Why Investors Should Care About Diversity

Better gender and ethnic diversity makes for a more successful company. We reveal five stocks that are delivering on social considerations

Emma Wall 10 October, 2018 | 2:39PM
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Emma Wall: Why should you care about diversity? Well, according to management consultancy firm, McKinsey, companies with better gender and ethnic diversity are more successful. McKinsey found that companies with greater diversity attracted better talent to their workforce, had better customer satisfaction and were able to have better decision-making.

Diversity falls into the S of ESG, the social to the environmental, social and governance concerns and indeed, diversity is a factor in Morningstar's own Sustainability Rating for Funds.

Recent data released by Equileap found that women still only make up 18% of employees at executive level across developed countries. They looked at data from 23 developed economies and found that the best companies for gender diversity were General Motors and L'Oreal. The best UK firm was Diageo. Companies that have achieved pay parity across genders were Air New Zealand and Ashtead Group.

There's still a lot of way to go but it sounds like we are making great inroads.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Air New Zealand Ltd0.54 NZD-1.83Rating
Ashtead Group PLC5,496.00 GBX-4.58Rating
Diageo PLC2,574.50 GBX-1.40Rating
General Motors Co47.65 USD-2.48Rating
L'Oreal SA450.90 EUR-0.98Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar

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