Masters letter November 2020

As autumn takes a full grip and Black History Month comes to a close, I wanted to share with you some thoughts. When I progressed to the role of Master in the summer, I noted that I wanted to continue the theme of diversity and inclusion pursued by my predecessors. To that end, I am delighted to share our involvement in an after-school pilot programme targeting socio-economically disadvantaged areas of our city launched recently by #Talkaboutblack. The Catalyst After School Program (CASP) aims to provide pupils attending schools from socio-economically disadvantaged areas with the aspiration, belief, drive and tools to develop a career in asset management.

The pilot has been launched in collaboration with Mulberry Academy Shoreditch and Mossbourne Community Academy, with the backing and support of the City of London Corporation, the Chartered Institute for Securities & Investment and the Diversity Project. We look forward to being hands-on and getting involved with the graduation ceremony for the 24 pupils next July, and offer sincere thanks to Gavin Lewis, MD at Blackrock, and Andrien Meyers, Honorary Diplomat and Common Councilman for their extraordinary effort in getting this off the ground.

On a similar theme, I wanted to share with you 3 guides that my own firm, Federated Hermes, has pulled together – Parent’s Guide to Black Lives Matter, An Ally’s Guide to Anti-Racism, and An LGBTQ+ Allies Guide. Many other firms will have their own versions, but in case not, I have found these to be particularly useful in pushing forward the inclusion agenda and commend them to you for your own use.

As part of my day job, I get to read plenty of research, and these days I must confess that it is rare that I come across something which really grabs my attention. Over the course of the last 30 years (my working life), I have read with interest several academic papers suggesting that women in finance were better risk takers than men. This is held to be especially true in times of crisis, where the calmer disposition of women meant that they were less prone to knee jerk reactions. All point to the commercial imperative of running businesses through a gender lens. The latest contribution to the field from Citi, titled ‘The Case for Holistic Investment in Girls’, is a fascinating addition to the literature. Existing research has leant heavily on the economic benefits of investing in girls from a siloed perspective, with a focus predominantly on education and health. It has been convincingly shown that economic returns improve at the individual, corporate and national GDP levels. This latest report goes further and argues that a ‘comprehensive and fully-costed series of interventions allowing economies to attain 100% upper secondary school completion rates for girls by 2030 could lift GDP in emerging economies by 10% on average’ (with further benefits thereafter) versus business as usual. With staggering results like these, what’s stopping us? As members of the Guild of Investment Management we have an opportunity to push both individually at our own firms as well as collectively across the industry.

I’ve thought for a while that Climate Change tends to hog all the attention (deservedly so!) and that the issue of Biodiversity Loss is relegated to our TV screens alone, but when more than half of global GDP (c.£32tn) depends on high-functioning biodiversity (and the risk of tipping points are rapidly increasing), you’d think that we might take more notice! Unlike other ‘goods’, ecosystems are not valued or traded in markets at a readily observable prices, so they tend to get taken for granted and are not monitored in a comprehensive way that improves our understanding of the issues at play. However, if I share with you that a report in the summer from the Dutch National Bank concluded that EUR510bn, or roughly 36% of all investments held by Dutch financial institutions alone, were highly or very highly dependent on one or more ecosystem services, I wonder if that would grab your attention?

In the UK, we have The Dasgupta Review, an independent, global review on the Economics of Biodiversity led by Professor Sir Partha Dasgupta (Frank Ramsey Professor Emeritus, University of Cambridge). Thus far they have published an interim report that sets out the approach they are taking, including the main economic and scientific concepts that will underpin the work. A comprehensive framework and recommended options for change will be covered in the final report later this year. I urge you to read the final report when it is published.

I look forward to pitting wits with as many of you as can make it in December’s quiz.

Take good care and stay safe,



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