European asset managers best achieve gender equality goals says PWC diversity report

The Diversity Project Europe (DPE) and PwC Switzerland have published a new report “Embracing Diversity, Equity and Inclusion: Unlocking Success in European Asset Management ”, a first of its kind assessment of the current state of diversity, equity and inclusion (DE&I) in Europe’s asset management industry.

The report draws on insights from 30 leading asset managers, with more than EUR 12.4 trillon in AuM, who have shared their insights, challenges, and visions for a more inclusive future, interviews with the DPE’s founding members, and a review of key industry regulations.

The research reveals that European asset management companies recognise diversity is good for business and have a strategic commitment to DE&I. Over two-thirds of respondents feel strongly or very strongly that DE&I is well integrated into their organisational strategy, driven mainly by recognition of the business benefits.

Furthermore, the evolving EU regulatory framework for DE&I will play a crucial role in solidifying and sustaining progress.

Insights also revealed that European asset managers see the business benefits of DE&I and want to integrate it into their strategies, but face obstacles in resourcing, measuring, and mainstreaming these efforts.

Only one in three respondents feel they have sufficient staff to achieve their DE&I objectives and just 14% say that their leaders and people managers are held accountable for DE&I objectives in the same way they are for other business objectives.

European asset managers have made the most headway in achieving gender equality goals. Women make up over 40% of the workforce in two-thirds of these organisations, however, female representation drops at senior levels, with less than 30% in C-suite or partner roles in more than half of the organisations surveyed.

Social mobility has had less focus in European asset management compared to gender, owing to the complexity of the topic and the diverse interpretations and issues across different countries. Only one in five organisations collect data on social mobility, citing issues with GDPR, strict regulations and cultural sensitivities as barriers to this. This lack of data was found to have hindered firm’s ability to set measurable social mobility specific goals with only 4% of organisations revealing they have such goals in place (compared to 61% for gender).

Organisations are also falling short in building an inclusive work environment. Only one in five (18%) have incentives in place for promoting inclusive behaviours and just two in five (39%) believe their C-Suite actively demonstrate inclusive leadership.

Furthermore, addressing and appropriately handling inappropriate behaviours is crucial for cultivating inclusive cultures. However, the survey found that only 28% of companies had fundamental policies and guidelines in place for this purpose.

The report sets out a number of recommendations to help European asset managers turn their DE&I intent into reality.

• embedding DE&I into business growth strategy and aligning with vision, mission,
• and values
• defining clear, measurable DE&I objectives and holding leaders accountable
• investing in robust, transparent DE&I reporting mechanisms
• ensuring pay equity and pay transparency across the organisation
• attracting, retaining, and developing diverse talent, especially in underrepresented
• roles
• implementing targeted mentorship and sponsorship programs for underrepresented
• groups
• cultivating a safe workplace culture for open feedback on DE&I issues
• identifying and addressing inclusion 'hotspots' in the employee journey

Ric van Weelden, diversity project Europe chair, said: “This report reveals both the progress made and the significant work that remains in the European Asset Management industry’s DE&I journey. While there is clearly strategic intent and regulatory momentum behind DE&I goals, organisations are facing a significant struggle to translate this intention into action, especially when it comes to areas like social mobility.

“By acting now and taking on board the recommendations in this report, firms will not only boost morale and meet regulatory standards but also position themselves to gain significant business advantages. A truly diverse workforce drives enhanced innovation, improved decision-making, and superior performance, ultimately ensuring the sector's sustained success.”

Johannes Smits, partner, diversity, inclusive culture and equity practice, PwC Switzerland, said: “At PwC, we believe that a diverse workforce, enriched by varied talents and backgrounds, is essential to addressing today’s complex challenges. An inclusive culture is crucial to unlocking this potential and thriving in an increasingly intricate and diverse world. Our research highlights the importance that employees attach to an equitable and fair workplace. However, realising true diversity, equity and inclusion, and harnessing its benefits, entails navigating a range of practical challenges.

"We hope that our analysis will help the asset management sector in Europe better to understand the challenges and opportunities involved in improving DE&I in the sector and spur companies to both individual and collective action."