It is increasingly clear that the trajectories of companies are shaped significantly by their people – for better and for worse.
There are decades’ worth of studies linking corporate diversity with financial performance. That literature, in turn, builds on a body of academic research testing group decision-making, much of which shows that heterogeneous groups make more robust, thoughtful and useful decisions. There is also now a growing body of research linking corporate culture and its parameters, including wellness, productivity and employee satisfaction, to financial performance.
Our updated review of research into these relationships reveals the many ways that companies can harness human skill, talent, experience and knowledge to create value. It suggests that people and corporate culture matter. We believe companies that understand this will surely be better positioned for success as the transition to a more sustainable economy continues.
- Positive correlations between diversity – particularly gender diversity in executive teams – and better company financial performance are increasingly present in the literature.
- A strong relationship between corporate culture and human resources policies is another emerging theme. These policies, in turn, are positively correlated with financial performance.
- Diversity supports both environmental and social aspects of the transition to a more sustainable economy, as it is positively correlated with more robust financial accounting, stronger innovation and better sustainability outcomes, including environmental reporting and climate disclosures.
Nothing presented herein is intended to constitute investment advice and no investment decision should be made solely based on this information. Nothing presented should be construed as a recommendation to purchase or sell a particular type of security or follow any investment technique or strategy. Information presented herein reflects Impax Asset Management’s views at a particular time. Such views are subject to change at any point and Impax Asset Management shall not be obligated to provide any notice. Any forward-looking statements or forecasts are based on assumptions and actual results are expected to vary. While Impax Asset Management has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability or completeness of third-party information presented herein. No guarantee of investment performance is being provided and no inference to the contrary should be made.