◼ FINANCE Bloomberg Businessweek August 31, 2020
29THEBOTTOMLINE Investorswhoarenervousaboutstimulussee
it asa shelter,butgoldis anunreliableinflationhedgein theshort
term—andlookingexpensivebysomemeasures.
worthsomething.(Neitherassetproducesincome
orearnings.)WhatmakesBitcoinrelativelymore
attractivetohimis thatit’sstillinitsearlyadoption
stages.ButBitcoin’smorespeculativethangold:
Evenafteritspricerisethisyear,it’sdownroughly
40%fromitspeakin2017.
CommercialpropertyinvestorJamesScott’snew
favoriteassetis a lotmoreliquid:atleast4,000liters
ofwhiskyina warehouseinScotland.Hestartedcol-
lectingbottlesfiveorsixyearsagobuthasswitched
tocasks.Herecentlysolda 28-year-oldcaskof
Bunnahabhain,fromtheislandofIslay,afterit appre-
ciated10%in11 months.“Whiskycertainlyoutper-
formsinflationincasks,”Scottsays.Anda goodtipple
hasoneedgeoverpurelyfinancialassets.“Whisky’s
gotmoresoul,”hesays.“Andattheendoftheday,if
it doesn’tworkoutasaninvestment,youcanhave
a greatparty.”�JohnAinger,VildanaHajric,Adeloa
Eribake,andEddievanderWalt
● Moreinvestorswanttoknowif companiesare
makingprogressonrace,butdataarelacking
DiversityIsHardto
PutonanIndex
Callsforracialdiversityat everylevelofthecorporate
worldhaveinspiredsociallyconsciousinvestors.It’sa
powerfulgroup,withmorethan$30trillioninglobal
assetsbackingcompaniesthatprioritizeenvironmen-
talstewardship,socialimpact,andgoodgovernance,
known by the shorthand ESG. But when it comes to
how integrated companies are—or aren’t—the data are
painfully limited. “I would be surprised if we have
full transparency on this topic,” says Remy Briand,
head of ESG at index provider MSCI Inc.
The reason? “Companies don’t want to disclose,
because the data we are asking for is unflattering,”
especially when it comes to the best-paying jobs,
says Natasha Lamb, a managing partner at Arjuna
Capital LLC. The firm pushes U.S. companies to dis-
close racial and gender pay gaps. Alphabet, Bank
of America, and Facebook have opposed Arjuna’s
proposals, while a handful of companies including
Citigroup and Starbucks have agreed to provide data.
The collection of racial diversity information can
be a particularly big hurdle for companies operating
in Europe, which is usually a hotbed for ESG cam-
paigning. Some governments have made it illegal
to collect racial and ethnic data for most purposes,
in part because of the legacy of the Holocaust and
WorldWarII.InAsiathere’sonlya buddingrecogni-
tionthatsocialfactorsmaybeofconcerntoinvestors.
MostcompaniesinChina,theworld’ssecond-largest
economy, don’t report enough data to show they
qualify for ESG funds, and the category accounts
for less than 1% of equity assets under management
in India, according to data compiled by Bloomberg.
“Generally, we’ve seen less disclosure of racial diver-
sity,” says David Smith, head of corporate governance
for Asia at Aberdeen Standard Investments Ltd. He
says he continues to engage companies on the topic.
Discussions among far-flung money managers in
the U.S. or Europe and companies in Asia can also be
marred by the historical experience of colonialism.
Conversations about racial differences remain “some-
what taboo in many Asian countries,” says Stephanie
Creary, an assistant professor at the Wharton School
of the University of Pennsylvania, making it “difficult
to garner precise insights into the racial and ethnic
dynamics that contribute to equity.”
Investors in U.S. companies don’t face the same
obstacles. Most companies are required to provide a
breakdown of racial and ethnic data about their work-
force to the federal Equal Employment Opportunity
Commission. But they don’t have to publicly disclose
that data. Many that do share demographic informa-
tion use percentages instead of absolute numbers,
which can make it harder to see the full picture.
There’s also a lack of uniformity in definitions and
disclosure formats, says MSCI’s Briand.
S&P Global, a data and index provider, says only
about a third of the companies it’s assessed globally
provided it or the public with breakdowns of their
workforce by race and ethnicity. Some big players are
giving diversity more attention, however. Institutional
Shareholder Services Inc., which advises funds on
how to vote in shareholder elections, in July sent a
letter to U.S. companies asking them to disclose the
self-identified race or ethnicity of directors. Each
director could choose as many as three ethnicities.
Index fund giants are talking more about the issue.
BlackRock Inc. Chairman Larry Fink said in an open
letter the firm will assess racial equality issues at port-
folio companies. A spokeswoman for Vanguard Group
Inc. says it discussed diversity with most of the 686
companies it engaged in the topic of board compo-
sitioninthe 2019 proxyseason.�IshikaMookerjeeTHE BOTTOM LINE U.S. employers collect plenty of information
on race and ethnicity but aren’t quick to share it with their investors.
In other countries, the very topic is often taboo.“I would be
surprised if
we have full
transparency
on this topic”