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Strong advocacy for diversity, climate change and female empowerment have defined the professional journey of Dominica Ribeiro, CMO at Breckinridge Capital Advisors. In today’s far-reaching conversation Dominica shares her ongoing passion for ESG investing, identifying gender-based investing opportunities and her focus on mentoring and sponsoring the next generation of women leaders across all sectors of the market.
Over the past couple of years, ESG investing has shot up in terms of inflows and assets under management in both equities and fixed income. Can you share your views on today’s growing appetite for ESG investing and the top trends that have shaped the industry in 2021?
You are right. Fund flows to investment strategies that consider ESG risks have increased dramatically in 2021.
The Global Sustainable Investment Alliance said in July 2021 that sustainable investments total more than one-third of all assets. That is more than $35 trillion.
Our own research of institutional investors suggests that investment-grade fixed income is an ideal place for institutional investors to begin integrating ESG into their investment portfolios.
In fact, we believe high-grade bonds and environmental, social and governance (ESG) are such a good match, that investors should consider investment-grade fixed income as a foundational asset class for the broader integration of ESG into their organizations and investment processes.
Certainly, the growing appetite for investment approaches that fully integrate ESG has been piqued over the last 24 months by the conditions associated with the pandemic.
By that, I mean that investors received a stark reminder that while there are ways to acknowledge and mitigate known risks like interest rates, corporate events or ratings risks, there always will be unknown risks that emerge that must be managed.
We think that ESG factor analysis does a very good job of helping to anticipate or identify and then avoid some of these extraordinary or extra-financial risks.
For example, in 2020, the social unrest that occurred in cities across America and around the globe signaled that ignoring diversity, equity, and inclusion has real social and economic consequences.
Then, in 2021, the UN Intergovernmental Panel on Climate Change (IPCC) did a stunning job of bringing to our attention the current state and future risks of climate change to people and economies.
We started integrating ESG in our investment process a decade ago at Breckinridge. These matters only have gotten more critical from an investment risk perspective.
There’s been a lot of interest and focus on the changing role of marketing in asset management in recent years. With decades of experience in this area, what’s your take on the pandemic-fueled rise in marketing’s role and how has the past 18 months changed your own marcomms strategies?
We’ve seen a sharp turn from one-size-fits all campaigns to custom content-driven campaigns that focus on the quest for knowledge and information.
We hear from our clients constantly that they are seeking to understand the markets, their investments, and how our investment solutions align with their portfolio objectives.
Unless it’s a pure brand-building campaign to a new target market, then the content you publish should always focus on the client; what they care about and how your investment insights can help them solve a gap in their total portfolio.
In a recent interview on gender lens investing, you asked about the critical factors that determine success in this area. What are the key barriers to more gender-lens investing and how do those affect your work at Breckinridge?
Even with some progress in recent decades, career opportunities for women still show inequity. Within the scope of gender lens investing, that reality presents challenges.
Perhaps of greater concern over the long-term is the fact that pipelines that will help capture the aspirations of women and develop and advance opportunities for them also remain inadequate.
McKinsey’s Women in the Workplace project has generated powerful research in the area. In 2020, McKinsey reported that between January 2015 and December 2019, the number of women in senior-vice-president positions increased from 23 to 28 percent, and in the C-suite from 17 to 21 percent.
However, additional recent research from McKinsey showed that the pandemic had a near-immediate effect on women’s employment. As a result, one in four women were considering leaving the workforce or downshifting their careers versus one in five men. While all women have been impacted, three major groups experienced some of the largest career challenges: working mothers, women in senior management positions, and Black women.
At Breckinridge, we are working to identify favorable gender-based investing opportunities that are consistent with the investment objectives of our gender lens strategy.
What can we expect to see from you and Breckinridge in the next year?
I’ve been advocating for diversity, specifically women in leadership, for quite some time now. You can expect to see more of that. I am working with others in our firm to increase our focus on mentoring and sponsoring the next generation of women leaders across all sectors of the market.
As a firm, in 2021 we formalized our Diversity, Equity and Inclusion strategy. Examples of work included in the strategy are in-depth education sessions around all aspects of DEI, review of/adjustments to our 2020 compensation study and an inclusion employee work survey – which will be followed by a working group of employees to determine solutions for key issues that arise.
You can expect in 2022, we will be assessing the effectiveness of our DEI strategy. We want to measure how we performed this past year and make adjustments to the strategy or goals so that our sights are on constant improvement.
Our efforts include more partnerships with organizations focused on advocating for DEI like Girls Who Invest.
In fact, in 2021 we proudly formed a new partnership with the United Negro College Fund (UNCF) and their Lighted Pathways program.
Over the summer of 2022, we are planning to host interns from Girls Who Invest, the Margarita Muniz Academy and UNCF. These efforts are helping to diversify the pipeline in finance.
At Breckinridge, we prioritize transparency. Similar to our competitors and others in the industry, we understand we still have work to do. I believe if we all move—some small steps, some big steps—in the right direction with respect to DEI, we will reflect back in years to come and see that we made a difference in a way that will make future generations proud.
If you could make one change that would have a great impact on the Earth right now, what would it be and why?
I believe the greatest threat that we face right now to the future of our planet is climate change. If I could make one change that would have great impact, it would be to advance the global framework established in the Paris Agreement to curb climate change by limiting global warming to well below 2 degrees Celsius.
Again, we must rely on our leaders to have the courage and strength to take the big steps necessary to achieve this goal. Still, each of us can take small but meaningful steps in our personal lives that over time will move this effort forward.
My family and I are making changes to reduce the role of fossil fuels in our lives. Breckinridge’s sustainability committee undertakes initiatives each year to reduce our carbon footprint. Many in the investment industry—through the UN Principles of Responsible Investment launched in 2005—are also making efforts.
Each of us can do more to advocate for the commitment to change at the highest level that will make the goal of managing climate risk more attainable.
Disclaimers: This article contains the opinion and views of Breckinridge Capital Advisors, Inc. They are current as of November 16, 2021 and are subject to change. Any forward-looking statements are based on Breckinridge’s assumptions. There is no guarantee that such projections will occur. Breckinridge believes that the assessment of ESG risk can improve credit assessments. However, there is no guarantee that integrating ESG analysis will improve risk-adjusted returns, reduce volatility over any specific time period, or outperform the broader markets or other strategies that do not utilize ESG criteria when selecting investments.