To help investors fully understand the developing ESG investment universe, Thomson Reuters has launched a Diversity & Inclusion Index.
The index ranks the top 100 publicly traded companies globally with the most diverse and inclusive workplaces, as measured by 24 metrics across four key categories: diversity, inclusion, people development and news controversies. The index is then calculated by weighing each metric based on importance in the market and how each company compares with its peers.
The ratings are supported by Thomson Reuters’ ESG data, designed to objectively measure the relative performance of more than 5,000 companies and provide clients with differentiated insight. Index scores are calculated for each company for the diversity, inclusion, people development and news controversy pillars.
Only companies with scores across all four pillars are assigned an overall score. The top 100 ranked companies with the best overall scores are selected for the index.
‘Not only is diversity and inclusion a strategic objective for Thomson Reuters internally, but it also represents another step forward in our commitment to partner with clients to develop best practices in this space,’ says Patsy Doerr, global head of corporate responsibility and inclusion at Thomson Reuters. ‘Diversity and inclusion mean fostering a culture where diversity of thought, style, experience and approach is valued and nurtured so innovation can thrive.’
Thomson Reuters worked with a number of investors to design the index in a way that would be useful to them as a data source. ‘The tool is designed for companies to increase where they are on the index and, most importantly, for investors to make decisions on which companies to invest in,’ adds Doerr.
She says that over the next two decades, 70 percent of all assets globally – around $70 tn – will be managed by women and millennials. ‘That means there is much more pressure on impact investing, whether that be diversity and inclusion, sustainability or a community approach – but this focus is coming,’ she explains. ‘It will change the financial services industry in terms of financial analysis expertise, people’s understanding of this area and their appreciation of it. And they will need these types of tools to make those decisions.’
Debra Walton, chief product & content officer for financial and risk at Thomson Reuters, adds: ‘We are in the middle of a historical shift in perspective that is affecting companies across the world and across industry boundaries. Diversity is becoming a performance issue, a growth engine.
‘Our research shows that companies that focus on ESG matters can have a stronger stock performance and better long-term profitability. For investors, looking beyond financial data is becoming more important.’
