AUM in Action

Call for Racial Equity Reporting in UK Finance Sector

Large UK-based investors with almost US$120 billion in assets have asked the Financial Conduct Authority (FCA) to introduce mandatory ethnicity pay gap reporting for financial institutions. Increased transparency around racial pay disparities would catalyse further action to create more equitable workplaces, they said. The group of ten investors coordinated by NGO ShareAction – including Nest, Brunel Pension Partnership, and Church of England Pensions Board – noted in their response to the FCA’s consultation on improving diversity and inclusion in the financial sector that Black, Asian and/or other ethnic minority staff only hold one in ten management positions in UK-based financial institutions, around half the level set by the FCA. The request follows a commitment made in 2018 to mandate ethnicity pay gap reporting, only for the government to note a preference for a voluntary code earlier this year. Kohinoor Choudhury, Senior Campaign Officer at ShareAction, said: “This is not just about fair pay, it is also about ensuring that our financial institutions adequately reflect the British society they are supposed to serve. The FCA should heed investors’ call for ethnicity pay gap reporting to be mandatory as a crucial first step to raising workforce standards across the sector.” Earlier this month, the 2023 Reboot Race to Equality Index found that average scores for diversity, equity and inclusion had dipped among UK financial services firms, prompting the group to call for greater c-suite leadership.

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