Race, ethnicity and investing

Read this article to understand:

• Where Aviva Investors is in terms of black representation
• Why building a pipeline of talent is essential
• How we are working to develop an inclusive culture

Despite some progress since 2020, a year that saw the murder of George Floyd and the Black Lives Matter movement rise to public consciousness, black people remain woefully underrepresented within the financial services industry in the UK.

In the wake of a similar commitment by our parent Aviva, we also made DE&I a business-wide priority. One early action saw the establishment of an inclusion steering committee, which reports on goals and progress at monthly meetings of our executive committee.

This Black History Month, I wanted to take stock of Aviva Investors’ progress, acknowledging we still have a long way to go. As my colleague and reverse-mentor Wadzie Tinofirei recently put it, this is a marathon, not a sprint.

Building a pipeline of black representation for senior positions

The first step to improving black representation is to effectively measure it. We have employed a series of initiatives to encourage all employees to fill in their diversity data, including ethnicity, in our internal systems. We explained why we needed to collect this information, and reassured our people it would be kept secure.

We have made good progress on data capture in three years, allowing us to publish an annual ethnicity pay gap as well as the gender pay gap at Aviva group level, and measure how far we have to go to become more representative of wider society.¹ By the end of August, we had ethnicity data for almost 90 per cent of our employees.

At a national level, our business is representative of the UK’s ethnic diversity, with 22 per cent of colleagues disclosing as ethnic minorities other than white, including three per cent black. This compares favourably with the UK’s 2021 census of 18 per cent ethnic minorities other than white, including four per cent black nationally. However, if we focus regionally, our numbers do not compare so well for London-based colleagues, who comprise most of our workforce. According to the UK census, London’s population is 13.5 per cent black, against just four per cent of our London employees (all numbers are for Aviva Investors).²

It is in senior positions and our investment teams where improvement is most needed. Our focus is on building a strong future pipeline, and there is more to be done.

Although we don’t have official targets for black diversity, we have a target to reach 13 per cent of individuals from ethnic minorities in senior positions. We are slightly behind, at around 11 per cent, but are working on the pipeline. This is particularly important for black representation in senior roles, as there is such a small pool in the industry. If we did not build a pipeline internally, financial services companies would constantly be trying to poach the few senior black people from each other. That would defeat the purpose of being more inclusive and representative of society.

The three elements to building a pipeline

1. We have developed an outreach strategy

To encourage more people from underrepresented backgrounds to join the industry, recognising not everyone will take their first job at Aviva Investors. This includes reaching out to schools to help students understand the world of finance and growing our apprenticeship offerings.

We are part of programmes such as Greenhouse Sports, 10,000 Black interns, Career Ready, UpReach and Investment 20/20, which work with candidates from lower socioeconomic backgrounds, helping with diversity of all forms.

2. We are developing a more inclusive hiring policy

We have developed a training programme called “Licence to hire”, which is being rolled out to all managers. We are also running a pilot to give managers an option to improve the ethnicity balance of their interview panels to minimise the risk of discrimination.

Academic research and our employees’ experience also showed candidates are more likely to have a favourable impression of a company if they see people like them in the interview process.

3. We are working on developing an inclusive culture

As well as internal development and mobility opportunities, including but not limited to black employees, to improve retention. If we fail to retain talented people, we will not improve the diverse makeup of our firm, so we have undertaken several initiatives.

Some are led by employee resource groups, like the buddy scheme run by our ethnicity workstream of volunteers. The scheme pairs up graduates with a buddy to help them navigate the business, and also support and advise graduates from diverse backgrounds if they encounter discrimination, microaggressions and so on. The buddies are there to fight their corner and ensure they are not alone.

Other initiatives are led by the HR team, like career compass, whereby every employee has regular discussions on their career and development goals with their line manager. This was set up to ensure people don't just see a present for themselves in the business, but also a future. Of course, that doesn't apply specifically to the black community, but it is important to try and close the gap between attraction and retention.

Creating an inclusive culture is a whole business issue

An inclusive culture must be embedded throughout the business. That is why our DE&I initiatives are owned by the business, not simply the HR function.

While they are not all specific to black representation, we now set ourselves DE&I actions and goals that are as important as any other business objective, running from the senior leadership all the way through the organisation. DE&I is embedded into all teams’ objectives, our policies and processes, our rewards and compensation governance. Importantly, DE&I policy is owned by our executive committee. It is a standing item in monthly governance meetings, not just so the executive committee gets a regular update, but also as a forum to challenge us when necessary. 

We have also taken key steps to increase the proportion of active allies in the business; passivity is not an option. What we have heard loud and clear from employees from underrepresented backgrounds is that having active allies in the room is critical to their feeling included and able to give their best. If those employees are always having to fight their own corner, without people willing to speak up alongside them, it is exhausting and isolating. And when we consider how small the numbers are when it comes to our black colleagues, it becomes even more important to help support and amplify their voices.

We rolled out inclusive behaviour and anti-racism training programmes to all employees and created specific training for senior leaders on how to spot and tackle non-inclusive behaviour when it arises in their teams. We also rolled out a reverse-mentoring scheme for every member of the executive committee, thanks to the willingness of several black employees who took the time – and accepted to bear the emotional burden – of candidly sharing their lived experiences.

I strongly believe being an active ally is a core leadership behaviour. All leaders, current and aspiring alike, must demonstrate they are active allies, show the right behaviours and be visible as allies.

We expanded our DE&I budget for 2023, some of which is being used to connect with external partners like industry networks and outreach initiatives. It is also helping to raise the status and profile of volunteers’ DE&I activities and create buzz around their events, as well as to develop content to bring to life the stories of individual employees, including from the black community.

We are also setting ourselves measurable targets in terms of the inclusiveness of our culture, as represented in our employee surveys. The sort of questions we see as markers of whether we are making progress cover topics such as whether people feel they can be themselves at work without fear of judgement or discrimination; whether senior leaders’ actions on inclusion live up to their words; whether employees see people like them among Aviva’s senior leaders; and whether their team leader is effective at supporting inclusion and diversity. While progress is slow, we are seeing signs of improvement.

Investment and engagement

And because we believe companies reflecting the societies they are active in have a stronger licence to operate, we also apply this to businesses we invest in. Our corporate governance team considers board diversity as part of our voting activities,³ and we integrate DE&I considerations into our engagements with companies more widely, although the depth of engagement will depend on the strategy.

Where we have a specific mandate, for example in our Social Transition Equity strategy, we go further and engage on issues like poor DE&I disclosures, weak progress on targets, unambitious targets or timelines, allegations of poor treatment of women or minorities, or signs the company is only treating DE&I as a box-ticking exercise.

As part of the 30% Club UK Investor Group on race equity, we also participate in collaborative initiatives. The group asks all FTSE 350 companies to meet the Parker Review target of having at least one person of colour at both board and executive committee levels by the end of 2023 and expecting at least half of those appointments to go to women of colour. We have sent letters to all FTSE 100 companies and are currently sending letters to FTSE 250 firms who have yet to meet those targets.⁴

We still have much progress to make to improve black representation and inclusion in our own business and the industry. But we will continue to prioritise DE&I, to embed it across the business and to encourage others to embed it as well. We are in it for the long haul.