Australian investors will soon have greater visibility of listed global companies that have progressive gender and diversity credentials baked into their business activities.
HSBC Asset Management is helping to back the launch of a new female-owned asset management firm, RadiantESG, which is co-founded by Heidi Ridley and Kathryn McDonald, former CEO and Head of Sustainable Investing at Rosenberg Equities respectively.
“We will have a mix of products and when it comes to diversity and gender that is very much baked into our stock picking,” says Ms McDonald. “We will consider if a company is helpful or harmful to women.”
RadiantESG will launch two investment strategies in the US later this year that select stocks based on companies with strong returns and those that are doing good things for women and the planet.
It comes as the global finance industry responds to increased awareness that women are becoming more vocal on gender issues, and active investors as female workforce participation grows and an intergenerational wealth transfer is set to largely benefit women over the coming decade.
Last month, Australian super fund Verve Super recently launched a gender equality index in the Australian market and other fund managers are also eyeing opportunities to target female investors through products that can make a positive social impact and help reduce gender inequalities highlighted in the quarterly Financy Women’s Index.
“I think it is very important that we see more of the investment community imploring more of the companies that they invest in to be more diverse,” says Ms McDonald. “We believe that better investment decisions are made when more women are at the table.
“The way that we invest is very true to that vision. We look for companies that have very women friendly workplaces, that look for risks in the workplace and that don’t just employ more women but actually nurture them into senior leadership.
“Women in their early 50s are deciding what to invest in and what to buy and that goes well beyond household items, by including women at the table and doing an examination of companies that have that creates a lot of economic opportunity and upside,” says Ms McDonald.
Australia is one of 3 key focus markets for RadiantESG (alongside the US and Canada), which will prove a timely opportunity for Australian institutional investors – particularly super funds – who are under pressure to deliver returns to members as the Your Future, Your Super bill kicks in and to deliver on important ESG and diversity metrics.
The announcement comes as the appetite for gender and diversity progressive investments grows among fund managers both in Australia and offshore.
Ms Ridley believes that many key decision-makers are starting to see the benefits that come with bringing more women to the table in respect to business and investments.
“The massive generation transfer of wealth will put more money into the hands of women in the decades ahead, which means that companies won’t be relevant if they don’t reflect that demographic in their workforce,” says Ms Ridley.
RadiantESG is hoping to make a play for everyday retail investors through its investment products and is keen to serve financial advisers and wealth managers via Australian distribution platforms.
RadiantESG Global Investors intends to launch the next phase of their growth later this year with two investment strategies anchored on its proprietary ‘Positive Change’ concept of ESG which captures ESG Leaders, ESG Evolvers and UNSDG-aligned companies. The strategies will aim to address shifts in demographics and growing demand for more sustainable investment solutions.
In 2020, HSBC Asset Management set out its strategy to shape the market for sustainable investing through leadership in policy and industry engagement, company engagement and by embedding ESG across its investment approach. HSBC Asset Management is supporting the transition overall and in climate critical sectors; creating innovative investment solutions to meet client investment and sustainability goals.