Support for ESG

A large majority of respondents (81 percent) said strong ESG policies and practices are in place at their firms, an increase from last year’s response of 78 percent.

To gauge whether and to what extent our top managers have been impacted by the wave of anti-ESG sentiment in particular regions of the country, we included several new questions in the 2024 survey. Their responses indicate steady if not growing conviction in the utility of ESG data:

• More than three-quarters of respondents (76 percent) reported that ESG factors are essential, while 21 percent reported they are nice to have. No respondent replied that they are unnecessary.
• Similarly, 52 percent said their firm’s perspective on the importance of ESG factors had not shifted in the past three years, while 44 percent said ESG has become more important.

Findings on environmental sustainability

On environmental issues, responses on net-zero commitments and emissions tracking were roughly consistent. In 2024, slightly fewer firms than in 2023 reported that they have made a net-zero commitment. Close to two-thirds of firms track their own emissions, while fewer than one-third track emissions of the companies in which they invest for pension fund clients.

Does your firm track its own emissions?

Source: Segal Marco Advisors’ 2024 Snapshot on Investment Managers’ Sustainability Practices

In the years since the COVID-19 pandemic sent workers to home offices, we’ve seen most of our top managers maintain policies on remote work. Our 2024 survey shows some firms are bucking that trend, with an uptick in the percentage of firms returning to the office: 9 percent of respondents reported staff are no longer working remotely, up from 4 percent last year. All remaining respondents said offices are open and employees work from both there and home.

Findings on social aspect of ESG

The responses on DEI were slightly more nuanced. Asked whether firms had taken any new steps to improve DEI efforts, 74 percent reported significant steps were taken. We also asked respondents if they felt their firm should be doing more on DEI and found more than half said yes.

Has the Firm Taken Steps to Improve DEI Efforts?

Source: Segal Marco Advisors’ 2024 Snapshot on Investment Managers’ Sustainability Practices

Should Your Firm Be Doing More with Respect to DEI?

Total does not equal 100% due to rounding.

Source: Segal Marco Advisors’ 2024 Snapshot on Investment Managers’ Sustainability Practices

When examining information on actions taken, numbers tell a more convincing story than sentiment. About half thought their firm should make DEI a higher priority. Many view DEI as a critical part of ESG. A large majority of respondents (81 percent) said DEI is indeed integrated into ESG strategy, while 19 percent reported that DEI has not been integrated.

How Integrated Are DEI Goals into Your Firm’s Overall ESG Strategy?

Source: Segal Marco Advisors' 2024 Snapshot on Investment Managers’ Sustainability Practices

This year we found only 62 percent of firms have assessed gender pay equity. Of those only 75 percent found no pay gap.

With respect to workplace demographics, men continue to represent the majority of the total workforce. Firms reported that men make up 58 percent of the workforce.

In 2024, the racial composition of the workforce is similar to 2023, with 62 percent White, 19 percent Asian, 8 percent Hispanic and 7 percent Black. Year over year, we continue to see the representation of Black employees decrease, down from 13 percent in 2022 and 9 percent in 2023.

Conversely, there is improvement in terms of diversity of new hires for both racial minorities and women. In 2022 and 2023, a majority of firms reported under 50 percent of new hires were diverse. In 2024, 67 percent of firms reported at least 50 percent of new hires are women and 70 percent are racial minorities.

Women and minority employees continue to be underrepresented in senior level positions. For executives, senior officials, and manager roles, respondents reported that women represent 28 percent up from 26 percent last year. Racial minorities represent 22 percent, which is in line with 2023 data.

Leaders by Race

Notes: Fewer than 1% of the leaders at the surveyed firms were identified as Native Hawaiian or Pacific Islander.

Source: Segal Marco Advisors' 2024 Snapshot on Investment Managers' Sustainability Practices

The percentage of racial minorities on firms’ boards of directors continues to decrease. In 2024, 38 percent of firms had no racial minorities on their boards, down from 30 percent in 2023. While not as drastic, there was also a decrease in women on the board. In 2024, 13 percent of firms reported they have no women on their board of directors, up from 11 percent in 2023.

Findings on governance

At the surveyed firms, workplace policies on sexual harassment and codes of ethics are ubiquitous. However, the percentage of firms with private arbitration for sexual harassment claims, which can discourage alleged victims from speaking publicly or obtaining private legal counsel, has been trending downward. In 2024, the portion of firms with such policies dropped 2 points to 15 percent.

That change may be a response to the Ending Forced Arbitration of Sexual Assault and Harassment Act of 2021, a federal law that went into effect in 2022, which gives people alleging harassment or sexual assault the freedom to choose the legal path to pursue for possible recourse: arbitration or a lawsuit.

A large majority of firms have policies on cybersecurity, disaster recovery and succession planning.

Segal Marco found the overall average tenure among our top managers is just under nine years. Most respondents (67 percent) reported an average staff tenure of less than 10 years.

Perhaps as a retention strategy, more firms are giving their employees an opportunity to gain ownership stakes in their firms. Seventy-two percent of respondents reported they provide that opportunity, an increase of 7 percentage points from the prior year.

Download the survey report for additional results

The report covers all 2024 findings. It also provides data from the previous four surveys.