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What is the PRI's influence on financial markets?
122 Plays4 months ago
Join us as we interview David Atkin from the PRI to discuss it's influence on financial markets. Discover how the UN Principles for Responsible Investment (PRI) is transforming the financial landscape with over 5,000 signatories managing $121 trillion in assets, integrating environmental, social, and governance (ESG) factors into investment decisions.
Alpha Females Invest is a financial investing podcast. With a blend of unique perspectives from both buy and sell sides of the market, we delve into insightful conversations with industry experts from the Australian finance sector.
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Disclaimer: The views expressed in this podcast are those of the speaker. The content in this episode is general in nature, and is for informational purposes only. It should not be construed as financial advice, it has not taken into account your personal financial position or objectives. Listeners are encouraged to seek professional guidance or conduct their own research before making any financial decisions. Please refer to a licensed adviser or tax agent and always read the relevant PDS for full product details. The views and opinions expressed on the podcast do not necessarily reflect those of Alpha Females Invest or its affiliates.
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Transcript
Introduction and Disclaimer
00:00:00
Speaker
As usual, any information discussed in this podcast is not financial advice. All opinions reflect those of the individuals and this podcast is for educational purposes only. You should always read the PDS and talk to a financial advisor who can consider your personal circumstances before you invest. If you like listening to Alpha Females Invest, we would love your support on Instagram, at alphafemalsinvest, and you can also find us on LinkedIn. And if you do want to find out more information about us and our episodes, you can visit our website at alphafemalsinvest.com.au, and please note that episodes may be supported by guests from time to time.
Hosts and Podcast Theme
00:00:40
Speaker
Welcome back to Alpha Female's Invest podcast. Two females working in the finance industry searching for Alpha. My name is Emily. And my name is Maddie. And together we delve into insightful conversations with industry experts from the Australian and global financial sector.
Guest Introduction: David Atkin
00:00:57
Speaker
Joining us on the show today is David Atkin, who is CEO of the UNPRI, or the Principles of Responsible Investment, which is the world's leading proponent of responsible investment. It is more than 5,000 signatories who collectively represent over US $121 trillion dollars in assets under management. David is responsible for the PRI's global operations. Before this, David served as the Deputy CEO for AMP Capital and spent almost 13 years as the CEO for CBOS Superannuation Fund.
00:01:30
Speaker
David has received the Distinguished Alumni Award from La Trobe University for his work in the sustainable finance field, was awarded the Fund Executives Association Fund Executive the of the Year in 2017, and was presented with an Association of Superannuation Funds of Australia Life Membership in 2020.
Engagement and Personal Anecdote
00:01:50
Speaker
It's certainly a very impressive CV, and we are so excited to have a fellow Aussie with such a global platform joining us on the show. It's great to have you, David. Thanks, Matty. Terrific to be able to join both of you today. So to kick us off, David, we do like to start the show in the same way in each episode. And we were hoping you might be able to share with us a embarrassing career moment that you've you've had over your years of experience. Yeah, thank you for that. There's so many. So I was trying to work out which one I was happy to share.
00:02:23
Speaker
um if so it probably would be a little comical but there's been a soccer game that's been a lunchtime event that's been going for 20 years back in Australia in Melbourne where I worked and I'm not a very good soccer player, football player if you're here in England, um but very enthusiastic. Anyway, um one day I tore my hamstring, it was the most painful experience I've had. I basically just dropped to the ground and I had to have the ambulance come onto the fields in the park opposite my work, come and take me away. And I had all of my staff who were in the building next door looking down at their CEO being dragged off.
00:03:14
Speaker
me and my stretcher to the to the opioids. So that wasn't, you know, that that was extremely painful, but quite embarrassing. But yeah, so that's that's my story for for today's session. Thanks David, very memorable. And I'm glad to see that it seems like you've made a full recovery from that hamstring incident.
History and Vision of PRI
00:03:40
Speaker
um Good to hear. David, maybe for the benefit of the audience and those who might not be too familiar with the PRI, would you could you please provide us with a quick overview of what it is and its vision? Yeah. So look the PRI was launched in 2006 by you and General Secretary Kofi Annan at the New York Stock Exchange. And it's a set six principles that are basically um on the basis that investors recognize that
00:04:13
Speaker
there are these additional information points that are important to making good investment decisions and that's around environment, social and governance, so ESG issues. So the principles that secretaries sign up to or investors sign up to say that you will look to develop ways in which you can um improve your decision making by gathering ESG information, that you'll be active in your um in your so being a secretary to to the PRI, so you'll work with others, um that you will be transparent about your activities, that you will report on your progress.
00:04:56
Speaker
um so These principles have been a bottom up response from the investment community around a recognition that you know there was new ways in which you could make better decisions. And as they say, from little things, big things grow. Because this was a niche idea back in 2006. There were about 30 investors that were there for the launch. um And as you said in the introduction, we've now grown to over 5,000. So which we're now represented in more than 100 countries, and it represents just over half the institutional capital out there that's signed up to the principles.
00:05:41
Speaker
So that's that's in effect what the PRI's principles are. And I guess the thing that we do, we're an association, we're here to help our signatories improve their own practices.
Career Path and Industry Changes
00:05:55
Speaker
And we're also here to provide opportunities, signatures to work together on on the areas of collaborative interest like climate or human rights, governance. And then we're also here to seek to improve the way the policy settings have been put in place around the globe on responsible investment. I'll stop there. I'm sure I've gone on far too long on that introductory question.
00:06:26
Speaker
that's That's a fantastic overview. I think it's an astonishing amount of growth that has been experienced in the PRI, and I think that's led to some really important implications for its importance on a global scale to to managers of money. and we'll and and even broader than that now. So well we'll wanting to dive back into that shortly, but firstly, I did just wanna touch on your personal career and your journey in finance and how you ended up in a role within the PRI.
PRI Growth and Expansion
00:06:55
Speaker
It's obviously, um I guess once was considered a niche now that it's kind of 50% of institutional capital as you you imply, you know it's not really a niche anymore, but interested to see how your journey led you led you to a role at PRI.
00:07:10
Speaker
Yeah, look so um I was very fortunate to come into the superannuation industry when it was still quite a cottage industry and so there was a lot of and The organisation was small. I started as the marketing manager for STA, which was one of the precursor funds to Australian Super. It had 20 staff, 500,000 members, 3 billion under assets. That fund is now, I don't know, 350 billion to 3 million, two and two and a half thousand of staff around the world.
00:07:43
Speaker
But the point is when when I started, everyone had to do a little bit of everything. And I got to learn about investments. And at that point, SRI investing was becoming more of the flavour of the day. And we did a lot of consumer research around um our members' interest in having an investment option on SRI, justable responsible investment. So I worked closely with Mark Delaney, who was the CIO of Australian Super. And what we learned out of that was people did want to do good with their money, but they also wanted to make sure they did not lose ah returns in the process. And they said, if you think that um this is the right approach from an investor's perspective,
00:08:29
Speaker
don't make me choose. I'm a manufacturing worker. um You're the experts in super. You should integrate this philosophy into the way that you invest more holistically. That was the takeout for me and that was my first introduction into this space. Then when I was the CEO of Seabus, ESG was now a thing. The PRI had been launched, and I had my ESG manager Louise Davidson, who's now the CEO of Axi, come to me and say, David, there's an asset owner position available on ah to be elected for the PRI board. And I think you you should nominate, which I did, um i do as well as I'm told, by Louise, a forward thinker. and
00:09:17
Speaker
And then from there I came onto the board in 2009 when the organisation was still very nascent and small. And I was on the board from 2009 to 2015. and then um When this position came up in 2021, 22, I had at that point
Investment Landscape Challenges
00:09:41
Speaker
finished my executive roles in Australia and put my hat in the ring for the position. So that's how I ended up here. It was interesting coming back as a CEO rather than as a board member and seeing how much the landscape had changed and how much the PRI had grown.
00:09:59
Speaker
And yeah, that this sort of ah niche idea was now mainstream. And um you know we were now not only having tailwinds, driving the interest in the whole thematic, we were seeing a whole lot of challenges, which we can no doubt explore in this conversation, that are now ever present. And in the two and a half years that I've been here, the world's completely changed. um it's It's a much more challenging environment. We've had conflict, we've had coming out of COVID, we've had you know we've had cost of living crisis, energy crisis, you know one thing after another with the emergence of popularism. And so these are all new dynamics that we're all having to deal with as investors. It's really interesting, David, and wonderful to hear about um your journey to the PRI.
00:10:53
Speaker
from board member as well to CEO. And you've witnessed such astonishing growth as you've mentioned. I'd be curious to know how much you think that the PRI could grow to and when you think it could reach saturation. Yeah, great question. So that i mean ah there is only so much growth that you can have. And it is true, there are some markets where we have sort of reached saturation point in the developed markets. Now there is still growth available there, but it's not nothing like, I mean, that the organization doubled in size in the last five years. We're not going to double in size in the next five years, because you do max out in in in particular markets.
00:11:37
Speaker
um We asked, are those seeing you know really strong interest from emerging markets in the PRI? The PRI originally was established mostly from developed markets from Europe, the US, Australia, et cetera. And there was some emerging market membership early on, but not not very strong. We've now got 700 of the 5,000 or so centuries from emerging markets, and we're seeing really strong interest in Southeast Asia.
00:12:11
Speaker
in Latin America, in the Middle East and in Africa. So we think there's potential for growth there. We're also seeing quite a lot of interest in, you know, central banks and sovereign wealth funds in the in the work of the PRI. So that's another area of growth for us. But I guess, you know, as we see our role, you know, it's not growth for growth's sake. It's growth, we want growth to aid the mission of the PRI. And we want to make sure that the existing markets are well served to enable those signatures to be able to achieve their objectives, in addition to us seeking growth in new markets. Yeah, that makes sense. And I do know that emerging markets is a strategic priority for the PRI. So that is really interesting to hear. I guess just from a practical perspective, I mean, a lot of people who are listening to this would probably know how
00:13:10
Speaker
asset managers and asset owners use the PRI, but it might be just helpful to get your perspective. If anyone who may not be directly involved in that process, how do you actually use the PRI, what's involved, and and you know when you sign up as a PRI member, what exactly are you signing up to?
Responsible Investment Standards
00:13:29
Speaker
yeah So when you sign up, you're signing up to the six principles. One of the things that you need to do is um demonstrate that you are meeting the principles. And the minimum standards, they're not that high a bar because the whole point about being a member of the PRI is we want you to begin your journey to become a more mature, responsible investor. And that takes time.
00:13:55
Speaker
um But you know we ask organisations have a responsible investment policy that covers more than 50% of their assets, that they have resources internally in that organisation that is working on responsible investment, that you report on a regular basis that you are meeting the the minimum standards. But you know the the what what we're looking to do is to provide um support to our signatures so that they can improve. So that'll be doing things like providing case studies, providing DDQs on how you can um you know develop your um processes when you're employing and investment managers if you're a an asset owner.
00:14:45
Speaker
So we provide a lot of tools and support that guide and step out to signatories how they can improve their practices. So that's the first thing. We also provide, ah we have an academy, so there's an opportunity to do online learning. um And then we provide the ability to report on ah on a regular basis to ah tell us how your, your and we benchmark you against your peers. um That's the first thing, that's sort of as an individual institution. But as you know, if you believe in the thematic, you cannot solve these systemic risk issues on your own as an institution. So it's really important to create convening opportunities
00:15:28
Speaker
And so we run the secretariat for things like the Net Zero Acid Owner re Alliance. We participate jointly with other organisations on Climate Action 100. Advance, which is our human rights ah stewardship engagement. And Spring, which is our new one on biodiversity in nature, is again another stewardship engagement. So they're just they're just examples of what we do when we bring signatures together. And then the third bucket of work that we do is on the policy scale. So you can improve as an individual's signature, you can work with others, but we operate in a system of rules. And that those rules have been um developed over many decades. They've not been set up to enable responsible investment. And so you know we seek to influence the policy settings so that they are creating a better environment for sustainable finance.
00:16:23
Speaker
But also we're seeing as but in response to the fact that it's now mainstream top-down architecture being put in place by regulators, particularly around disclosure. And so a really important role for the PRI to play is to bring a practitioner's perspective to the formulation of this regulation that's occurring around the globe, to make sure that you know regulators understand barriers for implementation. um and we're able to bring a global perspective on best practice on policy formulation. So there are three buckets individually, collectively, and then working on on looking at shaping the system that we all operate in to better enable us as investors to deal with the systemic risk issues that we're all facing and that aren't necessarily apparent on the balance sheet when you think about companies that you want to invest in. Do you think that
00:17:21
Speaker
being a member of the PRI, in your opinion, is considered an ASG tick of approval. um What confidence can consumers have that a PRI's signature is actually achieving responsible investment practice? Yeah, so like I saw mentioned, Maddie, the the men the requirements we have to be a PRI member are deliberately at a sort of, you know, not so advanced that it stops people from learning. And this is really important, you know, from the emerging markets example that I gave you. They're not as mature in their practices, but they're catching up very quickly. And if you have your minimum standards too high, you would stop their ability to learn.
00:18:06
Speaker
What's important though is that we ask that our members report on their activities that they meet the minimum requirements and if they don't minimum meet the minimum requirements we then take them through a process and if they don't get there we will delist them and have done that. The other point that I would make and it's a new program that we're bringing in we've heard from our signatories that there's no one way to do responsible investment. um It depends upon your geography, your economy, your demographics that you're serving, what you the strategy that you're implementing. um And so people are looking for us to be more nuanced in the way we provide support.
00:18:49
Speaker
um What we're looking for is now is that our signatories progress. And so we're developing this new program called Progression Pathways, which will be voluntary and will be in addition to reporting and assessment, which is will be um and we will be addressing the um the workload for reporting assessment because we've heard the signal from our signatories that it needs to be more fit for purpose for this new environment that we're in. um But the progression pathways will be a way in which we can support signatures based on their own specific needs. And then we'll be looking to help them improve and let's step out to them so they know what the next thing they need to do to go up the up the ladder of that particular pathway pathway that they select. That's great, thanks David. And now obviously we've seen a pretty
00:19:44
Speaker
interesting market for sustainable investment over the last 10 years. And as you said, kind of an acceleration in the last five, ah we've seen the hurdles constantly improve. The acceptance has obviously ah rapidly improved as well, but it's also faced challenges. You know, you've been at the PRI since 2009. So since that time, how has the PRI kind of evolved of of its offering to its members, but also I think it would just be interesting to understand what ESG was like in its early stages and kind of where you see it at today. Yeah, so I think the initial phases were around, um you know,
00:20:27
Speaker
developing internal expertise so that you could start to identify from a risk perspective um these these additional factors. if you If you don't mind, I'm just going to step back for a second. The whole responsible investment ah thematic is in my view based on this um understanding that when you look at the balance sheet, ah Traditionally, it doesn't tell you everything you need to know about um whether that company is going to be a long-term, sustainable, profitable organisation. Because there are these externalities that aren't on the balance sheet. And I always like to quote the Ocean Tomo longitudinal research.
00:21:12
Speaker
that has been tracking the S and&P 500 over since the 1970s. And in the 1970s, 80% of the balance sheet of the S and&P 500 could be explained by tangibles, um but 20% in tangibles. That study done in the in recent years, it's flipped. 10, 20% is tangibles, and 80 to 90% are in tangibles. And so, What we're doing is we are re-plumbing finance. We are identifying that there needs to be new frameworks, new data sets that tell you whether um there are sustainability risks for that company and opportunities. And so we are redoing the plumbing. That's a ah difficult business because these are new areas. These are not
00:22:07
Speaker
no these are not ah existing competencies within the finance industry. This is now growing. But it is challenging for our industry because you know we're um we're having to do this more quickly than you would like because we have got the work, the the depletion of the world's resources getting more and more significant and so we do need to work quickly but it's you know we are sort of like we're flying the plane while we are building it and it's an uncomfortable feeling or for investors.
00:22:42
Speaker
So I'll just make that point. So our role is sort of was originally focused on helping identify these ESG issues that could be material. And now we've moved from that into, okay, so how can we create ah more standardized ways of gathering that information and frameworks that um are interoperable? So we've been very big supporters of ISSB as ah as a consequence. If you said to me though, what were the sort of some of the kind of critical things that have sort of been step changes in terms of the growth of this thematic, I would say, well, clearly the the Paris agreement in 2015 and the SDGs were really significant, I guess, government interventions that said investors really need to be putting this onto their radar because these are significant issues.
00:23:41
Speaker
that governments have expressed a view around. And I think that really lifted, that we you know, we went to a different level of of of currency. And now we're moving into a new phase where, you know, the COP, we've got biodiversity COPs as well as climate COPs. We've got nationally determined contributions from um each of the countries that they've committed to. They have to ah report their progress. that That progress report will be next year in Brazil. And the role the private sector has to play in enabling those climate ah targets to be set is increasingly becoming understood by governments. So getting the right policy settings in place to enable private capital to go to work alongside public policies is kind of where is the space that we are now in.
00:24:32
Speaker
so that was kind of roundabout kind of answered your question but hopefully that that gives you I think some of the waves of change that we've seen in our industry over the last 20 years. Definitely thanks so much David that's that's really interesting history. um Off the back of the discussion on public policy it'd be interesting to maybe hear about your membership base in the US s and perhaps how the current political environment has shaped your involvement there. And I guess, yeah, the political environment over time. Yeah, look, there is not a meeting I go to around the globe, or a podcast that I do, or an interview where this question doesn't come up, and which makes sense. I mean, it ah the US is the biggest capital market in the world. um And so what happens in the US matters to the rest of the world.
00:25:30
Speaker
um And yes, there's a lot of focus on the way in which ESG has been politicised, um which is very disappointing because this is all about just improving your decision making. It's all about how you can make sure you you are creating and sustaining long-term value for whichever your customer base is or whoever your beneficiary group is. um So this idea that you know investors can't include ESG information is just anti fiduciary. But unfortunately, it you know it's also, I guess, in a way, it's a signifier of our success.
00:26:15
Speaker
Because um though what's happening here is that the um fossil fuel industry are funding efforts to slow down or shut down the ability of investors to collaborate around engaging with companies on climate change and their business models. And look, they've had some success. um But I think it doesn't doesn't stop the work of investors in the US who remain committed to but being responsible investors. They might have to be more mindful of the, I guess, the but transactional costs have been targeted politically and through subpoenas and litigation and so forth. um And you know we need to make sure that everything is grounded in fiduciary responsibility, which it is.
00:27:03
Speaker
In fact, I would say not working on these issues. If you if you believe a thematic and you suddenly stop working on them, then actually you are oakess boat exposing yourself to fiduciary risk. The other point that I would make about the US is that not everything is negative that's going on there. There's some really positive things that are happening. I mean, the Inflation Reductionary Act is materially moving money into renewables. You know, to up to a trillion dollars worth of investing is going on in the US. We've seen California come out with some of the most progressive climate disclosure laws that are at our law now. We've seen Secretary Janet Yellen last year in your Climate Week announce the Fed's principles for adopting net zero strategies from a finance perspective.
00:27:54
Speaker
um And so you know there are um there's serious work going on in the US market, but yes, it's it's it's hyper politicised. What I would say is that you know you can't take these things that this is not not going to be the case forever, but we're not seeing contagion um in the same way in other markets. Yes, you got you are seeing people who are impacted by For example, the climate transition pushing back, understandably. um I mean, it is important that there is a just transition. and But um yeah um mean I think it's ah it's more of a, it's quite a complicated market that we see in the US.
00:28:34
Speaker
um I also think it's going to be like this while we have a pre presidential election. And I think on the other side, but there are sensible Republicans know that these issues can be material and and and they will, I think, front into these issues in a sort of more serious way than we've seen in the last sort of little while. David, I really couldn't agree more. And it's almost like you've taken the words straight out of my mouth from from a personal perspective. And I think one thing that really helped me, as someone told me, when you start to get resistance from you know the industry, that's when you know you're close to change. And I think that that really resonates me to me with what's happening um offshore. And you know I do think in terms of the US environment, there is very much a nuance around language that we use to discuss ESG and sustainability. um And it does seem to be state-based resistance as well.
00:29:33
Speaker
um And I think you answered it in a lot of ways, but I just wanted to dive into it a little bit more closely on the question of whether all funds should be integrating ESG and sustainability into their investment process. I, from your previous answer, think that you're going to say yes. But I guess going forward and one step more than that is, is there going to be a need for SRI characterization in the future? like will it just be considered part of the funds management process? I mean, he's hoping, but I'm interested in your views. Well, I think that's what we're seeing from a regulatory point of view. I mean, so again, we've been tracking sustainable finance regulation for the last 10 years.
Sustainable Finance Regulations
00:30:17
Speaker
And you know it's gone from 300 to 1,000 and it's it's like it's it's accelerating. So we're seeing increasingly markets put in place
00:30:29
Speaker
the which which is perfectly understandable. So if if this this idea is now mainstream, it's important that um regulators are able to have confidence that claims that are being made by investors about their particular product or strategy or approach is evidence-based and that there are proof points. um And so we're now sort of seeing this this sort of architecture being put in place. Now, it creates a problem, however, which is that there is a lot of burden of reporting of both mandatory and voluntary. We talked about our own reporting. When we started it, there was no global reporting about responsible investment.
00:31:15
Speaker
That's not the case anymore. We're seeing mandatory stewardship codes and tc TCFD reporting and we'll start seeing it with the ISSB standards as they started to be rolled out. So I think that's a recognition that regulators are beginning to ensure that there is apples with apples car comparisons, but also that there is veracity behind the claims that investors make around their sustainability approach. um So I think that's to be expected. It's uncomfortable. It's it's imperfect. um And there's sort of, you know, where there's learning as we go to sort of, I think there's a,
00:31:58
Speaker
a rapid process of trial and error going on at the moment. um and But I think we'll come through that at some point. I also would say, just as as an observation, emerging market jurisdictions are looking at this regulation that's being developed and trialed in Europe and the UK and US and Oceana and they're learning very quickly and they're I think they're accelerating their progress and they're picking you know what makes, what they' you know they've learned lessons and I think that's a really positive development. And I also see emerging market regulators in some places
00:32:36
Speaker
very proactive in reaching out to investors to say, come in, let's problem solve these things together. It's not just all about enforcement. And, you know, it's also about well what's the problems we're trying to solve for as a system and as investors and and the regulators working more closely with us. And just to give you an illustration point, I mean, the PRI has a lot of, we do a lot of work around policy around the globe. We have our annual conference every year. This year it's in Toronto. And part of that conference is an in-camera session with policy makers where there is a chat of house rules conversation around um what what we're seeing in different jurisdictions around regulation and the investor's perspective. And so you have regulators in the room talking with investors to sort of share experience and work out how we can improve more effective adoption.
00:33:32
Speaker
Awesome. Thanks, David. um And maybe off the back of that discussion on policymaking and reporting, you were quoted in the AFR recently discussing the importance of not ending up in a world where there is too much variation across the adoption of the ISSB standard as an example, which for those listeners that aren't too familiar with that, it's ISSB is International Sustainability Standards Board. I'd be curious to hear what your perspective is on Australia's approach to adopting the standards um and why it might be important for Australia to adopt the standards in full. So as a general position, our view is that the the is the adoption of the ISSB standards is really critical for our industry. We had
00:34:25
Speaker
um And what's really positive about um the ISSB development is the fact that three years ago, we we had no internationally agreed framework where we could start developing standards that could be applied ah from company to company, from industry to industry, from country to country, that could be comparable and contrastable. And apples and ah with Apple's comparison. So we've seen a number of the voluntary frameworks fold into ISSB and they've been working very yeah very quickly but very seriously in developing this the modules. They've got S1 and S2.
00:35:10
Speaker
um that have been released last year. And our view is that there are some some jurisdictions where they're contemplating just adopting climate, because it's obviously the most important issue. But the way the standards have been developed is that they are interlinked in the logic need logic flows. And so if you only pick one but the modules, then you are not creating this ability for investors to be able to make assessments around sustainability risk um across you know companies and industries, et cetera.
00:35:44
Speaker
so It's contemplated in Australia. It's under review. So we just encourage the the government to understand from an investor's perspective. And we hear this really strongly, Matty, as I move around the globe. Investors want these standards adopted in a uniform way. Look, we do understand there'll be some slight tweaking for jurisdictions, but that should be kept at a limit yeah as limited as possible, because then the more you only adopt parts, then you undermine the actual basis for having international standards. So, I would encourage the Australian government to
00:36:25
Speaker
take the feedback that it's getting from industry and consider adopting both modules together.
Gender Diversity Initiatives
00:36:35
Speaker
I think that makes a lot of sense. Now we are called Alpha Females Invest, which is and not a reflection on our audience, but more our goal to increase gender diverse views in the Australian finance industry and in In saying that, I did want to touch on some of your roles that have made advancements for gender diversity, particularly your contributions to the 30% Club. I guess it'd be interesting to understand what gender diversity means to you in in finance and what you think we need to do or can do to help reach equality. Yeah. So look, just from a fairness point of view, um yeah it's it's really critical that you have
00:37:18
Speaker
half world's population being able to have the same access to opportunities as the other half. um And then, you know, just from a, frankly, a value creation point of view, to not have half of the population you know, from an intellectual property point of view, not being involved in the industry means that we're leaving value off the table, um just to you know just from a purely sort of, you know, commercial perspective. And we know that women bring different ways of thinking about the problems than men do. And so
00:38:06
Speaker
We've all, I've always believed in, you know, at Seabus we've played an active role. for example, in the ASX companies, that there was there needed to be stronger representation of women around those boards to broaden the mix of experience, skills and expertise. And I'm really pleased to say that initiative, which is our ah operates around the globe, but in the Australian context, I think the last stats I saw is that it's well above 40% now that are women around boards. And then there's actually within the ah within our own organisations,
00:38:39
Speaker
CBUS, like many of the other large Australian super funds, at a certain point begin to began to internalise our investment processes, our investment programs. And I remember, you know as we were beginning that process, I was really concerned about the fact that we were only getting one in 10 applicants to our investment positions that we were advertising from women. And and we did not want to end up with a team full of men running our investment program. And so we had a very deliberative program around how to create a more inviting environment for women and senior women, not just junior women, senior women to come in and play the roles. And this might sound, um maybe it is just logical. One of the things that we did
00:39:25
Speaker
was that we started to really promote men taking family leave, extended family leave, and we wanted the senior leaders, the senior men, to take family leave, to A, get the personal benefit, but to also signal to the ah internally and into the organisation that it was okay, in fact it was accepted, in fact actually it was encouraged for all of our employees, men and women, to be able to take extended family leave, um
00:39:55
Speaker
and our role model, the fact that this was an acceptable practice within our organisation. We did a number of other things, but I'm really pleased to say that when I left the CBUS, that team had grown to several hundred, and more than 40% were women. Now, there's still more work to do. I think there's particular parts of of the investment structures that where it's harder to to encourage women either to come or stay, private markets in particular.
00:40:30
Speaker
private equity. um ah But you know I think this is really important. If you if you want to if you if your job is value creation, then it's really important that you have the most talented people at the table. we Cognitive diversity is a real thing. um and And those organisations that think about cognitive diversity and gender is one component, it's not the only component. I think make better decisions, create better value for the constituencies they serve. Thanks, David. Couldn't agree more. And yeah, definitely important to appreciate and understand um the importance of cognitive diversity in value creation, in addition to the the point of just general fairness, as you mentioned, um at at the start.
Career Advice and Decision-Making
00:41:22
Speaker
um To wrap up the podcast today, David, thank you so much for being such a wonderful guest. I'm sure Em and I both really enjoyed our discussion today. With such a broad and impressive career, we expect that you will have some advice for our listeners and would love if you could share any top career advice that you have. I don't know if it's top career advice, but look, this is what I like. When things get tough, step in. There have been points in my career when you and you might not be you know, you might have been a junior person, but if something's not right um Or something, you know things get tough stepping you'll you'll you know, I think that um You learn a lot when you do and you know, I think that you know, you can you can actually change outcomes as a result Be curious, you know be respectful um But the thing that I would say is not a practice that's well known enough
00:42:24
Speaker
or recognise enough is that um how do organisations make decisions? Decisions are made by people. Why do they make those decisions? And so part of the effectiveness of your ability to navigate and influence is by putting yourself in other people's shoes. You might not always agree, you you know, you might not agree with why a position is being put. But if you can walk into somebody else's shoes and understand from their perspective why they care about what they do or why they're positioning themselves around that, then you're in a better position to A, demonstrate respect and empathy, but also diagnose better
00:43:06
Speaker
what might be the, you know, an improved way to to you know implement a particular strategy or approach. So, you know, that's nothing rocket science in any of that, but they're the other things that I've learned. And then I guess the other piece is around stakeholder management. And again, it comes back to um walking in people's shoes, um understanding why organisations and boards make the decisions they do really does. you know if you If you can understand where they've come from, then you're going to be much more effective in being heard and listened to. I think that makes a lot of sense. i I think there's a time in everyone's career where they've felt frustrated at decisions that have been made within the organisation.
00:43:52
Speaker
to take a step back and think about why they're making that decision and put yourself in someone else's shoes is really, really great advice. So thank you so much, David. It's been such an engaging conversation. I think that so many people will value from this conversation whether they're in the SRI industry or not, because it really is just part of doing business these days, particularly with the regulatory developments that are coming. I think PRI plays a really big role in facilitating that to both asset managers and asset owners and other people in the SRI and more broader broadly the financial landscape. So I appreciate your time. Thank you so much. And we've loved having you on.
00:44:29
Speaker
Thanks, Emily. Thanks, Maddie. Thanks, David. Thank you for listening to the Alpha Females Invest podcast. If you like this episode, we would love your support on Instagram. You can find us at Alpha Females Invest. You could also leave a podcast review, but most importantly, please keep listening. See you next time.