UBS WM's Jerome Cognet comments on diversity in the 'G' of ESG

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UBS WM's Jerome Cognet comments on diversity in the 'G' of ESG

Jerome Cognet, director investment specialist at UBS Wealth Management in France, recently was approached by InvestmentEurope for insight into how diversity should be considered part of governance issues - the 'G' part - addressed by ESG investing.

Cognet said that gender diversity is more than just a social issue, in that it also makes business sense.

"Insights from the field of social psychology find important benefits of diversity in group decision making processes," he said.

"Women in leadership broaden the diversity of skillsets and perspectives, and also influence the overall functioning of the boards and teams in which they operate."

"From an investors perspective, there is evidence that suggests that greater female representation is associated with higher profitability. We found that, in the US, Russell 1000 companies with women making up at least 20% of the board and senior management had higher profitability across various such as return on assets, return on invested capital, and return on equity, relative to their less gender-diverse peers. It means a company that hires the best people it can is more likely to be a well-run company."

"Investors should focus on gender diversity. Gender diversity is not more important than other forms of diversity. Gender diversity is a more easily measured form of diversity. Political and media attention often focuses on the number of women managers. This misses the point. A diverse company will have equal opportunities at all levels."

"According to our CIO Office, we implement in our stock selection three different approaches that investors can rely on to invest with a gender lens within listed financial markets. In practice, these are not mutually exclusive but rather can be combined: screening for companies based on their gender diversity performance, shareholder engagement on gender diversity, integrating gender diversity into a broader sustainable investing framework."

Diversity agenda

Cognet's comments come in context of InvestmentEurope's ongoing engagement on the diversity agenda.

The Women in Investment Awards Italy 2019 will take place on 2 October in Milan - http://events.investmenteurope.net/womenininvestment

Next year, a broader Women in Investment Festival is being supported in London on 3 March 2020 - https://womenininvestmentfestival.com/live/en/page/home