CFA launches DEI Code for US and Canadian investment profession

The CFA Institute has launched a voluntary Diversity, Equity and Inclusion Code (DEI) for the investment profession in the US and Canada in a bid to drive cultural change.

The global association of investment professionals, which has become the first signatory to the new code, expects the code to commit institutions to greater DEI-related action, in turn increasing the inclusion of “wider viewpoints” for better investment outcomes and to improve working environments.

Signatories to the voluntary code will agree to six metrics-based principles.

Three of the principles focus on company practices, including expanding the diverse talent pipeline (‘Pipeline’), designing, implementing and maintaining inclusive and equitable hiring and onboarding practices (‘Talent Acquisition’), as well as inclusive and equitable promotion and retention practices (‘Promotion and Retention’).

Two of the principles focus on a company’s actions within the wider industry, including using their position and voice to promote and improve DEI in the investment industry (‘Leadership’), as well as to promote and increase measurable DEI results in the industry (‘Influence’).

The final principle signatories agree to is to measure and regularly report on DEI progress and DEI metrics within their firms (‘Measurement’).

Under the code, signatories also commit to submitting an annual progress report to the CFA Institute, and within two years of signing up to the code, must have an adopted DEI policy and statement, an established senior leadership ownership and oversight governance process, and an implementation plan to integrate DEI within the signatory’s people processes and policies.

Margaret Franklin, president and CEO of the CFA Institute, said: “To build an industry that is more representative and resilient, far more needs to be done across all aspects of DEI.

“We recognize that the words diversity, equity, and inclusion mean different things to different people, and each part of the globe may be in a different stage of the DEI effort. We aspire to bring more markets into this work, but we have started in the US and Canada to ground our efforts and to provide us with a path forward.”

She added: “The DEI Code results from industry collaboration that has brought forth strategies that can enable the necessary cultural change within firms.”

Recently, the United Nations (UN) Principles for Responsible Investment (PRI) published a paper urging investors to integrate DEI into investment decisions. UNPRI also called on investment firms to “lead by example” and address DEI in their own organizations.