The SEC, the Securities and Exchange Commission, has given the green light (with one vote out of five) to the plan that will protect gender and race diversity on the boards of large US companies.
As it was in other times for the social balance, now the Big Companies will have to respect some essential requirements of balance in the appointments of their Boards of Directors (a woman, a member of an ethnic minority or one of the LGBTQ community).
The new fund promoted by ProcureAM, in collaboration with LGBTQ Loyalty Holdings, fits into this innovative approach.
It is the first fund of its kind. ETF LGBTQ100 ESG uses data from the LGBTQ community to identify the top 100 companies that are closest to the group’s environmental, social and corporate governance (Environmental, Social and Governance) objectives. The fund includes names like Estee Lauder, Facebook, Starbucks, PayPal, Visa, Amazon, and other excellent names. ESG criteria are useful for determining the environmental, social and governance impact of companies, which are increasingly oriented towards highlighting the sustainability of their business.
An opinion on the new fund was given by ETF Trends CEO Tom Lydon “There is a large number of supporters, including former MP Barney Frank and Martina Navratilova, former professional tennis player and well-known advocate of transgender and gay rights. This new approach will be fundamental for what will happen in the near future, because people will pay more and more attention to these issues ”.
The gray eminence behind the new fund, Procure Holdings co-founder Bob Tull, explained by insiders the unique approach used to select stocks within the fund. A different approach from traditional funds which only use quantitative analysis.
“The structure started with over a thousand titles and so the first thing we did was look at them for how much these companies do in the direction of inclusion and ESG using UN standards.”
Andrew McOrmond, Chief Executive Officer of WallachBeth Capital, believes the fund will attract new, younger, social governance and investment-oriented investors. “These young people are climbing the ranks in these big companies too, and if these companies support inclusion and gender equality they will attract the best talent, and best talent means better performance.”
This is how the decision of the SEC was able to start a positive feedback cycle. As young talents join companies that enforce ESG values, these companies will perform better and, as a result, their share price will rise over the long term. Together for once social and business.