused a lot on encouraging signatories to raise their DEI ambitions, but without introducing a long list of prescriptive requirements,” said Lindsey Stewart (pictured left), CFA, director of investment stewardship research at Morningstar and leader of the working group.
“The code is designed to be scalable across a range of organizational sizes and structures, and particularly emphasizes the importance for signatories to demonstrate progress over time. The goal is a culture change, not checking the boxes.”
Signatories to the DEI Code will be required to provide a confidential progress report to the CFA Institute annually, using an accompanying reporting framework. This should include details on the company’s DEI strategy, policies, commitments and high-level objectives, as well as oversight of the governance process and an implementation plan to integrate DEI into the signatory organization’s people, processes and policies. In turn, the CFA Institute will report on sector-level statistics once a critical mass of signatories has been reached.
Signing organizations must comply with three key foundational reporting requirements within two years of signing the DEI Code. This includes establishing a governance process for senior leadership and oversight; formal, publicly available communications outlining the organization’s DEI strategy and high-level goals; and creating an implementation plan to integrate DEI into the signatory organization’s people, processes and policies.