Diversity, equity and inclusion DDQ for institutional investors

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These questions can be used as part of an RFP process, during manager reviews and monitoring, or incorporated into ongoing dialogue.

The DDQ should support wider information-gathering. Therefore, investors are encouraged to:

• seek additional information and clarification from investment managers and consultants after receiving the completed questionnaire, where necessary; and
• consider what additional resources are available to better understand and analyse investment managers’ and consultants’ answers.

The DDQ is divided into four sections, with questions relating to:

1. all organisations;
2. organisations investing in private markets;
3. organisations investing in public markets; and
4. investment consultants.

Investors incorporating questions from this document into their own DDQs should note that three out of four sections are not relevant to all organisations.

Responses to the questions in the second and third sections of the DDQ should cover specific investment strategies, vehicles or products being assessed, rather than provide highlights from a company-wide offering.

DDQ questions

All organisations

Governance

1.1 Which role / committee(s) within the organisation has ultimate responsibility for diversity, equity, and inclusion (DEI)?

Explain if your organisation has assigned ultimate responsibility for DEI to the CEO, or an equivalent role, or to a board-level committee. Mention the skills and experience that equip the individual / committee to exercise oversight of DEI. Mention any accountability systems that are in place.

1.2 Does the organisation have a DEI policy or strategy?

If so, please provide copies of the relevant documents. (The policies may be standalone or incorporated into a broader human rights policy or code of conduct, etc). State the diversity characteristics the policy or strategy covers (e.g., age, gender, ethnicity) and whether it is publicly available. Describe the process for reviewing and updating the policy / strategy and specify the organisation or committee member responsible for updating and approving it. Mention any DEI frameworks, laws or guidelines referenced in the policy / strategy.

Specify whether policies cover:

• Harassment, discrimination and violence
• Family leave (that exceeds any government mandated paid leave)
• Equitable pay
• Whistleblowing
• Grievances and remediation

1.3 Does the organisation engage with stakeholders to inform its DEI policies / strategy?

If so, please provide details. Mention:

1. the stakeholders engaged (e.g., staff, clients)
2. what the stakeholder engagement consists of (e.g., conducting surveys, running
3. how frequently the engagement takes place.

1.4 Does the organisation integrate DEI performance metrics into executives’ performance reviews and / or compensation mechanisms?

Describe how DEI performance metrics are defined, measured and to which positions they are applied (e.g., executive management).

1.5 Does the organisation offer DEI training?

If so, please describe the training offered. Specify:

1. the objectives of the training (e.g. to foster an inclusive culture within the organisation, to build awareness)
2. who receives the training (e.g. all employees, senior management, the company board)
3. whether the training is mandatory or optional
4. what the training consists of (e.g. online tutorials, workshops) v) what the training covers vi) the frequency of the training vii) if / how the effectiveness of the training is assessed.

Strategy

2.1 Does the organisation take action to ensure an inclusive recruitment process?

If so, please describe the actions taken. Examples include following an anonymous application process, offering a panel of interviewers that includes members of underrepresented groups and requiring candidate lists to include individuals from underrepresented groups.

2.2 Does the organisation support promoting and progressing employees from underrepresented groups?

If so, please describe the actions taken. Examples include providing career maps and competency frameworks that offer open and equal access to information on why and how employees are promoted, and instituting strategies to promote diverse representation on high-visibility projects.

2.3 Does the organisation support employees that have parental and other caring responsibilities?

If so, please describe the actions taken. Examples include offering flexible working hours and a gender-neutral family leave allowance that exceeds the statutory minimum.

2.4 Does the organisation make its workplace inclusive?

If so, please describe the actions taken. Examples include providing office facilities that are accessible to individuals with disabilities and establishing employee resources groups.

2.5 Does the organisation promote DEI among its suppliers / service providers?

If so, please provide details. Examples of relevant actions include running a supplier diversity programme and assessing suppliers / service providers’ DEI policies and practices during due diligence.

2.6 Does the organisation seek to shape DEI-related outcomes¹?

If so, provide details. Mention:

1. where the organisation’s approach to shaping outcomes is set out (e.g. in its mission statement, responsible investment policy, etc)
2. the frameworks that are used to identify outcomes (e.g. the Sustainable Development Goals, the UN Guiding Principles on Business and Human Rights)
3. the outcomes the organisation is seeking to shape
4. any steps that are being taken to contribute to positive outcomes (e.g. engaging with policy makers on DEI issues)
5. any steps that are being taken to prevent and / or mitigate unintended, negative outcomes
6. how progress towards outcomes is measured and evaluated.

Risk management

3.1 Does the organisation have procedures to respond to reported breaches of its DEI policies?

If so, please describe the procedures. Mention whether there are whistleblowing and / or grievance procedures and whether they are operated by an independent third party. Explain how stakeholders (e.g., employees, contractors) are informed of any whistleblowing / grievance procedures. Specify whether there is a procedure for tracking the resolution of reported breaches and providing remedy in cases where policies are proved to have been breached.

3.2 Does the organisation track / disclose information on the number and nature of any judicial, regulatory, or other legal findings, formal actions, or claims relating to DEI that are made against it?

If so, provide details. If the information is publicly available, please provide a copy of the disclosures.

Metrics and targets

4.1 Does the organisation track and / or disclose DEI metrics?

If so, please provide details. If the organisation discloses DEI metrics, provide a copy of the most recent disclosures and state whether they are publicly available. Where possible (and if not already contained in the organisation’s public DEI disclosures) please provide a breakdown of data, covering the prior 12-month period, on the diversity characteristics of the organisation’s:

• Total workforce
• Executive leadership team
• Investment decisionmakers (if applicable)
• Investment committee (if applicable)
• Board of directors (if applicable)
• Owners (applicable to privately owned managers)
• Staff that were hired, promoted and departed over the reporting period

And provide data on:

• Wage gaps for members of underrepresented groups
• The average number of weeks of parental leave taken
• The retention rate (e.g., the percentage of staff that remained employed by the organisation) one year post parental leave

If data is available covering multiple years, please provide historical data. If the organisation faces legal restrictions or potential confidentiality issues which prevent it from collecting information on the diversity characteristics of its workforce and / or owners, please provide an overview of the restrictions.

4.2 How does the organisation use the DEI metrics it tracks?

Describe if / how diversity metrics inform the organisation’s DEI strategy.

4.3 Does the organisation set targets on DEI?

If so, please provide details on the targets. Specify whether the targets:

1. are quantified
2. have a specific start and end date
3. are disclosed publicly. Please reference any benchmarks or frameworks that have been used to set the targets. Also explain how targets are tracked.

Investment managers: private markets

5.1 Are DEI-related issues considered as part of pre-investment due diligence?

If they are, outline:

1. any DEI metrics that are analysed ii) any standards / frameworks that inform the DEI metrics analysed
2. any standards / frameworks that inform the DEI metrics analysed
3. how the data on DEI is sourced (e.g., through questionnaires)
4. how analysis of DEI issues is fed into the investment decision-making process.

5.2 Is there an action plan / strategy for managing material DEI risks and opportunities during the holding period of investments?

If so, explain the steps taken as part of the action plan / strategy (e.g., setting and monitoring DEI-related targets).

5.3 Are there procedures for managing DEI incidents / controversiesrelating to investments?

If so, clarify whether the procedures cover:

1. how potential involvement in DEI-related incidents / controversies is monitored (e.g., media reports that a company / asset is negatively impacting members of underrepresented communities)
2. actions typically taken in response to DEI incidents / controversies (e.g., running stakeholder consultations)
3. how involvement in DEI incidents / controversies is communicated to clients.

5.4 Are DEI considerations incorporated into preparations for exiting / selling assets?

If so, please provide details. Mention any actions taken to ensure DEI standards are maintained under new ownership (an example of a relevant action is assessing whether prospective buyers of an asset have made a commitment to DEI).

5.5 Is information regarding investments’ DEI profile / performance disclosed in regular reporting to clients?

If so, explain:

1. the metrics disclosed
2. whether information on DEI action plans is disclosed
3. whether data on the diversity characteristics of the organisation’s staff that sit on investee boards is disclosed (if applicable)
4. the frequency of the disclosures.

Investment managers: public equity and debt markets

6.1 Are DEI factors incorporated into investment decisions?

If they are, provide details on:

1. the DEI metrics analysed
2. any standards / frameworks that inform the DEI metrics analysed
3. how the data on DEI is sourced
4. any risks and limitations associated with the data on DEI and how these risks and limitations are managed
5. how data on DEI is used in the investment process
6. any investment screens relating to DEI that are applied.

6.2 Is DEI-focused stewardship conducted with investee entities?

If so, detail:

1. whether the organisation’s stewardship policy – or if applicable, voting policy, guidelines or principles – cover DEI
2. how investees are selected for engagement on DEI issues
3. the specific DEI issues that are typically focused on through stewardship (e.g. board diversity, procedures for addressing sexual harassment)
4. the stewardship methods that are used (e.g. filing shareholder proposals, joining collaborative stewardship initiatives)
5. the basis on which stewardship efforts are escalated (e.g. owing to a lack of responsiveness or progress from the investee entity)
6. how the stewardship activity is integrated into the investment process vii) how the effectiveness of stewardship activity is assessed.

6.3 Are there procedures for monitoring and managing DEI incidents / controversiesinvolving investee entities?

If so, explain:

1. how the involvement of investee entities in DEI-related incidents / controversies is monitored
2. the actions typically taken in response to DEI incidents / controversies (e.g., engaging with the issuer involved)
3. how investee involvement in DEI-related incidents / controversies is communicated to clients.

6.4 Is information on investments’ DEI profile / performance disclosed in regular reporting to clients?

If so, outline:

1. the metrics disclosed (e.g., the percentage of investee company board members that are from underrepresented groups)
2. if information on DEI-focused stewardship activity is disclosed
3. the frequency of the disclosures.

Investment consultants: manager research process

7.1 Does the organisation assess investment managers on DEI as part of its standard manager research process?

If so, please provide details.

7.2 Does the organisation track and / or disclose DEI metrics in relation to the manager searches it conducts?

If so, please provide copies of its most recent disclosures. State whether the disclosures are publicly available. Where possible (and if not already contained in the organisation’s public DEI disclosures) please provide data on the proportion of searches in the past 12 months that:

• included managers owned or led by members of underrepresented groups;
• recommended the selection of a manager owned or led by members of underrepresented groups; and
• resulted in the selection of a manager owned or led by members of underrepresented groups.

7.3 Does the organisation track and / or disclose the proportion of its total assets under advisement managed by investment managers that are owned or led by members of underrepresented groups?

If so, please provide details and copies of its most recent disclosures. State whether the disclosures are publicly available.

Additional information

8.1 Is there any additional information regarding the organisation’s approach to DEI not covered in this questionnaire that you would like to share?

Document checklist

Indicator mapping