Veris Wealth Partners’ Equity, Diversity and Inclusion (EDI) Task Force Case Study Published as Part of the JEDI Investing Toolkit

by Roraj Pradhananga, Partner – Senior Research Analyst

GenderSmart, a global field building initiative dedicated to unlocking the deployment of strategic, impactful gender-smart capital at scale, recently launched a Justice, Equity, Diversity and Inclusion (JEDI) toolkit. This JEDI toolkit is designed to encourage allocators, investors and intermediaries to understand the dimensions of JEDI investing and start applying gender and JEDI lenses throughout their investment processes.

The GenderSmart JEDI working group created the toolkit with the hope of improving investment decision-making, bringing on board new portfolio or fund managers, improving existing portfolios and enacting organization change for both people and processes. These goals are in line with Veris Wealth Partners’ vision, our firm’s emphasis on our Racial and Gender Equity theme, as well as the recommendations our own EDI taskforce – consisting of Patricia Farrar-Rivas, Jane Swan and myself –  have made over the last two years.

As part of the JEDI Toolkit, GenderSmart published a case study profiling the work of Veris Wealth Partners’ EDI Task Force. As Partner and Chair of our EDI Task Force, they asked me to describe our approach and I responded, “For Veris, EDI is not an exercise in box-checking. The financial services industry’s approach too often strives to increase diversity in management without sufficient consideration of embedded structural EDI obstacles. Black, Brown and Indigenous voices remain severely underrepresented across the financial services industry. To truly scale up impact and drive racial justice across the industry, a majority of firms will need to adopt an EDI approach that is similar or better than ours.”

How is Veris developing this EDI strategy and applying an EDI lens in investments?

Veris’ Investment Committee approved the EDI task force’s recommendations to significantly increase the number of EDI managers and managers with an explicit EDI lens in their investment process over the next five years. This requires us to be intentional in building our priority pipeline and due diligence and approval processes. We have approved funds with an EDI lens – including funds that focus on employee ownership and combine gender, race and community voices.

Veris’ EDI task force is mandated to assess existing investment practices, make recommendations on EDI goals and integrate EDI in our investment decisions. In 2020, we enhanced and amplified EDI elements throughout our due diligence questionnaire. This new data was instrumental in creating our EDI Manager framework and an Advancing Racial and Gender Equity (ARGE) assessment tool that classifies our approved managers in five different categories – from EDI watchlist (needs improvement) to EDI manager (best-in-class). The other categories are EDI aspirational, EDI firm and EDI investment process.

The ARGE tool measures diversity at all levels of the firm and assesses EDI lens of the investment process of the various fund managers. Pay equity, employee benefits, implementation of EDI policies, portfolio company engagement, shareholder proposals and disclosure of EDI proxy voting guidelines and records are among some of the reviewed data points.

Our next steps include engaging our fund managers, communicating best practices and helping them make improvements. We also performed a self-assessment using the ARGE tool and Veris is not yet an EDI manager. We are asking our non-EDI managers to join us on this transformation journey. Collecting data continues to be our biggest challenge. The success of our EDI approach is dependent on our managers’ willingness to engage, share data and implement changes themselves.