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Finance failing in fight against racism

Lachlan Maddock
— 1 minute read

While protests continue across America and the world, the finance sector is failing to combat racism and inequality.

Efforts by corporations to promote their core values and diversity and inclusion programs fall “far short” of what is needed, according to Calvert Research.

“What good is it to live in a prosperous country when police forces routinely kill black people?” said CEO John Streur. “It is time for investors to recognise this issue for what it is: a system-wide failure that the US government is complicit in fostering and that violates the constitutional rights and human rights of black people. And let us call it what it is: racism.”

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Calvert will call on companies to accurately assess racial diversity within their company and make that information available to investors. Calvert has also called on companies to provide pay equity disclosure across race and gender and to use their power to drive public a conversation about systemic racism and police brutality. 

“Let us also be clear: This is an ESG problem,” Mr Streur said. “Responsible investors have come to trust environmental, social and governance (ESG) research and investment strategies to avoid investing in corporations that are lagging on taking needed action to address human rights violations and to take real action to drive needed change.

“As a group, we are failing to meet these needs.”

Goldman Sachs has announced that it is creating a fund to support organisations addressing racial injustice, structural inequality and economic disparity. The fund will be launched with US$10 million from Goldman Sachs Gives, a donor-advised fund. 

“We must stand up and support [organisations] dedicated to the fight for a more just and equitable society,” said CEO David Solomon. “To honor the legacies of George Floyd, Breonna Taylor and Ahmaud Arbery, we must all commit to help address the damage of generations of racism.”

 

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