M&G launches a sustainable strategy with an impact allocation to address diversity and inclusion imbalances

2 min read 31 Jan 22

M&G is expanding its range of sustainable solutions with the launch of an equity strategy investing in companies demonstrating gender and ethnic diversity and those offering solutions driving greater social inclusion and equality, while seeking to deliver attractive investment returns.

Managed by Thembeka Stemela Dagbo and supported by John William Olsen, the global equity strategy has an hybrid approach incorporating sustainability and impact considerations into the stock selection process:

  • One part is invested in impactful companies providing solutions to empower social inclusion that assess stocks with the ‘III’ framework, assessing the Investment, Intention and Impact of each company, and classifying them as ‘pioneers’, ‘enablers’ and ‘leaders’.
  • The rest is allocated to sustainable companies demonstrating gender and ethnic diversity at work. The analysis goes beyond representation by extending the assessment of diversity to factors such as targets, processes and policies1. All stocks in this part of the portfolios must have a minimum of 30% women and/or ethnic minority representation at board level at the time of purchase and must pass the ‘E.Q.L’ framework, where the team assesses ESG credentials, quality of the business model and leadership characteristics of each stock. 

The strategy, which is supported by the M&G’s Stewardship & Sustainability team, embraces the United Nations Sustainable Development Goals (SDG) 2 framework. The strategy maps each holding to its prime or dominant SDG, focusing on six key areas: Quality Education, Gender Equality, Decent work and Economic Growth, Industry, Innovation and Infrastructure, Reduced Inequalities and Peace, Justice and Strong Institutions. M&G will annually report key diversity and impact indicator at stock level, stating their absolute level as well as their year on year change. 

Thembeka Stemela Dagbo, Portfolio manager, says: “Social inclusion and diversity are not only the right thing to do, they also make good economic sense. Left unaddressed, the exclusion of disadvantaged groups and the lack of diversity can be costly and result in lost GDP and human capital wealth, whereas pioneers of the diversity and inclusion initiatives are being increasingly recognised for their financial outperformance. Indeed, companies with top quartile levels of gender diversity are 25% more likely to outperform, and 36% more likely for ethnically diverse ones3. This strategy provides our customers with the opportunity to capitalize on these trends and address diversity imbalances while putting their savings to work with a purpose.”

Diversity and Inclusion strategy complements M&G’s existing range of impact and sustainable solutions.

1 Covering policies such as flexible working policies, parental leave, anti-harassment policies, strategy and pay gap reporting

2 While we support the UN SDGs, we are not associated with the UN and our funds are not endorsed by them.

3 Source: McKinsey & Co Diversity Wins Report

This financial promotion is issued by M&G International Investments S.A. Registered Office: 16, boulevard Royal, L2449, Luxembourg. 

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

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