The Justice, Equity, Diversity, & Inclusion (“JEDI”) Community of Practice promotes the incorporation of gender, racial and ethnic justice in global investment decision-making. It contributes to growing demand and investment opportunities for diversity, facilitating the broader transition towards a more participatory, equitable, and sustainable financial ecosystem.
Its objective is to enable investment allocators around the world to better understand how to integrate a gender and JEDI lens in both internal processes and teams, and within portfolios. This includes addressing and unpacking the challenging nature of language and framing, as well as the challenge of data collection given legal, regulatory, and operational requirements.
Justice, Equity, Diversity & Inclusion (JEDI)
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What is JEDI investing?
Incorporating a gender lens alongside a broader diversity lens. It is about looking at social equity and factors of social exclusion more broadly. It is in large part about who is doing the investing, who receives investment, and how those decisions are made. Gender-Smart JEDI investment extends beyond gender, racial and ethnic diversity at the ownership level to encompass governance, leadership, employment, value chains, and products, services, and customer lenses.
It is also about power dynamics* and engagement. For example, a justice frame can also incorporate community ownership, employee ownership, dismantling structural racism, reparations, and in the US, looking at the criminal justice system. The emerging markets perspective often focuses on expat versus local founders and fund managers.
Successfully executing JEDI investment strategies will require new approaches to data collection, due diligence, reducing implicit bias and improving the diversity of LPs, GPs, other investors and the companies within their portfolios.
*Criterion Institute have produced a useful guide to analysing power in investments which you can find here
Why should investors care?
In addition to the moral case, there is ample evidence to support the outperformance of diverse teams and founders - whatever your definition, investing in diversity just makes business sense. Teams of diverse startup founders create 63% better valuations than all-male, all-white teams, and 64% of new women-owned businesses in the US are started by women of colour. There’s also investor demand: in a survey, 73% of Canadian investors wanted a portion of their portfolio invested in organisations providing opportunities for the advancement of women and diverse groups.
Addressing racial/ethnic and gender discrimination could yield US$5T in additional GDP over the next five years for the US, and a AU$12.7B dividend annually in Australia.
Yet in spite of this opportunity, teams and boards globally are still largely homogeneous, and capital just isn’t flowing with a JEDI lens. 96.5% of Canadian public companies have no Indigenous representation on their board of directors. Afro-Brazilians account for just 6% of managers, despite making up 51% of the population. 73% of UK pension fund trustee boards have no ethnic diversity. Black and LatinX women founders received less than 0.5% of total VC investment in the US in 2020, and just 0.02% in the UK.
Get involved
If you’d like to be actively involved in Community of Practice conversations, talk to us about membership.
Whether you’re starting out, levelling up or going further on your JEDI investment approaches, you might also want to explore the JEDI Investing Toolkit.
Tools & knowledge