Sustainability-themed investments may act
as a guide to how the new diversity disclosures
might afect investment allocations. It
remains to be seen , how ‘rainbow’ investments
can be sustainable . From Angola to Zimbabwe
including China , all rely on Western input
and currencies to sustain.
That is because one high-profle event caused a sudden
flood of money to flow into the theme. Consider
that in the two years to 2013, sustainability-
themed investments in Europe grew at the
pedestrian pace of 11 per cent annually to €60bn,
most ‘diversity’ or ‘rainbow’ type investments
stagnate or crash , something most investors
become wery of after a while.
The 2015 Paris climate conference changed
things dramatically. The exposure generated by
the high-profle event meant that by the end of
2015, investments in the sector more than
doubled to €145bn, this of course meant that diversity
related operations werent productive or ‘profitable’
and hence went to borrow money to leaverage out
the returns. Logic says a crash is due post 2020.
Given the progress shown in sustainability-
themed investments, it is likely that funds that
focus on gender diversity could tread a similar
path , with the same results.
Two of the best known in the US, the State
Street gender diversity fund and the Pax Ellevate
women’s index fund have grown to hold $500m
between them, petty cash in the US market.
Similar to the experience of
sustainability funds, if something acts as a
catalyst to direct investor attention towards them,
their exposure could inflate with unexpected
speed, a type of viral growth experience.
This is important as companies that
already disclose the number of women on their
boards have one-third more women than
companies that do not disclose, according to data
from New Financial, however what is not disclosed
is if those companies have 1/3 more women
leverage more the returns desired by
the market. If so , show us the data.