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2020 has been described as the year few saw coming – a curveball, a wrecking force, the year that blindsided governments, businesses and individuals alike.
The pandemic pushed through innovation, technology adoption, and the need to think differently. There was an overwhelming requirement to avoid being constrained by what ‘used to be’ or ‘the way things have always been done’.
As British historian David Olusoga says, in 2020 the volume on everything in the world was turned to zero because of the pandemic and resulting lockdowns – and the underlying hum of society could finally be heard. The consequences of being able to discern this hum have been absolutely remarkable. In particular, 2020 was the year that the role of the ally became incredibly important in driving and delivering change in our society.
Taking action on climate and ESG
What has been done to combat Covid-19 – the sheer volume of resources, money and intellectual capital deployed – has been extraordinary and shows what the world can achieve when faced with a severe threat. Covid-19 has demonstrated that the co-ordinated global mobilisation of trillions of dollars to take on an issue is possible.
Imagine if even a fraction of this commitment was dedicated to, for example, combatting climate change. Suddenly, paradigm shifts and huge leaps become eminently possible. Every meeting I have with an asset manager now covers this topic (regardless of what was on the agenda). The industry seems to be finally listening, and responding.
Pension funds are leading the discussion, asking very direct (and sometimes difficult) questions to those who are managing the fund’s assets. You are seeing them act as true climate and ESG allies – being the drivers of change and helping to shape a society far beyond the discussion of investments or retirement savings.
A difficult conversation about race and diversity
A further area of change has been around the issue of representation. For years, the investment management industry has had a problem with diversity. For example, there are only 14 black portfolio managers: pick your statistic, but there is a problem.
I am now seeing firms within the investment management industry becoming allies. For example, more than 200 firms have backed the 100BlackInterns programme. The ask is simple: provide a paid internship for a minimum of six weeks in a front office/portfolio management role. The programme will run in summer 2021, and has now expanded to cover 20 sectors in the UK (10000BlackInterns), with the aim of delivering 10,000 internships for black candidates over five years.
The 100BlackInterns and 10000BlackInterns programmes are both examples of real, tangible change, with the investment management industry taking the lead.
Why this matters for savings and retirement
The pensions industry exists to help people have the money and financial resources they need to fund their retirement. I’d argue it is also our job to influence and shape the world that we (and those who we invest on behalf of) will live in, and to act as allies where we can to enact change.
Equally as important, we need to have a diverse set of individuals at the core of our industry, helping to make great decisions for those saving for their retirement.
I think we should embrace the opportunity to have the volume turned down for a few more months and listen to the underlying hum of society a bit closer. Being an ally is so powerful, and there are so many more issues that need to be addressed. I’ve just offered two examples that I’ve been lucky enough to be involved in. The big question is, when the volume does get turned up again, what will each of us be doing differently? I’ve got my list, but what’s on yours?